Answer the Following Questions Using the Information Below

question 67

Multiple Choice

Answer the following questions using the information below:

Munoz, Inc., produces a special line of plastic toy racing cars. Munoz, Inc., produces the cars in batches. To manufacture a batch of the cars, Munoz, Inc., must set up 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 2015:

-Calculate the spending variance for fixed setup overhead costs.

• A) $3,200 unfavorable
• B) $2,025 unfavorable
• C) $3,600 unfavorable
• D) $2,025 favorable

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Definitions:

Abstractions

are concepts that are generalized from specific instances, focusing on the essential qualities rather than concrete details.

Question-and-answer Session

a period during which experts or panelists respond to questions from the audience or participants.

Clarification

The process of making a statement or situation less confused and more comprehensible.

Spontaneous Wit

The ability to produce clever and humorous responses or remarks without preparatory thought.