[The Following Information Applies to the Questions Displayed Below

question 18

Multiple Choice

[The following information applies to the questions displayed below.]
Skelton Corporation had planned to produce 50,000 units of product during the first quarter of the current year.The company prepared the following budget on May 1:
During the first quarter,Skelton produced 60,000 units and incurred total manufacturing costs of $184,000.
-A performance report for Skelton's first quarter of operations using a flexible budget approach would show:

• A)Actual costs over budget by $1,300.
• B)Actual costs over budget by $11,700.
• C)Actual costs over budget by $15,150.
• D)Total costs per the flexible budget of $194,400.

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Definitions:

Extraordinary Gain

Income from events that are both unusual in nature and infrequent in occurrence, excluded from regular business operations when assessing profitability.

Note Receivable

A financial claim against another party that is evidenced by a written promise to pay a specified sum of money on demand or at a set time.

Impairment

A decrease in the recoverable value of an asset below its carrying amount on the balance sheet, leading to an adjustment of the book value.

Bad Debt Expense

Represents the amount of receivables that a company does not expect to collect and is treated as an expense on the income statement.