Question 25 options: Zippo, Inc budgeted and incurred (actual) fixed manufacturing overhead costs of $80,000 in 2016. Other information for 2016 follows: Budgeted or planned production 2,000 units Actual production totaled 1,800 units Units sold 1,500 units Beginning Finished Goods Inv. 400 units The company uses absorption costing and fixed manufacturing overhead rate was based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold. Under absorption costing, the production volume variance dollar amount is: The production volume variance is: Type: Favorable or Unfavorable? Which income will be higher? Type: Absorption costing or Variable Costing By how much?
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question 25 options:
Zippo, Inc budgeted and incurred (actual) fixed
Budgeted or planned production 2,000 units
Actual production totaled 1,800 units
Units sold 1,500 units
Beginning Finished Goods Inv. 400 units
The company uses absorption costing and fixed manufacturing overhead rate was based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold.
Under absorption costing, the production volume variance dollar amount is:
The production volume variance is: Type: Favorable or Unfavorable?
Which income will be higher? Type: Absorption costing or Variable Costing
By how much?
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