Answer the Following Questions Using the Information Below

question 21

Multiple Choice

Answer the following questions using the information below:
Veach Corporation incurred fixed manufacturing costs of $6,000 during 2015. Other information for 2015 includes:
The budgeted denominator level is 1,000 units.
Units produced total 750 units.
Units sold total 600 units.
Beginning inventory was zero.
The company uses variable costing and the fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold.
-Operating income using variable costing will be ________ than operating income if using absorption costing.

• A) $2,400 higher
• B) $2,400 lower
• C) $3,600 higher
• D) $900 lower

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Definitions:

Bad Apples Effect

Refers to the impact that individuals who exhibit undesirable behaviors can have on their peers or the overall environment, often resulting in a negative group dynamic or culture.

Diversity

The existence of variations of different characteristics in a group of people, including race, ethnicity, gender, sexual orientation, age, and socioeconomic status.

Illusion of Invulnerability

A cognitive bias that leads individuals or groups to underestimate the likelihood of experiencing negative events.

Illusion of Unanimity

A phenomenon occurring in group decision-making processes where a false agreement is perceived, due to members withholding their dissenting views.