Friou Corporation Manufactures and Sells a Single Product

question 45

Multiple Choice

Friou Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During July, the company budgeted for 6,300 units, but its actual level of activity was 6,250 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for July:

Data used in budgeting:
Actual results for July:
-The manufacturing overhead in the flexible budget for July would be closest to:

• A)$42,500
• B)$43,616
• C)$42,927
• D)$42,580

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Definitions:

Credit Risk

The risk of loss resulting from a borrower's failure to repay a loan or meet contractual obligations.

Financial Ratios

Quantitative measures derived from financial statement analysis to assess a company's performance, financial health, and valuation.

Profitability

A measure of the efficiency and effectiveness of a company in generating profit from its operations.

Solvency

The ability of a company to meet its long-term financial obligations.