CHAPTER 9:
RESPONSIBILITY ACCOUNTING
Multiple Choice
c
1. Goal congruence exists when
a. the goals of the company harmonize with each other.
b. the company's managers are pursuing their own goals effectively.
c. the company's managers are pursuing the goals of the company.
d. all of the above are true.
c
2. Goal congruence is most likely to result when
a. reports to managers include all costs.
b. managers' behavior is affected by the criteria used to judge their
performances.
c. performance evaluation criteria encourage behavior in the company's
best interests as well as in the manager's best interests.
d. a manager knows the criteria used to judge his or her performance.
d
3. In
is
a.
b.
c.
d.
responsibility accounting the most relevant classification of costs
fixed and variable.
incremental and nonincremental.
discretionary and committed.
controllable and noncontrollable.
c
4. Which of the following is critically important for a responsibility
accounting system to be effective?
a. Each employee should receive a separate performance report.
b. Service department costs should be allocated to the operating
departments that use the service.
c. Each manager should know the criteria used for evaluating his or her
performance.
d. The details on the performance reports for individual managers should
add up to the totals on the report to their supervisor.
c
5. Which of the following items is LEAST likely to appear on the
performance report of the manager of a product line?
a. Variable manufacturing costs for products in the line.
b. Selling expenses for the line.
c. A share of company-wide advertising.
d. Revenues from the line.
b
6. The sequence that reflects increasing breadth of responsibility is
a. cost center, investment center, profit center.
b. cost center, profit center, investment center.
c. profit center, cost center, investment center.
d. investment center, cost center, profit center.
117
a
7. The criteria used for evaluating performance
a. should be designed to help achieve goal congruence.
b. can be used only with profit centers and investment centers.
c. should be used to compare past performance with current performance.
d. motivate people to work in the company's best interests.
b
8. A balanced scorecard approach to performance measurement
a. can only be used in profit or investment centers.
b. balances financial measures with nonfinancial measures.
c. uses only qualitative data to evaluate performance.
d. uses budgeted data rather than historical data.
b
9. If
a.
b.
c.
d.
a company has a favorable sales volume variance, its
sales price variance is also favorable.
total contribution margin might be less than planned.
total contribution margin will be more than planned.
income will be positive.
c 10. Transfer prices
a. reduce employee turnover.
b. are necessary for investment centers.
c. should encourage the kinds of behavior that upper-level management
wants.
d. are not used for departments with high amounts of fixed costs.
b 11. A transfer price is
a. an accounting device to turn profit
b. the price charged by one segment of
provided to another segment.
c. only useful in a segment that deals
other segments of the same company.
d. the amount charged by a cost center
profit center.
centers into investment centers.
the company for goods or services
with outsiders as well as with
for a service performed for a
c 12. The cost allocation policy most likely to encourage use of a service is
based on
a. budgeted total costs of the service department.
b. actual total costs of the service department.
c. budgeted variable costs for the service department.
d. actual variable costs for the service department.
c 13. Which of the following statements is true?
a. A company changes its total income when it changes the bases used to
allocate indirect costs.
b. A company should select an allocation basis so as to raise or lower
reported income on given products.
c. A company's total income will remain unchanged no matter how indirect
costs are allocated.
d. Costs should be allocated on an "ability-to-bear" basis.
118
a 14. If a company allocates costs of a service department to other
departments, it should
a. consider the likely effects of the allocations on the use of the
services.
b. use the method that best reflects the relative sizes of the
departments.
c. turn the service department into an investment center.
d. allocate only the fixed costs of the service department.
a 15. If a computer department does work for other departments, charging a
flat price per hour, the computer department is
a. an artificial profit center.
b. a cost center.
c. an investment center.
d. none of the above.
a 16. The WORST method of allocating service department costs is
a. to allocate total actual costs based on actual use of the service.
b. to allocate total budgeted costs based on long-term expected use of
the service.
c. to allocate total budgeted costs based on actual use of the service.
d. none of the above, because all the above are equally undesirable.
b 17. As
of
a.
b.
c.
d.
a general rule, the best transfer price to use to transfer the costs
a service center to an operating department is
the price charged by an outside company for the same service.
the price that encourages goal congruence.
one that is based on budgeted variable cost.
one that is based on budgeted total cost.
b 18. Which of the following costs is LEAST likely to appear on the
performance report for the foreman of a production department?
a. Wages of direct laborers.
b. Rent on machinery used in department.
c. Repairs to machinery used in department.
d. Cost of materials used.
d 19. ABC Company operates a factory that makes components for other ABC
factories to assemble. The factory could be treated as
a. a cost center.
b. an artificial profit center.
c. an investment center.
d. any of the above.
d 20. For reports to follow the principles of responsibility accounting, which
of the following must be true?
a. Each segment of the entity is an artificial profit center.
b. The company is decentralized.
c. The company uses transfer prices.
d. The reports show controllable costs separately from noncontrollable
costs.
