Freetown Corporation Incurred Fixed Manufacturing Costs of $26,000 During 2017

question 207

Multiple Choice

Freetown Corporation incurred fixed manufacturing costs of $26,000 during 2017.Other information for 2017 includes:
The budgeted denominator level is 2,600 units.
Units produced total 1,800 units.
Units sold total 1,200 units.
Beginning inventory was zero.
The company uses absorption costing and the fixed manufacturing cost rate is based on the budgeted denominator level.Manufacturing variances are closed to cost of goods sold.
The production-volume variance is ________.(Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar. )

• A)$6,000
• B)$8,000
• C)$14,000
• D)$0

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Definitions:

Behavioral Economics

A field of economic research that examines how psychological, social, cognitive, and emotional factors affect economic decisions of individuals and institutions.

Brain Modularity

The concept that the human brain is composed of specialized modules or regions, each responsible for different functions or processes.

Availability Heuristic

A mental shortcut that relies on immediate examples that come to a person’s mind when evaluating a specific topic, concept, method, or decision.