Answer the Following Questions Using the Information Below

question 41

Multiple Choice

Answer the following questions using the information below:
Veach Corporation incurred fixed manufacturing costs of $6,000 during 2015. Other information for 2015 includes:
The budgeted denominator level is 1,000 units.
Units produced total 750 units.
Units sold total 600 units.
Beginning inventory was zero.
The company uses variable costing and the fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold.
-Fixed manufacturing costs included in ending inventory total ________.

• A) $1,200
• B) $1,500
• C) $900
• D) 0

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Definitions:

Novation

The act of replacing one party or obligation in a contract with another, requiring the agreement of all parties involved.

Assignment

The transfer of rights, property, or obligations from one party to another, a common practice in contracts and financial transactions.

Delegation

The process of assigning responsibility and authority to another person to carry out specific activities.

Substantial Performance

A legal concept indicating that a party has completed enough of its contractual obligations to warrant payment or another form of compensation, even if minor details remain unfulfilled.