Mattison Company Has Developed Cost Formulas for the Drivers of the Following

question 131

Multiple Choice

Mattison Company has developed cost formulas for the drivers of the following production activities: If the actual activity was 20 setups and the actual fixed cost for inspections was $28,000 and the variable cost for inspections was $5,000, the total variance for inspections is due to

• A) unfavorable variance on fixed costs.
• B) favorable variance on fixed costs.
• C) favorable variance on variable costs.
• D) unfavorable variance on variable costs.

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Definitions:

Sell Receivables

The process of selling a company's accounts receivable to a third party at a discount in order to obtain immediate cash.

Ending Balance Sheet

A financial statement showing a company's assets, liabilities, and equity at the final moments of an accounting period.

Bill And Hold Sales

Transactions where revenue is recognized after billing the customer while the seller retains physical possession of the goods.

Shipments

The transportation of goods from one location to another.