46166_1_Ass-2 - Section A MultipleChoice Questions (20...

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Section A Multiple-Choice Questions (20 marks) Section A consists of 20 multiple-choice questions, each worth 1 mark. Indicate the best  response for each of the following questions.  1. Honda Heaven produces and sells an auto part for $20.00 per unit. Direct materials  are $8.00 per unit, while direct manufacturing labour averages $1.50 per unit.  Variable overhead is $0.50 per unit and fixed overhead is $250,000.00 per year.  Administrative expenses, all fixed, run $90,000.00 per year, with sales commissions  of $2.00 per part. Production is 100,000 parts per year. This year, 75,000 parts were  sold. What is the inventory cost per part using variable costing? a. $10.00 b. $12.00 c. $14.50 d. $16.50 e. $9.50 Use the information below to answer Questions 2 and 3: Jones Cleaners manufactures dish soap. The following information has been provided  about the inventories, production, and sales volumes for dish soap for January and  February. Jones Cleaners uses standard costing for manufacturing, marketing, and  administrative costs. January February Beginning inventory 0 ? Production 2,000 3,000 Sales 1,750 3,250 Other information: Selling price $ 5.00 Standard variable manufacturing cost/unit $ 1.00 Standard variable market/admin. cost/unit $ 0.50 Standard fixed manufacturing overhead  cost/month $4,000 Standard fixed market/admin. cost/month $2,000
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process. 2. What is the value of February’s beginning inventory under absorption costing? a. $750 b. $700 c. $250 d. $500 e. none of the above 3. What would Jones Cleaners’ operating income (loss) be for January and February,  respectively, using the variable costing approach? a. $(125) and $5,125 b. $125 and $5,375 c. $(125) and $(5,375) d. $125 and $5,125 e. none of the above 4. Cady Machine Shop used 15,000 machine-hours during January. It takes 0.90  machine-hours to produce one unit; 15,000 units were produced during the month.  Budgeted production included 12,000 units, using 10,800 machine-hours. Budgeted  variable manufacturing overhead costs per output unit is $22.50. What is the  variable overhead efficiency variance for Cady? a. $16,875 favourable b. $16,875 unfavourable c. $37,000 favourable d. $37,500 unfavourable e. $37,500 favourable 5. Which of the following is  incorrect  concerning variable versus absorption costing? a. The difference in operating income between the two approaches is captured  by the difference between fixed manufacturing costs in ending inventory and  fixed manufacturing costs in opening inventory. b.
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46166_1_Ass-2 - Section A MultipleChoice Questions (20...

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