The Following Information Was Compiled by Gidget Incorporated Assume the Cost-Allocation Base for Overhead Costs Is Units of l

question 41

Multiple Choice

The following information was compiled by Gidget Incorporated:
$\begin{array} { l } \text {Expected volume of production }&50,000 \text { units }\\ \text {Actual volume of production }&47,000 \text { units }\\ \text { Budgeted fixed overhead costs (for 50,000 budgeted units) }&\$200,000 \\ \text {Actual fixed overhead costs }&\$220,000 \\ \text { Actual variable overhead costs}&\$790,000 \\ \text { Budgeted variable overhead costs (for 50,000 bud geted units) }&\$ 855,000\\\end{array}$

Assume the cost-allocation base for overhead costs is units of production.What is the production volume variance?

• A) $6,000 Unfavorable
• B) $12,000 Unfavorable
• C) $20,000 Favorable
• D) $20,000 Unfavorable

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Definitions:

Analysis

The process of examining components or structure of something to understand it better or draw conclusions.

Communication

The exchange of information or expression of ideas, feelings, or instructions through various means including speech, writing, or behavior.

Analyze

The process of examining something methodically and in detail, typically to explain and interpret it.

Irregular Rates

Variations in frequency or amount that do not follow a consistent or predictable pattern.