119
c 21. The effective use of responsibility accounting requires that performance
reports for cost centers
a. show only variable costs.
b. show a fair share of allocated costs.
c. distinguish between controllable and noncontrollable costs.
d. show a fair share of revenues attributable to the center.
b 22. Criteria for evaluating performance should be carefully selected because
a. they must be approved by the IRS.
b. a manager's behavior can be affected by the criteria used to judge
his or her performance.
c. managers may find out what they are.
d. stockholders inquire about them at annual meetings.
d 23. Which
costs
a. To
b. So
to
c. To
d. To
b 24. An
a.
b.
c.
d.
of the following is NOT a good reason for allocating indirect
to operating departments?
remind managers of the need to cover indirect costs.
that operating managers will encourage service department managers
keep costs down.
encourage managers to use services wisely.
determine the true costs of operating departments.
artificial profit center
has no investment.
does not provide its goods or services outside the entity.
cannot control its costs.
could not be operated as a cost center.
c 25. A responsibility center is
a. any department.
b. any manager.
c. any area of activity for which a manager is responsible.
d. only large departments.
a 26. ABC's actual selling price was less than planned and actual unit volume
more than planned. Therefore,
a. ABC had a favorable sales volume variance.
b. ABC's total contribution margin was more than planned.
c. ABC had a favorable sales price variance.
d. ABC's actual total sales equaled planned total sales.
b 27. The term "dual rates" refers to
a. allocating costs to several operating departments.
b. allocating fixed costs based on capacity requirements and variable
costs based on use.
c. allocating both actual costs and budgeted costs.
d. using the budgeted rate to allocate some costs, the actual rate to
allocate others.
a 28. Which of the following methods of allocating the costs of service
departments provides the broadest recognition of departments served?
a. Reciprocal allocation.
b. Step-down allocation.
c. Direct allocation.
d. Arbitrary allocation.
d 29. Which of the following is a good reason for allocating indirect costs to
120
operating departments?
a. The company could lose money if the operating departments do not pay
for the services they use.
b. To remind managers of the need to cover indirect costs.
c. To encourage managers to use more services.
d. To determine the true costs of operating departments.
b 30. When a manager takes an action that benefits his or her responsibility
center, but not the company as a whole,
a. it is a non-controllable action.
b. there is a lack of goal congruence.
c. the center must be an artificial profit center.
d. the manager should be fired.
d 31. Which of the following is a good reason for NOT allocating indirect
costs to operating departments?
a. The company saves money if the operating departments do not pay for
the services they use.
b. To remind managers of the need to cover indirect costs.
c. To encourage managers to use more services.
d. The costs are not controllable by the operating departments.
d 32. Which of the following is a good reason for NOT allocating indirect
costs to operating departments?
a. To remind managers that revenues must cover indirect costs.
b. To recognize that operating departments benefit from the services.
c. To encourage managers to use services wisely.
d. Because allocating them might prompt operating managers to use
nonincremental costs in making decisions.
b 33. A profit center is a responsibility center
a. that sells its output outside the company.
b. whose manager is responsible for both revenues and costs.
c. that provides a service to other responsibility centers.
d. within an investment center.
d 34. An
a.
b.
c.
d.
investment center is
larger than a cost center.
larger than a profit center.
seldom the responsibility of a single manager.
not truthfully characterized in any of the above statements.
a 35. The managerial level at which a particular cost is controllable
a. varies from company to company.
b. depends on whether the cost is fixed or variable.
c. depends on whether the cost is direct or indirect.
d. is irrelevant to the preparation of performance reports.
d 36. If
a.
b.
c.
d.
at all possible, a manager's performance report should
consider the results that the manager can control.
consider only the results that the manager can control.
not be influenced by the results of decisions made by other managers.
reflect all of the above characteristics.
