Lazy Guy Corporation Manufactured 4,000 Chairs During June

question 19

Multiple Choice

Lazy Guy Corporation manufactured 4,000 chairs during June.The following variable overhead data relates to June:

What is the variable overhead flexible-budget variance?

• A)$2,200 favorable
• B)$1,480 favorable
• C)$2,200 unfavorable
• D)$1,480 unfavorable

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Definitions:

Sales

Sales refer to the transactions where goods or services are exchanged for money, reflecting the revenue generating activities of a business.

Implicit Costs

The opportunity costs that are not directly paid for in cash but represent the loss of alternative benefits when resources are used for a particular purpose.

Explicit Costs

Direct, out-of-pocket payments for goods and services that are used in the production of other goods or services.

Accounting Profit

The financial profit of a business calculated by subtracting total expenses from total revenue, as shown in the company's income statement.