Spirer Corporation Manufactures and Sells a Single Product

question 99

Multiple Choice

Spirer Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During September, the company budgeted for 6,700 units, but its actual level of activity was 6,750 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for September:

Data used in budgeting:

Actual results for September:


-The activity variance for selling and administrative expenses in September would be closest to:

• A)$30 F
• B)$800 U
• C)$30 U
• D)$800 F

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Definitions:

Overt Collusion

Overt collusion occurs when companies openly agree on prices, production levels, or market shares, in violation of free-market principles and often against the law.

Monopoly Profits

Monopoly profits refer to the extra earnings a firm accrues by being the sole supplier of a good or service with no close substitutes, allowing it to dictate market prices.

Industry

A group of manufacturers or businesses that produce a particular kind of goods or services.

Barriers to Entry

Factors that prevent or hinder companies from entering a particular market or industry.