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The standard costs and actual costs for factory overhead for the manufacture of 2,800 units of actual production are as follows: Standard Costs Fixed overhead

The standard costs and actual costs for factory overhead for the manufacture of 2,800 units of actual production are as follows:

Standard Costs
Fixed overhead (based on 10,000 hours) 3 hours per unit at $0.75 per hour
Variable overhead 3 hours per unit at $1.90 per hour
Actual Costs
Total variable cost, $17,900
Total fixed cost, $8,100

The total factory overhead cost variance is

a.$3,140 unfavorable

b.$1,940 unfavorable

c.$4,340 favorable

d.$3,140 favorable

Which of the following transfer price approaches is used when the transfer price is set at the amount sold to outside buyers?

a.market price

b.negotiated price

c.cost price

d.variable price

Mason Corporation had $1,009,000 in invested assets, sales of $1,250,000, operating income amounting to $249,000, and a desired minimum return on investment of 12%.

The residual income for Mason Corporation is

a.($5,300)

b.$0

c.$179,088

d.$127,920

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