Answer the Following Question(s)using the Information Below

question 45

Multiple Choice

Answer the following question(s) using the information below.Lukehart Industries Inc.produces air purifiers in batches.To manufacture a batch of the purifiers Lukehart Inc.must setup the machines and assembly line tooling.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 tooling for different models of the air purifiers.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 production-volume variance for fixed setup overhead costs.

• A)$1,800 favourable
• B)$1,800 unfavourable
• C)$250 unfavourable
• D)$250 favourable
• E)$114 unfavourable

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Definitions:

Subsidies

Subsidies are financial grants or support extended by governments to firms, individuals, or institutions to encourage the production or consumption of certain goods or services, or to support industries.

Domestic Firms

Refers to companies that operate within the country where they are based and conduct their business activities in the local market.

Subsidies

Financial contributions by a government or public body to support businesses, consumers, or economic sectors, reducing the price of goods and services or the cost of production.

Economic Integration

Occurs when two or more nations join to form a free-trade zone.