A companys flexible budget for 14,000 units of production showed sales, $56,000; variable costs, $21,000; and fixed costs, $16,100. The income expected if the company produces and sells 18,000 units is:

Multiple Choice

• $21,333.

• $18,900.

• $28,900.

• $2,667.

• $47,250.

A company applies overhead using machine hours and shows the following information. Compute the variable overhead variance.

Actual hours of machine use	10,400	hours
Standard hours of machine use (for actual production)	11,000	hours
Actual variable overhead rate per machine hours	$4.65
Standard variable overhead rate per machine hour	$4.50

Multiple Choice

• $1,140F.

• $1,140U.

• $4,350F.

• $4,350U.

• $2,790U.

A companys fixed budget (based on 8,500 units) follows. Compute total fixed costs.

Fixed Budget
Sales (8,500 $680 per unit)	$ 5,780,000
Costs
Direct materials	578,000
Direct labor	935,000
Indirect materials	369,000
Supervisory salary	149,000
Sales commissions	299,000
Shipping	327,000
Administrative salaries	439,000
Depreciation Office equipment	89,000
Insurance	59,000
Office rent	91,000
Income	$ 2,445,000

Multiple Choice

• $736,000.

• $768,000.

• $1,115,000.

• $827,000.

• $678,000.