Answer the Following Question(s)using the Information Below

question 50

Multiple Choice

Answer the following question(s) using the information below.Munoz Inc.produces a special line of plastic toy racing cars in batches.To manufacture a batch of the cars Munoz Inc.must setup the machines and molds.Setup costs are batch-level costs because they are associated with batches rather than individual units of products.A separate Setup Department is responsible for setting up machines and molds for different styles of car.Setup overhead costs consist of some costs that are variable and some costs that are fixed with respect to the number of setup hours.The following information pertains to June 2012:

-Calculate the flexible-budget variance for variable setup overhead costs.

• A)$600 unfavourable
• B)$1,300 favourable
• C)$600 favourable
• D)$1,300 unfavourable
• E)$400 unfavourable

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Definitions:

Distribution Network

The interconnected group of storage facilities and transportation systems through which a product moves from producers to end consumers.

Manufacturer Storage

Warehouse or storage facilities used by manufacturers for keeping raw materials, work-in-process or finished goods before distribution.

Transportaton Cost

Expenses incurred in the process of moving goods from one location to another, including fuel, labor, and vehicle maintenance or rental.

Manufacturer/Distributor Storage

A logistics strategy where products are stored at the manufacturer or distributor's facilities until they are sold or distributed to retail locations.