1)Which of the following represents the correct order for preparing the indicated budget documents for a manufacturing company?
A. Sales budget, cash budget, direct materials budget, direct labor budget
B. Sales budget, cash budget, production budget, direct materials budget
C. Production budget, sales budget, direct materials budget, direct labor budget
D. Production budget, direct labor budget, direct materials budget, cash budget
2). Ideal standards
A. generally provide the best motivation for workers.
B. make allowances for waste, spoilage and machine breakdowns.
C. are better suited for cash budgeting than practical standards.
D. aid the planning of managers seeking continual improvement.
3). ABC Company planned to produce 3,000 cell phone covers during November. The standards for one cell phone cover specify 6 ounces of resin at $0.30 per ounce. Actual production in November was 3,100 cell phone covers. There was an unfavorable materials price variance of $380 and a favorable materials quantity variance of $120. Based on these variances one could conclude
A. more materials were purchased than were used.
B. more materials were used than were purchased.
C. the actual cost per pound for materials was less than the standard cost per pound
D. the actual usage of materials was less than the standard allowed.
4). The following variable overhead standards have been established for a particular product:
Standard variable overhead rate $1.70 per direct labor hour
Standard labor-hours per unit of output .80 hours per unit
Budgeted production 9,800 units
The following data pertain to operations concerning the product for the last month:
Actual hours worked 7,980
Actual total variable overhead cost $14,364
Actual output 9,900 units
What is the variable overhead rate variance?
A. 798 U
B. 792 U
C. 102U
D. 238 U
1)Which of the following represents the correct order for preparing the indicated budget documents for a manufacturing company?
A. Sales budget, cash budget, direct materials budget, direct labor budget
B. Sales budget, cash budget, production budget, direct materials budget
C. Production budget, sales budget, direct materials budget, direct labor budget
D. Production budget, direct labor budget, direct materials budget, cash budget
2). Ideal standards
A. generally provide the best motivation for workers.
B. make allowances for waste, spoilage and machine breakdowns.
C. are better suited for cash budgeting than practical standards.
D. aid the planning of managers seeking continual improvement.
3). ABC Company planned to produce 3,000 cell phone covers during November. The standards for one cell phone cover specify 6 ounces of resin at $0.30 per ounce. Actual production in November was 3,100 cell phone covers. There was an unfavorable materials price variance of $380 and a favorable materials quantity variance of $120. Based on these variances one could conclude
A. more materials were purchased than were used.
B. more materials were used than were purchased.
C. the actual cost per pound for materials was less than the standard cost per pound
D. the actual usage of materials was less than the standard allowed.
4). The following variable overhead standards have been established for a particular product:
Standard variable overhead rate $1.70 per direct labor hour
Standard labor-hours per unit of output .80 hours per unit
Budgeted production 9,800 units
The following data pertain to operations concerning the product for the last month:
Actual hours worked 7,980
Actual total variable overhead cost $14,364
Actual output 9,900 units
What is the variable overhead rate variance?
A. 798 U
B. 792 U
C. 102U
D. 238 U
Related questions
1)The opportunity cost ofmaking a component part in a factory with no excess capacity isthe:
net benefit foregone fromthe best alternative use of the capacity required. | |
total manufacturing costof the component. | |
fixed manufacturing costof the component. | |
variable manufacturingcost of the component. |
2) A company has astandard cost system in which fixed and variable manufacturingoverhead costs are applied to products on the basis of directlabor-hours. A fixed manufacturing overhead volume variance willnecessarily occur in a month in which there is a fixedmanufacturing overhead budget variance.
True | |
False | |
3) Todco planned toproduce 3,000 units of its single product, Teragram, duringNovember. The standard specifications for one unit of Teragraminclude six pounds of material at $0.30 per pound. Actualproduction in November was 3,100 units of Teragram. The accountantcomputed a favorable materials purchase price variance of $380 andan unfavorable materials quantity variance of $120. Based on thesevariances, one could conclude that:
more materials were usedthan were purchased. | |
more materials werepurchased than were used. | |
the actual usage ofmaterials was less than the standard allowed. | |
the actual cost ofmaterials was less than the standard cost. |
4)The cost of a resourcethat has no alternative use in a make or buy decision problem hasan opportunity cost of zero.
True | |
False |
5)An unfavorable directlabor efficiency variance could be caused by:
an unfavorable variableoverhead rate variance. | |
a favorable materialsquantity variance. | |
an unfavorable materialsquantity variance. | |
a favorable variableoverhead rate variance. |
6) The fixed manufacturingoverhead volume variance will be unfavorable if production volumeis less than sales volume.
True | |
False |
7) If by dropping aproduct a firm can avoid more in fixed costs than it loses incontribution margin, then the firm is better off economically ifthe product is dropped.
True | |
False |
8) Joint costs are notrelevant to the decision to sell a product at the split-off pointor to process the product further.
True | |
False |
9) When a company has aproduction constraint, the product with the highest contributionmargin per unit of the constrained resource should be given highestpriority.
True | |
False |
10) An avoidable cost is acost that can be eliminated (in whole or in part) as a result ofchoosing one alternative over another.
True | ||
False | ||
11) The Malcolm Companyuses a standard cost system in which manufacturing overhead costsare applied to products on the basis of standard direct labor-hours(DLHs). The standards call for 4 hours of direct labor per unitproduced. The following data pertain to the company's manufacturingoverhead for the month of July: | ||
Actual fixedmanufacturing overhead costs incurred | $28,460 | |
Denominatoractivity | 6,305 | DLHs |
Number ofunits produced | 3,000 | units |
Budgetvariance | $3,240 | Unfavorable |
The Fixed component ofthe predetermined overhead rate for June is: (Round your answer to 2 decimal places.) |
$4.00 | |
$4.77 | |
$4.51 | |
$4.11 |
