Answer the Following Question(s)using the Information Below

question 45

Multiple Choice

Answer the following question(s) using the information below.Lukehart Industries Inc.produces air purifiers in batches.To manufacture a batch of the purifiers Lukehart Inc.must setup the machines and assembly line tooling.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 tooling for different models of the air purifiers.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 production-volume variance for fixed setup overhead costs.

• A)$1,800 favourable
• B)$1,800 unfavourable
• C)$250 unfavourable
• D)$250 favourable
• E)$114 unfavourable

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Definitions:

Cash Dividends

Payments made by a corporation to its shareholders out of the company's current or retained earnings, usually in the form of cash.

Net Income

The total profit of a company after all expenses, taxes, and deductions have been subtracted from total revenue.

Loss on Sale

A financial outcome in which the proceeds from the sale of an asset are less than its carrying value on the books.

Stock Investment

The purchase of shares in a company to gain a financial return in the form of dividends or appreciation in the share price.