Answer the Following Questions Using the Information Below

question 117

Multiple Choice

Answer the following questions using the information below:
Aurous Incorporated planned to use $35 of material per unit but actually used $34 of material per unit, and planned to make 1,500 units but actually made 1,300 units.
-The sales-volume variance for materials is ________.

• A) $7,000 favorable
• B) $7,000 unfavorable
• C) $6,800 unfavorable
• D) $6,800 favorable

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Definitions:

Residual Dividend Policy

A strategy where dividends are paid to shareholders from the leftover or residual earnings after all operational and expansion costs are covered.

Target Capital Structure

The ideal mix of debt, preferred stock, and common equity that a company aims to hold to minimize its cost of capital.

Forecasted Net Income

An estimated calculation of a company's earnings after all expenses and taxes have been subtracted from revenue for a given future period.

Total Dividends

The sum of all dividend payments made to shareholders for a particular period, typically a fiscal year.