Use the Information Below to Answer the Following Question(s)

question 86

Multiple Choice

Use the information below to answer the following question(s) .Everclean Filter Corporation used the following data to evaluate their current operating system.The company sells items for $10 each and had used a budgeted selling price of $11 per unit.
-What is the static-budget variance of variable costs?

• A)$13,000 favourable
• B)$13,000 unfavourable
• C)$15,000 favourable
• D)$15,000 unfavourable
• E)$3,000 unfavourable

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Definitions:

Accrual-Basis

An accounting method that records income and expenses when they are earned or incurred, regardless of when the cash is actually received or paid.

Cash-Basis

An accounting method where revenues and expenses are recorded when they are actually received or paid, not when they are incurred.

Income Statement

A financial statement that shows a company's revenues, expenses, and net income over a specific period of time.

Prepaid Insurance

An asset on the balance sheet that represents insurance paid in advance, which will be expensed over the time period it covers.