MULTIPLE CHOICE:
Use the following information for questions 12-14
Healthy Co. has the following standard cost to produce a kingsize party sub.
DM 4 lbs @ $3.00 per lb. = $12.00 per sub
DL ½ hour @ $8.00 per hour = $4.00 per sub
During December, Healthy Co. produced 1,000 party subs, boughtand used 4,100 of meat at $3.20 per lb. and used 490 hours of laborat a total cost of $4,018.
12. What is the direct material price variance?
A. $800 favorable
B. $820 unfavorable
C. $800 unfavorable
D. $820 favorable
13. What is the direct labor rate variance?
A. $98 favorable
B. $98 unfavorable
C. $100 favorable
D. $100 unfavorable
14. What is the direct labor efficiency variance?
A. $80 favorable
B. $80 unfavorable
C. $82 favorable
D. $82 unfavorable
15. In capital budgeting decisions, the focus is on:
A. Cash flow
B. Accounting net income
C. Working capital
D. Inventory
E. Raw material
16. Which department may be responsible for an unfavorablematerials quantity variance?
A. finance department
B. production department
C. purchasing department
D. sales department
| MULTIPLE CHOICE: Use the following information for questions 12-14 Healthy Co. has the following standard cost to produce a kingsize party sub. DM 4 lbs @ $3.00 per lb. = $12.00 per sub DL ½ hour @ $8.00 per hour = $4.00 per sub During December, Healthy Co. produced 1,000 party subs, boughtand used 4,100 of meat at $3.20 per lb. and used 490 hours of laborat a total cost of $4,018. |
| 12. What is the direct material price variance? A. $800 favorable B. $820 unfavorable C. $800 unfavorable D. $820 favorable |
| 13. What is the direct labor rate variance? A. $98 favorable B. $98 unfavorable C. $100 favorable D. $100 unfavorable |
| 14. What is the direct labor efficiency variance? A. $80 favorable B. $80 unfavorable C. $82 favorable D. $82 unfavorable |
| 15. In capital budgeting decisions, the focus is on: A. Cash flow B. Accounting net income C. Working capital D. Inventory E. Raw material |
| 16. Which department may be responsible for an unfavorablematerials quantity variance? A. finance department B. production department C. purchasing department D. sales department |
Related questions
1. Tommy's Toys produces two types of toys: trains and dolls.Tommy's uses stainless steel to manufacture the trains and plasticto manufacture the dolls. Information regarding the usage of steeland plastic for the past year follows:
Product Names | Steel | Plastic |
Direct materials information | ||
Standard pounds per unit | 2 lb. | 1.0 lb. |
Standard Price (SP) per pound | $3.00 | ? |
Actual Quantity (AQ) used per unit | 3.0 lb. | 3.00 lb. |
Actual Price (AP) paid for material | $1.75 | $2.25 |
Actual Quantity Purchased (AQP) and used | 2,800 lb. | 800 lb. |
Price variance | ? | $1,200 F |
Quantity variance | $900 U | ? |
Flexible budget variance | ? | $412 F |
Number of units produced | 300 | 525 |
What is the direct materials flexible budget variance for steelused to manufacture the trains?
| A. $4,400 favorable | |
| B. $2,600 unfavorable | |
| C. $2,600 favorable | |
| D. $4,400 unfavorable |
2. Sparky the Electrician specializes in rewiring historichouses. Sparky recently purchased a new wire-pulling device thatwill decrease the time needed to complete each job and increasetotal revenues. The device will cost $5,577 and will increase netcash flows by $1,690 per year. The new device has a useful life of7 years and a residual value of $0. What is the payback period forthe new wire-pulling device?
| A. 3.12 years | |
| B. 2.80 years | |
| C. 3.48 years | |
| D. 3.30 years |
3. Sharon Corporation collects 10% in the second month followingsale, 40% in the month following sale, and 40% of a month's salesin the month of sale. The company has found that 10% of their salesare uncollectible. Budgeted sales for the upcoming four monthsare:
August budgeted sales | $280,000 |
September budgeted sales | $350,000 |
October budgeted sales | $380,000 |
November budgeted sales | $240,000 |
The amount of cash that will be collected in November isbudgeted to be
| A. $316,000 | |
| B. $96,000 | |
| C. $283,000 | |
| D. $216,000 |
4. Suppose Whole Foods is considering investing inwarehouse-management software that costs $900,000; has $40,000residual value; and should lead to cash cost savings of $180,000per year for its 5-year life. In calculating the ARR, which of thefollowing figures should be used as the equation's denominator?
| A.$220,000 | |||||||||
| B. $180,000 | |||||||||
| C. $40,000 | |||||||||
| D. $900,000 5. All of the following budgets are prepared by merchandisingcompanies except
|
6. The Stallard Corporation manufactures Product X that consumesa large amount of overhead. For the month of October, Stallardproduced 14,200 units of Product X and incurred actual overheadcosts of $269,000. The standard costs developed for Product X byStallard follow:
Standard direct labor hours per unit | 4 |
Standard direct labor rate per hour | $11.00 |
Standard overhead hours per unit | 8 |
Standard overhead rate per hour | $4.80 |
What was the total variable overhead variance for Product X inOctober?
| $276,280 favorable | |
| $200,840 favorable | |
| $276,280 unfavorable | |
| $200,840 unfavorable |
1. The following data relate to Logan Electric and its LightbulbDivision.
Lightbulb Division sales | $8,500,000 |
Lightbulb Division operating income | $510,000 |
Lightbulb Division total assets | $2,500,000 |
Lightbulb Division current liabilities | $560,000 |
Corporate target rate of return | 16% |
Corporate weighted average cost of capital | 13% |
Corporate effective tax rate | 45% |
What is the Lightbulb Division's capital turnover?
| A. 3.4 | |
| B. 4.5 | |
| C. 16.7 | |
| D. 4.9 |
2. A favorable direct labor efficiency variance might indicatethat
| A. higher skilled workers were usedthat performed the task faster than expected. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| B. higher skilled workers were usedthat performed the task slower than expected. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| C. lower skilled workers were paida higher wage than expected. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| D. lower skilled workers were paid a lower wage thanexpected. 3. Mockingbird Company expects to sell 5,100 bird perches inJanuary and 9,000 in February for $3 each. What will be the totalsales revenue reflected in the sales budget for those months?
|
1. Which of the following is not part of theoperating budget?
| A. Budgeted income statement | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| B. Sales budget | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| C. Direct materials budget | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| D. Cash budget 2. All of the following budgets are prepared by merchandisingcompanies except
|
