1. It is acceptable for a profit center to have:

A. "cost over runs" if they are coupled with gains in revenue and profitability.

B. no concern with total cost incurrence.

C. no regard for flexible budgeting.

D. "cost under runs" but not "cost over runs."

E. None of these.

2. For the month of April, budgeted sales were $100,000 and budgeted cost of goods sold was $80,000. Actual sales were $80,000 and actual cost of goods sold amounted to $90,000. In preparing its monthly performance report, what correct analysis outcome will you derive based on the information provided:

A. a favorable sales variance of $10,000.

B. an unfavorable sales variance of $20,000.

C. None of these.

D. a favorable sales variance of $20,000.

E. an unfavorable sales variance of $10,000.

3. Seattle Company has developed standard overhead costs based on a capacity of 180,000 direct labor hours. 2 hours are required for each unit produced. The variable overhead is applied at $3 per hour. The fixed overhead is applied at $5 per hour. During April, 80,000 units were actually produced, and required 165,000 actual labor hours. Actual fixed overhead was $910,000, and variable overhead was $468,000. Budgeted fixed overhead was $900,000. How much is the fixed overhead spending variance?

A. $5,000 unfavorable

B. $20,000 favorable

C. insufficient information provided to determine a variance

D. $10,000 Unfavorable

E. $10,000 favorable