(Appendix 11A)Pizzi, Inc

question 1

Multiple Choice

(Appendix 11A) Pizzi, Inc.had the following fixed manufacturing overhead variances last year: Pizzi uses machine-hours as an activity base for overhead and used 48, 000 machine-hours as the denominator activity level for the year.Total actual fixed manufacturing overhead was $150, 000.The actual number of machine-hours incurred were 50, 000.What were Pizzi's standard hours allowed for actual output?

• A)40, 000
• B)42, 000
• C)50, 400
• D)52, 500

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Definitions:

Variable Expenses

Variable expenses change in proportion with business activity or production levels, such as raw materials costs, directly influenced by the volume of output.

Break-Even Point

The point at which total costs and total revenue are equal, meaning the business is not making a profit or a loss.

Net Loss

The amount by which expenses exceed revenues, indicating a negative profit.

Margin of Safety Percentage

A financial metric indicating the amount by which sales can drop before reaching the break-even point.