121
d 37. Comparing budgeted and actual amounts is important in evaluating
the performance of
a. the manager of a cost center.
b. the manager of a profit center.
c. the manager of an investment center.
d. any manager.
c 38. Direct, step-down, and reciprocal are names for
a. the allocation methods most likely to produce goal congruence.
b. transfer-pricing methods.
c. methods for allocating costs of service departments to operating
departments.
d. alternative organizational structures.
b 39. Cascade Company had the following results in June.
Sales
Variable costs
Contribution margin
Planned
------$80,000
50,000
------$30,000
=======
Actual
------$78,900
48,500
------$30,400
=======
Planned sales were 10,000 units; actual sales were 9,700 units. The
sales price variance is
a. $1,100 U.
b. $1,000 F.
c. $900 U.
d. $400 F.
c 40. Cascade Company had the following results in June.
Sales
Variable costs
Contribution margin
Planned
------$80,000
50,000
------$30,000
=======
Actual
------$78,900
48,500
------$30,400
=======
Planned sales were 10,000 units, actual sales were 9,700 units. The
sales volume variance is
a. $1,100 U.
b. $1,000 F.
c. $900 U.
d. $400 F.
122
b 41. Certainty Stores has three stores and one service center. The percentage
of services used in the current year are Store X, 35%; Store Y, 40%; and
Store Z, 25%. The service center costs were budgeted at $160,000 fixed
and $240,000 variable. Actual fixed costs were $140,000 and actual
variable costs were $270,000. Actual service center costs are allocated
to the stores based on actual usage of the service center. Service
center costs allocated to Store Y are
a. $64,000.
b. $164,000.
c. $410,000.
d. some other number.
c 42. Certainty Stores has three stores and one service center. The percentage
of services used in the current year are Store X, 35%; Store Y, 40%; and
Store Z, 25%. The service center costs were budgeted at $350,000 fixed
and $250,000 variable. Actual fixed costs were $370,000 and actual
variable costs were $280,000. Budgeted service center costs are
allocated to the stores based on actual usage of the service center.
Service center costs allocated to Store Y are
a. $140,000.
b. $148,000.
c. $240,000.
d. $260,000.
c 43. Wabasha Co. has two service departments (A and B) and two producing
departments (X and Y). Data provided are as follows:
Service Depts. Operating Depts.
-------------- --------------A
B
X
Y
------- ------ ------ -----Direct costs
$240
$400
Services performed by Dept. A
40%
40%
20%
Services performed by Dept. B.
20%
70%
10%
Wabasha uses the direct method to allocate service department costs. The
service department cost allocated to Department Y is
a. $88.
b. $96.
c. $130.
d. $240.
123
c 44. Wabasha Co. has two service departments (A and B) and two producing
departments (X and Y). Data provided are as follows:
Service Depts. Operating Depts.
-------------- --------------A
B
X
Y
------- ------ ------ -----Direct costs
$250
$400
Services performed by Dept. A
40%
40%
20%
Services performed by Dept. B.
20%
70%
10%
Wabasha uses the step-down method to allocate service department costs.
Department A costs are allocated first. The service department cost
allocated to Department Y is
a. $90.
b. $97.50.
c. $112.50.
d. $130.
c 45. Wabasha Co. has two service departments (A and B) and two producing
departments (X and Y). Data provided are as follows:
Service Depts. Operating Depts.
-------------- --------------A
B
X
Y
------- ------ ------ -----Direct costs
$150
$300
Services performed by Dept. A
40%
40%
20%
Services performed by Dept. B.
20%
70%
10%
Wabasha uses the reciprocal method to allocate service department costs.
The service department cost allocated to Department Y is
a. $60.
b. $75.
c. $85.
d. $135.
d 46. Olson Stores has three stores and one service center. The percentage of
services used in the current year are Store A, 40%; Store B, 25%; and
Store C, 45%. The expected long-term budgeted usages are Store A, 30%;
Store B, 30%; and Store C, 40%. The service center costs were budgeted
at $450,000 fixed and $550,000 variable. Actual fixed costs were
$430,000 and actual variable costs were $570,000. Olson allocates the
budgeted variable costs of the central purchasing unit based on actual
use of the unit's services, and allocates budgeted fixed costs based on
expected long-term use of the unit's services. Service center costs
allocated to Store A are
a. $135,000.
b. $220,000.
c. $300,000.
d. $355,000.
