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M30B: MANAGERIAL ACCOUTING CHAPTER 6 PRACTICE PROBLEMS 1. Morgan’s, Inc. has provided you with the following financial information: Budgeted Actual Sales Quantity 6,000 6,200 Sales Price Per Unit $6.00 $5.75 Variable Product Cost Per Unit $2.00 $2.25 Selling Expense (fixed) $3,000 $6,000 Administrative Expense (fixed) $15,000 $14,000 Income Taxes $1,800 $2,000 Required: Prepare a flexible budget. 2. Amos, Inc. uses a standard cost system in which direct material is carried at standard cost. Standards for one unit of product are: standard quantity of 8 ½ gallons and standard price $1.85 per gallon. During March, Amos purchased 150,000 gallons of direct material at a cost of $300,000 and used 150,500 gallons in production of 18,000 units. Required: Calculate the direct materials price and quantity variances and indicate whether the variances are favorable or unfavorable.
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3. Amos, Inc. uses a standard cost system with the following labor standards for one unit of product: standard hours 0.2 and standard wage rate $9. During January, Amos incurred 3,700 hours of direct labor and paid $32,760 in wages in production of 18,000 units.
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