Leek Company Predicted That the Fixed Overhead Would Be $200,000

question 128

Multiple Choice

Leek Company predicted that the fixed overhead would be $200,000 in April 2015.Production amounted to 60,000 actual and 50,000 budgeted decks of cards.Each deck takes approximately 0.20 machine hours to produce.The actual overhead costs per machine hour are $25.What is the production-volume variance?

• A)$40,000 unfavourable
• B)$40,000 favourable
• C)$150,000 unfavourable
• D)$150,000 favourable
• E)$0

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Definitions:

Assets

Resources owned by a business or individual with economic value or expected to provide future benefits.

Salaries and Wages

Compensation paid to employees for their services, including both regular salary and hourly wages.

Expenses

The outflows or consumption of assets or incurring/liabilities (creating a liability) from a company's operations aimed at generating revenue.

Revenue

The total income generated from normal business operations, including sales of goods and services before any expenses are subtracted.