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:

Ending Inventory

The final value of goods available for sale at the end of an accounting period, calculated before the start of a new period.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor directly involved in creating the product.

Total Assets

The sum of all current and non-current assets owned by a business, indicating its total resources.

Cost Per Unit

The total expense incurred in manufacturing or acquiring a product divided by the number of units.