Walterboro, Inc

question 20

Multiple Choice

Walterboro, Inc., has done a cost analysis for its production of decals. The following activities and cost drivers have been developed: Activity Cost Formula
Maintenance $11,000 + $0.11 per machine hour
Machining $25,000 + $0.50 per machine hour
Setups $50 per batch
Purchasing $200 + $45 per purchase order
Following are the actual costs of producing 85,000 decals: 5,000 machine hours; 10 batches; 20 purchase orders
What is the budget variance for setups in an activity-based performance report?

• A) $50 F
• B) $50 U
• C) $800 U
• D) none of these

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Definitions:

Controlling Interest

Holding a majority of the voting stock or interest in a company, thereby having significant influence or control over its operations and decision-making.

Net Incomes

The total earnings of a company after deducting all expenses, taxes, and costs from its total revenues.

Deferred Income Tax

Deferred Income Tax is a liability on a company's balance sheet that results from income already earned and recognized for accounting purposes but not yet subject to taxation.