Answer the Following Questions Using the Information Below:
Genent Company

question 53

Multiple Choice

Answer the following questions using the information below:
Genent Company manufactures tires. Some of the company's data was misplaced. Use the following information to replace the lost data:
$\begin{array}{|l|r|r|r|r|r|}\hline &\text { Actual } & \text { Flexible Budget } & \text { Flexible } & \text { Sales-Volume } & \text { Static } \\&\text { Results } & \text { Variances } & \text { Budget } & \text { Variances } & \text { Budget } \\\hline\text { Units sold } & 495,000 & & 495,000 & & 453,750 \\\hline \text { Revenues } & \$ 185,150 & \$ 4,400 \mathrm{~F} & (\mathrm{~A}) & \$ 6,160 \mathrm{U} & (\mathrm{B}) \\\hline \text { Variable } & & & & & \\\text { costs } & (\mathrm{C}) & \$ 880 \mathrm{U} & \$ 69,780 & \$ 10,300 \mathrm{~F} & \$ 88,080 \\\hline \text { Fixed costs } & \$ 36,430 & \$ 3,770 \mathrm{~F} & \$ 40,200 & 0 & \$ 40,200 \\\hline \text { Operating } & & & & & \\\text { income } & \$ 78,060 & (\mathrm{D}) & \$ 70,770 & (\mathrm{E}) & \$ 66,630\\\hline\end{array}$
-What is the total flexible-budget variance (D) ?

• A) $240 unfavorable
• B) $0
• C) $1,360 favorable
• D) $7,290 favorable

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Definitions:

Direct Labor Costs

Expenses associated with employees who are directly involved in the production of goods or services.

Work in Process

Inventory that includes partially completed goods that are still in the production process.

Wages Payable

An account that records the amounts owed to employees for work performed that has not yet been paid.

Factory Overhead

All indirect costs associated with the production process, such as maintenance, utilities, and management salaries, not directly tied to specific units of product.