(Appendix 11A)Denby Corporation Applies Manufacturing Overhead to Products on the Basis

question 68

Multiple Choice

(Appendix 11A) Denby Corporation applies manufacturing overhead to products on the basis of standard machine-hours.Budgeted and actual fixed manufacturing overhead costs for the most recent month appear below: The company based its original budget on 6, 400 machine-hours.The company actually worked 6, 710 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 6, 540 machine-hours.What was the overall fixed manufacturing overhead volume variance for the month?

• A)$3, 286 Favorable
• B)$1, 484 Unfavorable
• C)$3, 286 Unfavorable
• D)$1, 484 Favorable

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Definitions:

Amplification

In context, refers to the increase in signal strength or the magnification of the effects or significance of something.

Smoothing

A technique used to remove variability or fluctuations in data or a process, often to reveal underlying trends.

Bullwhip Effect

A phenomenon in supply chain management where small variations in demand at the retail level cause increasingly larger variations in demand at the wholesale, distributor, and manufacturer levels.

Shortage Gaming

Strategic behavior by participants in a supply chain who intentionally reduce their demand forecasts when they anticipate a shortage, in order to receive more stock than they would otherwise.