Answer the Following Questions Using the Information Below

question 99

Multiple Choice

Answer the following questions using the information below:
Munoz, Inc., produces a special line of plastic toy racing cars. Munoz, Inc., produces the cars in batches. To manufacture a batch of the cars, Munoz, Inc., must set up 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 2011:

-Calculate the efficiency variance for variable setup overhead costs.

• A)$1,900 unfavorable
• B)$600 unfavorable
• C)$1,900 favorable
• D)$600 favorable

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Definitions:

Cost-Benefit Thinking

A system of thought that focuses on the consequences to one person or institution and then weighs the cost against the benefits of performing the action under scrutiny.

Small Business Owner

An individual who owns and operates a business that is smaller in size, typically identified by revenue, employees, or other criteria.

Ethic Of Ultimate Ends

A moral philosophy that evaluates actions by their consequences or ultimate outcomes, often associated with utilitarianism.

Max Weber

A German sociologist, economist, and political scientist known for his theory on the structure of authority and his insights on the development of capitalism.