Use the Following Performance Report for a Cost Center of the Dry

question 71

Multiple Choice

Use the following performance report for a cost center of the Dry Cat Food Division for the month ended December 31 to answer the question below. What is the direct materials variance between the actual results and the flexible budget?

• A) $14 (
• B) $14 (
• C) $30 (
• D) $30 (

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Definitions:

Consolidation Purposes

The process of combining the financial statements of a parent company and its subsidiaries into one comprehensive financial statement package, to present as if the group were a single entity.

Excess Amortizations

The amount by which amortization expense exceeds the amount necessary to amortize the cost of a tangible or intangible asset over its useful life.

Intra-Entity Asset Transfers

Transactions involving the transfer of assets or services between divisions or subsidiaries within the same entity, which may need to be adjusted for in consolidated financial reporting.

Depreciation Purposes

The allocation of the cost of an asset over its useful life for accounting and tax purposes.