Kris Company Calculates Its Predetermined Rates Using Practical Volume, Which

question 84

Multiple Choice

Kris Company calculates its predetermined rates using practical volume, which is 325,000 units.The standard cost system allows 3 direct labor hours per unit produced.Overhead is applied using direct labor hours.The total budgeted overhead is $4,260,000, of which $994,000 is fixed overhead.The actual results for the year are as follows:

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Calculate the fixed overhead volume variance.

• A) $32,000 U
• B) $20,000 F
• C) $22,000 F
• D) $4,000 U
• E) None of these.

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Definitions:

Storage Capacity

The volume or space available for storing goods or data in a warehouse, hard drive, or other storage systems.

Executive Support System

A type of management information system designed to facilitate and support the information and decision-making needs of senior executives.

Enterprise Planning Resources

Systems and tools used to align company resources and strategies with its long-term goals and objectives; often involves software solutions.

Expert System

A computer system that mimics the decision-making ability of a human expert, using rules and data to provide solutions to complex problems.