Patridge Company Uses a Standard Cost System in Which It

question 86

Multiple Choice

Patridge Company uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of direct labour hours.The information below is taken from the company's flexible budget for manufacturing overhead:
During the year,the company operated at exactly 80% of capacity,but it applied manufacturing overhead to products based on the 90% level.What was the company's fixed overhead volume variance for the year?

• A) $6,000 favourable.
• B) $6,000 unfavourable.
• C) $12,000 favourable.
• D) $12,000 unfavourable.

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Definitions:

BBB Credit Rating

This is a credit score indicating that the borrower has a good credit standing, typically associated with medium-grade investment securities with a moderate risk of default.

B Credit Rating

A rating denoting a relatively high risk level for investors or lenders, indicating that the entity has significant credit risk but is not in default.

Treasury Yield Curve

A graphical representation showing the yields on U.S. Treasury securities at fixed maturities, indicating the relationship between interest rates and the length of time to maturity.

Short-term Yields

Interest rates or returns on investments or securities that mature in a short period, typically less than one year.