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ACG 2071 - Review Questions Test 3 - Solutions Spring 2010 Chapter 11 1. Cincinnati Company employs a standard cost system in which direct materials inventory is carried at standard cost. The company has established the following standard for the material costs of one unit of product: Standard Quantity Standard Price Standard Cost Direct materials 6.0 pounds $7.00/pound $42.00 During June, the company purchased 165,000 pounds of direct material at a total cost of $1,171,500. The company manufactured 25,000 units of product during June using 151,000 pounds of direct materials. (Note that this is the same data that was provided for the previous question.) The direct material quantity variance for June is: 2. Refer to the previous question. The direct materials price variance is: 3. Tulsa Company employs a standard cost system in which direct materials inventory is carried at standard cost. The company has established the following standard for the direct labor costs of one unit of product: Standard Quantity Standard Price Standard Cost Direct labor 1.3 hours $ 22.00/hour $28.60 The total factory wages for June were $800,000, 90 percent of which were for direct labor. The company manufactured 25,000 units of product during June using 32,000 direct labor hours. The direct labor rate variance for June is: 4. Refer to the previous question. The direct labor efficiency variance is: 5. Columbus Company reported a favorable materials price variance and an unfavorable materials quantity variance. Based on these variances, you can conclude that: Chapter 12 6. The performance of the manager of Division A is measured by residual income. Which of the following would increase 6.... View Full Document

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