Formidable Company Collected the Following Information: Standard Costs Per Unit

question 77

Multiple Choice

Formidable Company collected the following information: Standard costs per unit:
Variable overhead 4 machine hours @ $6 per machine hour
Fixed overhead 4 machine hours @ $10 per machine hour
Actual output 20,000 units
Denominator (normal capacity) output 21,000 units
Actual machine hours 79,000 machine hours
Actual variable overhead cost $540,000
Actual fixed overhead cost $810,000
Using the two variance method, what is the budget variance?

• A) $70,000 (U)
• B) $30,000 (F)
• C) $30,000 (U)
• D) $70,000 (F)

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Definitions:

A Priori Causal Theories

Theoretical assumptions made ahead of empirical research, based on logical deduction rather than observation or experience.

Cultural Knowledge

Understanding gained about the customs, beliefs, behaviors, and norms of a group or society, facilitating effective social interaction and integration.

Inferences

The process of reaching conclusions based on evidence and reasoning rather than direct observations.

Dispositions

Dispositions are inherent qualities of mind and character, reflecting tendencies to behave in certain ways under various conditions.