A Manufacturer of Playground Equipment Uses a Standard Costing System

question 16

Multiple Choice

A manufacturer of playground equipment uses a standard costing system in which standard machine-hours (MHs) is the measure of activity.Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period: The fixed manufacturing overhead budget variance for the period is closest to:

• A)$4,470 U
• B)$950 U
• C)$2,790 F
• D)$1,381 U

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Definitions:

Nonfinancial Information

Data that relates to the operational, environmental, and social aspects of a business, which cannot be easily quantified in monetary terms.

Employee Turnover

The rate at which employees leave a company and are replaced by new employees.

Contribution Margin

The difference between the sales revenue of a product and its variable costs, used to cover fixed expenses and contribute to profits.

Incremental Analysis

A decision-making technique that evaluates the financial consequences of making one more unit of a product or entering a new market.