Budgeted Output for DuCane Small Engines Inc

question 73

Multiple Choice

Budgeted output for DuCane Small Engines Inc.was 20,000 engines during February 2016.Budgeted fixed overhead per output unit was $2.50,and 30,000 engines were actually produced.Actual fixed overhead was allocated at $3.00 per engine.What is the production-volume variance?

• A)$33,500 favourable
• B)$25,000 unfavourable
• C)$30,000 favourable
• D)$30,000 unfavourable
• E)$25,000 favourable

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Definitions:

Asset Group

A collection of assets that share similar characteristics and are accounted for together in financial reporting.

Production Phase

The production phase is the period in a business cycle when raw materials are converted into finished products.

Revenue Recognition

The principle in accounting that outlines the exact situations in which revenue is to be acknowledged and accounted for.

Transitory Earnings

Earnings that are considered temporary or not expected to persist over time, often removed from projections or models that attempt to predict a company's future profitability.