124
b 47. Olson Stores has three stores and one service center. The percentage of
services used in the current year are Store A, 45%; Store B, 35%; and
Store C, 20%. The expected long-term budgeted usages are Store A, 30%;
Store B, 40%; and Store C, 30%. The service center costs were budgeted
at $450,000 fixed and $550,000 variable. Actual fixed costs were
$430,000 and actual variable costs were $570,000. Olson allocates the
budgeted variable costs of the central purchasing unit based on actual
use of the unit's services, and allocates budgeted fixed costs based on
expected long-term use of the unit's services. Service center costs
allocated to Store B are
a. $350,000.
b. $372,500.
c. $400,000.
d. $550,000.
d 48. Basin Co. has two service departments (A and B) and two producing
departments (X and Y). Data provided are as follows:
Service Depts. Operating Depts.
A
B
X
Y
------- ------ ------ -----Direct costs
$200
$400
Services performed by Dept. A
20%
40%
40%
Services performed by Dept. B.
30%
60%
10%
Basin uses the direct method to allocate service department costs. The
service department cost allocated to Department X is
a. $280.
b. $300.
c. $320.
d. $443.
a 49. Basin Co. has two service departments (A and B) and two producing
departments (X and Y). Data provided are as follows:
Service Depts. Operating Depts.
A
B
X
Y
------- ------ ------ -----Direct costs
$200
$400
Services performed by Dept. A
20%
40%
40%
Services performed by Dept. B.
30%
60%
10%
Basin uses the step-down method to allocate service department costs.
Department A costs are allocated first. The service department cost
allocated to Department X is
a. $457.
b. $443.
c. $320.
d. $300.
125
c 50. Basin Co. has two service departments (A and B) and two producing
departments (X and Y). Data provided are as follows:
Service Depts. Operating Depts.
A
B
X
Y
------- ------ ------ -----Direct costs
$200
$400
Services performed by Dept. A
20%
40%
40%
Services performed by Dept. B.
30%
60%
10%
Basin uses the reciprocal method to allocate service department costs.
The service department cost allocated to Department X is
a. $300.
b. $340.
c. $417.
d. $468.
True-False
F
1. All responsibility centers are either natural or artificial.
F
2. The sales volume variance is the difference between actual and planned
unit sales multiplied by the actual contribution margin per unit.
F
3. The principle of controllability is less important to the internal
reporting for a centralized company than for a decentralized one.
F
4. Allocated costs are less important to the internal reporting for a
centralized company than for a decentralized company.
F
5. Achieving goal congruence is less important in a centralized
organization than in a decentralized one.
T
6. It is not always possible to separate the variable and fixed components
of actual costs.
F
7. A profit center will always have sales to outside customers.
T
8. The sales price variance is the difference between the actual selling
price and the planned selling price multiplied by actual units sold.
T
9. The direct method of allocating service department costs ignores all of
the interactions between service departments.
F 10. The reciprocal method of allocating service department costs considers
only the usage by the producing departments in determining the
allocations.
126
Problems
1. The following data are for Billings Stores, which has two stores and one
service center.
Helena
Butte
----------Percentage of services used in current year
20%
80%
Expected long-term use of services
30%
70%
Budgeted central purchasing costs were $225,000 fixed and $125,000
variable. Actual fixed costs were $240,000 and actual variable costs were
$115,000. The managers wish to allocate the actual central purchasing
costs to the stores based on actual use of the central purchasing service.
a. Compute the allocation to the Helena store.
b. Compute the allocation to the Butte store.
SOLUTION:
a. To Helena:
b. To Butte:
$71,000
[20% x ($240,000 + $115,000)]
$284,000
[80% x ($240,000 + $115,000)]
2. The following data are for Billings Stores, which has two stores and one
service center.
Helena
Butte
----------Percentage of services used in current year
20%
80%
Expected long-term use of services
30%
70%
Budgeted central purchasing costs were $225,000 fixed and $125,000
variable. Actual fixed costs were $240,000 and actual variable costs were
$115,000. The company wishes to allocate the budgeted variable costs of
the central purchasing unit based on actual use of the unit's services and
to allocate budgeted fixed costs based on expected long-term use of the
unit's services.
a. Compute the total cost allocated to the Helena store for the services of
the central purchasing unit.
b. Compute the total cost allocated to the Butte store for the services of
the central purchasing unit.
