Answer the Following Questions Using the Information Below:
Ecocomfort Corporation

question 163

Multiple Choice

Answer the following questions using the information below:
Ecocomfort Corporation manufactured 1,000 coolers during October. The following variable overhead data relates to October:
$$\begin{array} { l l } \text { Variable overhead spending variance } & \$ 1,230 \text { Unfavorable } \\\text { Variable overhead efficiency variance } & \$ 175 \text { Unfavorable } \\\text { Budgeted machine hours allowed for actual output } & 615 \text { machine hours } \\\text { Actual cost per machine hour } & \$ 27 \\\text { Budgeted cost per machine hour } & \$ 25\end{array}$$
-Calculate the variable overhead flexible-budget variance.

• A) $1,055 unfavorable
• B) $1,055 favorable
• C) $1,405 unfavorable
• D) $1,405 favorable

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Definitions:

Liquidity

The ability of an asset to be quickly converted into cash or an entity's capacity to meet its immediate and short-term obligations.

Unusual Items

Non-recurring or uncommon transactions that are outside the usual business operation, which might distort the financial statements if not separately disclosed.

Income Statement

A financial statement that reports a company's financial performance over a specific period of time, detailing revenues, expenses, and profits or losses.

Ratio Analysis

A financial analysis method that involves calculating and interpreting financial ratios from statements to assess a company's performance, liquidity, efficiency, and profitability.