Answer the Following Questions Using the Information Below:
Assume the Following

question 168

Multiple Choice

Answer the following questions using the information below:
Assume the following cost information for Fernandez Company:
$\begin{array}{lr}\text { Selling price } & \$ 120 \text { per unit } \\\text { Variable costs } & \$ 80 \text { per urit } \\\text { Total fixed costs } & \$ 80,000 \\\text { Taxrate } & 40 \%\end{array}$
-What minimum volume of sales dollars is required to earn an after-tax net income of $30,000?

• A) $465,000
• B) $330,000
• C) $390,000
• D) $165,000

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Definitions:

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred during production and the standard cost of variable overhead allocated for the actual production volume.

Fixed Overhead Volume Variance

The difference between the budgeted and actual fixed overhead costs, attributed to the variance in the volume of production.

Fixed Component

A cost or part of a cost that remains unchanged regardless of changes in the level of output or activity.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual products or job orders based on a specific activity measure, like labor hours or machine hours.