SOLUTION:
a. To Helena:
b. To Butte:
$92,500
($125,000 x 20% + $225,000 x 30%)
$257,500
($125,000 x 80% + $225,000 x 70%)
127
3. Following are data about Alphabet Co.'s two service departments and two
operating departments.
Service Depts. Operating Depts.
-------------- --------------A
B
X
Y
------- ------ ------ -----Direct costs
$200
$500 $1,500 $2,000
Services performed by Dept. A
20%
40%
40%
Services performed by Dept. B.
10%
90%
a. Alphabet allocates costs of its service departments using the direct
method of allocation. Find the total cost that will be allocated to
Dept. X.
b. Alphabet allocates the costs of its service departments using the stepdown method, beginning with Dept. A. Find the total amount of cost that
will be allocated to Dept. X.
SOLUTION:
a. Allocated to X:
$600
b. Allocated to X:
$620
A's direct cost
A's cost allocated
B's direct cost
Total for allocating
B's costs allocated
[($200 x 40/(40 + 40)] + [$500 x (90/90)]
A
---$200
(200)
B
----
X
----
Y
----
$ 40
500
----$540
(540)
$80
$80
540
---$620
0
---
Allocated to X
Allocated to Y
$80
4. Following are data about Alphabet Co.'s two service departments and two
operating departments.
Service Depts. Operating Depts.
-------------- --------------A
B
X
Y
------- ------ ------ -----Direct costs
$400 $1,000 $3,000 $4,000
Services performed by Dept. A
20%
40%
40%
Services performed by Dept. B.
10%
90%
Alphabet allocates costs of its service departments using the reciprocal
method of allocation. Find the total cost that will be allocated to Dept.
X.
128
SOLUTION:
Allocated to X: $1,195.92
A = $400 + .1B
A = 510.20
B = $1,000 + .2A
B = 1,102.04
Direct costs
A's cost allocated
B's costs allocated
A
B
------------$400.00 $1,000.00
(510.20)
102.04
110.20 (1,102.04)
Allocated to X
Allocated to Y
X
-------
Y
-------
$204.08
991.84
------$1,195.92
$204.08
0
------$204.08
5. The following data are for Lexington Stores, which has two stores and one
service center.
Concord
Graham
-----------Percentage of services used in current year
40%
60%
Expected long-term use of services
30%
70%
Budgeted central purchasing costs were $100,000 fixed and $75,000 variable.
Actual fixed costs were $140,000 and actual variable costs were $105,000.
The managers wish to allocate the actual central purchasing costs to the
stores based on actual use of the central purchasing service.
a. Compute the allocation to the Concord store.
b. Compute the allocation to the Graham store.
SOLUTION:
a. To Concord:
b. To Graham:
$98,000
[40% x ($140,000 + $105,000)]
$147,000
[60% x ($140,000 + $105,000)]
6. The following data are for Lexington Stores, which has two stores and one
service center.
Concord
Graham
-----------Percentage of services used in current year
40%
60%
Expected long-term use of services
30%
70%
Budgeted central purchasing costs were $100,000 fixed and $75,000 variable.
Actual fixed costs were $140,000 and actual variable costs were $105,000.
The company wishes to allocate the budgeted variable costs of the central
purchasing unit based on actual use of the unit's services and to allocate
budgeted fixed costs based on expected long-term use of the unit's
services.
a. Compute the total cost allocated to the Concord store for the services
of the central purchasing unit.
129
b. Compute the total cost allocated to the Graham store for the services of
the central purchasing unit.
SOLUTION:
a. To Concord:
b. To Graham:
$60,000
($75,000 x 40% + $100,000 x 30%)
$115,000
($75,000 x 60% + $100,000 x 70%)
7. Following are data about Hamilton Co.'s two service departments and two
operating departments.
Service Depts. Operating Depts.
-------------- --------------A
B
X
Y
------- ------ ------ -----Direct costs
$400
$600 $2,000 $3,000
Services performed by Dept. A
30%
30%
40%
Services performed by Dept. B.
