CH22-24 Quiz Solutions

CH22-24 Quiz Solutions - 1) A company's flexible budget for...

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1) A company's flexible budget for 12,000 units of production showed sales of 48,000; variable costs o The operating income expected if the company produces and sells 16,000 units is: First, make a table for the flexible budget and determine per unit costs Per/Unit Units Produced 12,000 Sales 48,000 4.00 Variable Costs 18,000 1.50 Fixed Costs 16,000 Operating Income 14,000 Update flexible budget with the new number of units produced (16,000) Per/Unit Units Produced 16,000 Sales 64,000 4.00 Variable Costs 24,000 1.50 Fixed Costs 16,000 Operating Income 24,000 2) Bradford company budgeted 4,000 pounds of material costing $5 per pound to produce 2,000 units. What is the direct materials quantity variance? Direct Materials Quantity Variance = (Standard Material Used X Standard Material Cost) - (Actua Actual DM Quantity 4,500 Standard Quantity 4,000 Standard Price 5.00 Variance (2,500) In this case, the negative indicates unfavorable variance For the sake of making this review useful, here is the equation for Direct Materials Price Variance Direct Materials Price Variance = (Actual Materials Used X Standard Material Cost) - (Actual Mat
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CH22-24 Quiz Solutions - 1) A company's flexible budget for...

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