Mattison Company Has Developed Cost Formulas for the Drivers of the Following

question 69

Multiple Choice

Mattison Company has developed cost formulas for the drivers of the following production activities: If the actual activity was 20 setups and the actual fixed cost for inspections was $28,000 and the variable cost for
Inspections was $5,000, the total variance for inspections is due to

• A) unfavorable variance on fixed costs.
• B) favorable variance on fixed costs.
• C) favorable variance on variable costs.
• D) unfavorable variance on variable costs.

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Definitions:

Prescribe

To recommend or dictate a specific course of action or treatment, often used in a medical context.

Legal Consequences

The potential legal penalties or effects that may follow from actions or violations of laws and regulations.

Order-Fill Rate

A metric that measures the efficiency of a company's inventory management by calculating the percentage of customer orders fulfilled from stock on hand.