Formidable Company Collected the Following Information: Standard Costs Per Unit

question 10

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 $800,000
Using the three variance method, what is the budget variance?

• A) $24,000 (U)
• B) $24,000 (F)
• C) $6,000 (U)
• D) $6,000 (F)

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Definitions:

Real-life Phenomena

Events, situations, or experiences that occur in the natural world, as opposed to those created or simulated in controlled environments.

Epidemiology

Study of the frequency and distribution of a disorder, or a group of disorders, in a population.

Frequency

The rate at which something occurs or is repeated over a particular period of time or in a given sample.

Distribution

In statistics, a way of describing the observations of a variable, including their spread and central tendency.