Freetown Corporation budgeted fixed manufacturing costs of $36,000 during 2020. Other information for 2020 includes: The budgeted denominator level is 2,000 units. Units produced total 1,600 units. Units sold total 1,300 units. Beginning inventory was zero. The company uses absorption costing and the fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold The production-volume variance is (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar) OA. $7,200 OB. $5,400 OC. $12,600 OD. 50 (3)
Freetown Corporation budgeted fixed manufacturing costs of $36,000 during 2020. Other information for 2020 includes: The budgeted denominator level is 2,000 units. Units produced total 1,600 units. Units sold total 1,300 units. Beginning inventory was zero. The company uses absorption costing and the fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold The production-volume variance is (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar) OA. $7,200 OB. $5,400 OC. $12,600 OD. 50 (3)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Freetown Corporation budgeted fixed manufacturing costs of $36,000 during 2020. Other information for 2020 includes:
The budgeted denominator level is 2,000 units.
Units produced total 1,600 units.
Units sold total 1,300 units.
Beginning inventory was zero.
The company uses absorption costing and the fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost
of goods sold
The production - volume variance is
(Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar)
OA. $7,200
OB. $5,400
OC. $12,600
OD. SO
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