Answer the Following Questions Using the Information Below:
Skizone Company's

question 97

Multiple Choice

Answer the following questions using the information below:
Skizone Company's 4-Variance Analysis:
$$\begin{array} { | l | l | l | l | } \hline & & & \text { Production-Volume } \\ & \text { Spending Variance } & \text { Efficiency Variance } & \text { Variance } \\\hline \text { Variable overhead } & \$ 6,500 \mathrm {~F} & \$ 12,000 \mathrm { U } & \text { No variance } \\\hline \text { Fixed overhead } & \text { (a) } & \text { No variance } & \$ 46,000 \mathrm { U } \\\hline\end{array}$$
-Which of the following statements is true of Skizone's overhead variances?

• A) Budgeted variable overhead rate is higher than actual variable overhead rate.
• B) Static fixed overhead amount is higher than flexible fixed overhead amount.
• C) Budgeted variable overhead rate is lower than actual variable overhead rate.
• D) Static fixed overhead amount is lower than flexible fixed overhead amount.

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Definitions:

Comparative Balance Sheet

A financial statement displaying the balance of assets, liabilities, and equity for two or more time periods side by side, facilitating trend analysis and financial comparison over time.

Financing Activities

Activities that result in changes in the size and composition of the equity capital or borrowings of the entity, as reported in the cash flow statement.

Fiscal Year

A twelve-month period used for accounting purposes and financial reporting by an organization, which may not align with the calendar year.

Indirect Method

The indirect method is an approach to calculating cash flows from operating activities by starting with net income and adjusting for non-cash transactions.