I-Rev8 - LESSON 8 Review material Review questions Question...

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LESSON 8 Review material Review questions Question 1 — Multiple choice Use the following information to answer questions (a), (b), and (c): Leather World Company manufactures leather coats. The following information pertains to the company's manufacturing overhead data. Budgeted output units 90,000 coats Budgeted machine-hours 30,000 hours Budgeted variable manufacturing overhead costs for 90,000 fixtures 241,875 Actual output units produced 132,000 coats Actual machine-hours used 30,000 Actual variable manufacturing overhead costs 363,000 a. What is Leather World's variable manufacturing overhead static budget variance? 1) €121,125 favourable 2) €121,125 unfavourable 3) €120,725 favourable 4) €120,725 unfavourable b. What is the variable manufacturing overhead flexible-budget variance? 1) €8,250 favourable 2) €7,500 favourable 3) €8,250 unfavourable 4) €7,500 unfavourable c. What is Leather World's variable manufacturing overhead sales-volume variance? 1) €92,875 unfavourable 2) €92,875 favourable 3) €112,875 unfavourable 4) €112,875 favourable Management Accounting Fundamentals Review material 8 1
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d. Mainstream Company produces DVD systems. The company sells each unit for €200. The €200 selling price is also the budgeted selling price. Budgeted Actual Units sold 9,000 10,000 Variable costs €1,000,000 €1,200,000 Fixed costs 500,000 550,000 What is the total static budget variance for Mainstream Company? 1) €50,000 favourable 2) €50,000 unfavourable 3) €45,000 favourable 4) €45,000 unfavourable e. You are provided with the following selected information for DEF Manufacturing: Free-capacity machine-hours 20,000 Budgeted machine-hours 15,000 Actual machine-hours 15,000 Standard machine-hours allowed for actual production 18,000 Which of the following variances does DEF Manufacturing have? 1) An unfavourable volume variance 2) A favourable volume variance 3) No volume variance 4) A favourable variable overhead spending variance f. The total traceable fixed and variable costs of the account billing activity centre are €245,000. Cost behaviour analysis indicates that fixed costs are €75,000. Activity analysis indicates that the cost driver for account billing activity is the number of lines printed. The total lines printed is 2,500,000. What would be the total flexible budget if the total lines printed increased to 2,600,000? 1) €176,800 2) €240,000 3) €245,000 4) €251,800 g. XYZ Manufacturing produces and sells Bygones. In the production of Bygones, the standard direct labour is 5 hours at €20.00 per hour. During February, 5,000 units were produced using 26,000 hours at €21.00 per hour. What was the direct labour efficiency variance? 1) €46,000 unfavourable
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I-Rev8 - LESSON 8 Review material Review questions Question...

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