Answer the Following Question(s)using the Information Below

question 50

Multiple Choice

Answer the following question(s) using the information below.Munoz Inc.produces a special line of plastic toy racing cars in batches.To manufacture a batch of the cars Munoz Inc.must setup the machines and molds.Setup costs are batch-level costs because they are associated with batches rather than individual units of products.A separate Setup Department is responsible for setting up machines and molds for different styles of car.Setup overhead costs consist of some costs that are variable and some costs that are fixed with respect to the number of setup hours.The following information pertains to June 2012:

-Calculate the flexible-budget variance for variable setup overhead costs.

• A)$600 unfavourable
• B)$1,300 favourable
• C)$600 favourable
• D)$1,300 unfavourable
• E)$400 unfavourable

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Definitions:

Internal Centralized

A management structure where decisions are made by a few key individuals or a central body within the organization.

Support Department

A segment within an organization that does not directly add to profit but provides essential services for other departments.

Profit Center

A segment or department within a business that is responsible for generating its own revenue and profit, assessed separate from other areas of the company.

Revenues

The total amount of money received by the company for goods sold or services provided during a certain time period.