Hyteck Ltd Is a Capital Intensive Firm

question 72

Multiple Choice

Hyteck Ltd is a capital intensive firm. Indirect costs make up nearly 70% of the product costs. The company has no direct material costs because customers provide the direct materials used for each job. To plan and control such costs, the firm employs flexible budgets and standard costs. Overhead rates, based on direct labor hours, are derived from the master budget. The fixed overhead production volume variance was

• A) $9,000 U
• B) $2,000 F
• C) $7,000 U
• D) $2,800 U

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Definitions:

Probability Calculus

A branch of mathematics that deals with calculating the likelihood of different possible outcomes.

Negation

The logical operation that takes a proposition to its opposite in truth value, from true to false and vice versa.

Event

An occurrence or happening, particularly one of significance, that can be distinctly identified in time and space.

Probability

The quantification of the chances that a specific event will take place.