Use the Information Below to Answer the Following Questions

question 171

Multiple Choice

Use the information below to answer the following questions:
Pizza Company produces frozen pizzas in three departments: assembly, freezing and packaging. In assembly, crust ingredients are added at the beginning of the process. After the crust is made, the sauce, cheese, and toppings are added at the end of the process. Conversion costs are added evenly. Data for the assembly department includes:

-At Pizza Company the cost per equivalent unit for conversion costs would be closest to

• A) $1.41.
• B) $1.30.
• C) $1.08.
• D) $1.04.

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Definitions:

Flexible Budget

A financial plan that modifies itself in response to variations in volume or activity intensity.

Spending Variance

The difference between the actual amount spent and the budgeted or standard amount expected to be spent.

Net Operating Income

Income before interest and income taxes have been deducted.

Flexible Budget Performance Report

A report that compares the actual performance of a business to a budget that adjusts with the level of activity, providing insight into variance reasons.