An Internal Service Fund Had the Following Transactions During the Year

question 33

Multiple Choice

An internal service fund had the following transactions during the year ended June 30,2009,its first year of existence:
(1) Received $1,000,000 contribution from the general fund.
(2) Acquired fleet of cars for $950,000,paying cash.
(3) Billed departments in other funds $500,000 for using cars.
(4) Incurred operating costs,exclusive of depreciation,of $240,000.
(5) Depreciation expense amounted to $250,000.
-Refer to the above information.On the internal service fund's balance sheet at June 30,2009,net assets-unrestricted should be reported at:

• A)$260,000.
• B)$310,000.
• C)$550,000.
• D)$1,250,000.

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Definitions:

Manufacturing Overhead Volume Variance

The difference between the budgeted volume of manufacturing overhead and the actual volume incurred, used for budgeting and cost control.

Overapplied

A situation in cost accounting where the allocated manufacturing overhead costs exceed the actual overhead expenses incurred.

Underapplied

A situation where the allocated or applied costs are less than the actual costs incurred.

Fixed Overhead Budget Variance

The difference between the actual fixed overhead costs incurred and the budgeted or expected costs.