20%
70%
10%
a. Hamilton allocates costs of its service departments using the direct
method of allocation. Find the total cost that will be allocated to each
of the operating departments.
b. Hamilton allocates the costs of its service departments using the stepdown method, beginning with Dept. A. Find the total amount of cost that
will be allocated to each of the operating departments.
c. Hamilton allocates costs of its service departments using the reciprocal
method of allocation. Find the total cost that will be allocated to each
of the operating departments.
SOLUTION:
a. Allocated to X:
Allocated to Y:
$696.43 {$400 x [30/(30 + 40)] + $600 x [70/(70 + 10)]}
$303.57 {$400 x [40/(30 + 40)] + $600 x [10/(70 + 10)]}
b. Allocated to X:
$750.00, Allocated to Y: $250.00
A
B
X
Y
------------- ------A's direct cost
$400
A's cost allocated
(400) $120
$120.00 $160.00
B's direct cost
600
---Total for allocating
$720
B's costs allocated
(720)
630.00
90.00
-----------Allocated to X
$750.00
Allocated to Y
$250.00
130
c. Allocated to X:
A = $400 + .2B
B = $600 + .3A
$702.13, Allocated to Y:
A = 553.19
B = 765.96
Direct costs
A's cost allocated
B's costs allocated
A
------$400.00
(553.19)
153.19
B
------$600.00
165.96
(765.96)
Allocated to X
Allocated to Y
$297.87
X
-------
Y
-------
$165.96
536.17
------$702.13
$221.27
76.60
------$297.87
8. Following are data about Hawley Co.'s two service departments and three
operating departments.
Service Depts.
Operating Depts.
-------------- ---------------------A
B
X
Y
Z
------- ------ ------ ------ -----Direct costs
$400
$600
Services performed by Dept. A
30%
40%
20%
10%
Services performed by Dept. B.
40%
20%
20%
20%
Hawley allocates costs of its service departments using the reciprocal
method of allocation. Find the total costs that will be allocated to each
of the operating departments.
SOLUTION:
Allocated to x: $454.55, allocated to Y:
A = $400 + .4B
A = 727.27
B = $600 + .3A
B = 818.18
Direct costs
A's cost allocated
B's costs allocated
A
------$400.00
(727.27)
327.27
$309.09, Allocated to Z: $236.36
B
------$600.00
218.18
(818.18)
Allocated to X
Allocated to Y
Allocated to Z
X
-------
Y
-------
Z
-------
$290.91
163.64
------$454.55
$145.45
163.64
-------
$ 72.72
163.64
-------
$309.09
$236.36
9. Following are data about Augusta Co.'s three service
operating departments.
Service Depts.
--------------------A
B
C
------- ------ -----Direct costs
$150
$300
$350
Services performed by Dept. A
20%
30%
Services performed by Dept. B.
10%
20%
Services performed by Dept. C
30%
40%
131
departments and two
Operating Depts.
---------------X
Y
------ -----40%
50%
15%
10%
20%
15%
a. Augusta allocates costs of its service departments using the direct
method of allocation. Find the total cost that will be allocated to
Dept. X.
b. Augusta allocates the costs of its service departments using the stepdown method, beginning with Dept. A followed by Dept. B. Find the total
amount of cost that will be allocated to Dept. X.
SOLUTION:
a. Allocated to X: $509.29
$350 x [15/(15 + 15)]}
b. Allocated to X:
{$150 x [40/(40 + 10)] + $300 x [50/(50 + 20)] +
$477.50
A's direct cost
A's cost allocated
B's direct cost
A
---$150
(150)
Total for allocating
B's costs allocated
C's direct cost
B
----
C
-------
X
-------
Y
-------
$ 30
300
---$330
(330)
$ 45.00
$ 60.00
$ 15.00
183.34
73.33
234.16
-----$477.50
234.16
------
Total for allocating
C's costs allocated
73.33
350.00
------$468.33
(468.33)
Allocated to X
Allocated to Y
$322.50
10. Osseo Company had the following results in June.
Sales
Variable costs at $5 per unit
Contribution margin
Planned
-------$160,000
100,000
-------$ 60,000
========
Actual
-------$162,500
102,500
-------$ 60,000
========
Planned sales were 20,000 units, actual sales were 20,500 units.
a. Find the sales price variance.
Indicate F or U
b. Find the sales volume variance.
Indicate F or U
SOLUTION:
a. $1,500 U
{20,500 x [($162,500/20,500) - $8]}
b. $1,500 F
[$3 x (20,500 - 20,000)]
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