Hi all I have some questions for my managerial accounting course, I was hoping s

Question

Hi all I have some questions for my managerial accounting course, I was hoping someone may be able to check over for me/clarrfiy. Thank you in advance!

1.) A merchanidizing firm's balance sheet reflects an inventory of ?

a.) raw materials

b.) work in process

c.) finsished goods

d.) none of the above

I have none of the above but I wasnt sure if technically the goods sold in the store are considered "finsished goods" the first two I know are specific to a manufacturing company.

Another problem is Tex's applies an overhead rate of $10/unit based on 200 units. If Texs produces 210 units and has a flexible overhead budget of 1,900. The overhead variance is.

a.) 200 favorable

b.) 200 unfavorable

c.) 100 favorable

d.) 100 unfavorable

I originally had 200 favorable because the 210 units would be predicted to be 2,100 and that is 200 more than what the actual cost is, but do we care about how many units were acutally produced when they budgeted for 200 units at 10= 2,000 leading to 100 favorable ?

Thank you again in advance!

Explanation / Answer

1) Finsihed goods since they don't manufacture they just resell ,these finished goods are referred to as merchandise inventory

2)a)200 favourable when we use flexible budget we calculate for actual units hence not 200 units

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