Actual Overhead Is $700,000, While Budgeted Overhead Is $598,000

question 84

Multiple Choice

Actual overhead is $700,000, while budgeted overhead is $598,000.What is the fixed overhead static-budget variance if 250,000 units are produced and 225,000 are budgeted?

• A)$80,000 favourable
• B)$100,000 unfavourable
• C)$100,000 favourable
• D)$102,000 unfavourable
• E)$102,000 favourable

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Definitions:

Regular Capacity

The maximum amount of work that a facility, workforce, or machine can complete under normal working conditions within a specific time period.

Yield Management

A pricing strategy that involves managing inventory or capacity to maximize revenue through variable pricing based on demand and supply conditions.

Operations Management

The administration of business practices designed to ensure maximum efficiency within an organization, focusing on the management of processes to produce and distribute products and services.

Demand Curve

A graph showing the relationship between the price of a product and the quantity demanded by consumers.