If actual costs are greater than standard costs, there is a(n)
a) normal variance.
b) unfavorable variance.
c) favorable variance.
d) error in the accounting system.
10. A company developed the following per-unit standards for its product: 2 pou
The standard rate of pay is $10 per direct labor hour. If the actual direct labor payroll was
$58,800 for 6,000 direct labor hours worked, the direct labor price (rate) variance is
a) $1,200 unfavorable.
b) $1,200 favorable. (AQ*AP)-(SQ*SP) (6000*9.8)-(60
Why are budgets useful in the planning process?
a. They provide management with information about the company's past performance.
b. They help communicate goals and provide a basis for evaluation.
c. They guarantee the company will be profitable if it mee
Which one of the following would be the same total amount on a flexible budget and a static
budget if the activity level is different for the two types of budgets?
a) Direct materials cost
b) Direct labor cost
c) Variable manufacturing overhead
d) Fixed m
Walk Manufacturing gathered the following data about the three products that it produces:
if Processed Further
The production budget shows expected unit sales are 100,000. The required production units
are 104,000. What are the beginning and desired ending finished goods units, respectively?
10,000 (Make 104,00
The production budget shows expected unit sales of 32,000. Beginning finished goods units
are 5,600. Required production units are 33,600. What are the desired ending finished goods
d) 7,200 (5,600+33,600-32,000=x, x=7,20
Pell Manufacturing is preparing its direct labor budget for May. Projections for the month are
that 33,400 units are to be produced and that direct labor time is three hours per unit. If the
labor cost per hour is $12, what is the total budgeted direct la
The per-unit standards for direct materials are 2 gallons at $4 per gallon. Last month, 5,600
gallons of direct materials that actually cost $21,200 were used to produce 3,000 units of
product. The direct materials quantity variance for last month was
The per-unit standards for direct labor are 2 direct labor hours at $12 per hour. If in producing
1,200 units, the actual direct labor cost was $25,600 for 2,000 direct labor hours worked, the
total direct labor variance is
a) $960 unfavorable.
On January 1, Kale Company has a beginning cash balance of $42,000. During the year, the
company expects cash disbursements of $340,000 and cash receipts of $290,000. If Kale
requires an ending cash balance of $40,000, the company must borrow
The following information was taken from Southgate Industrys cash budget for the month of
Beginning cash balance
If the company has a policy of maintaining a minimum end of the month cash bal
The difference between a budget and a standard is that
a) a budget expresses what costs were, while a standard expresses what costs should be.
b) a budget expresses management's plans, while a standard reflects what actually
c) a budget expresse
Scorpion Production Company planned to use 1 yard of plastic per unit budgeted at $81 a
yard. However, the plastic actually cost $80 per yard. The company actually made 1,300
units, although it had planned to make only 1,100 units. Total yards used for pr
Stone Industries uses flexible budgets. At normal capacity of 8,000 units, budgeted
manufacturing overhead is: $64,000 variable and $180,000 fixed. If Stone had actual
overhead costs of $250,000 for 9,000 units produced, what is the difference between act
Monster Company produces a product requiring 3 direct labor hours at $20.00 per hour.
During January, 2,000 products are produced using 6,300 direct labor hours. Monsters actual
payroll during January was $122,850. What is the labor quantity variance?
Ikoto Steel Co. budgeted manufacturing costs for 50,000 tons of steel are:
Fixed manufacturing costs
$50,000 per month
Vaiable manufacturing costs
$12.00 per ton of steel
Nikoto produced 40,000 tons of steel during March. How much is the flexible budget f
Tex's Manufacturing Company can make 100 units of a necessary component part with the
If Tex's Manufacturing Company can purchase the component e
Mink Manufacturing is unsure of whether to sell its product assembled or unassembled. The
unit cost of the unassembled product is $60 and Mink would sell it for $130. The cost to
assemble the product is estimated at $42 per unit and the company believes t
Maynard, Inc. has old inventory on hand that cost $24,000. Its scrap value is $32,000. The
inventory could be sold for $80,000 if manufactured further at an additional cost of $24,000.
What should Maynard do?
a) Sell the inventory for $32,000 scrap value
It costs Ross Co. $24 of variable and $10 of fixed costs to produce one bathroom scale which
normally sells for $70. A foreign wholesaler offers to purchase 2,000 scales at $30 each. Ross
would incur special shipping costs of $2 per scale if the order wer
Edgar, Inc. has a materials price standard of $2.00 per pound. Three thousand pounds of
materials were purchased at $2.20 a pound. The actual quantity of materials used was 3,000
pounds, although the standard quantity allowed for the output was 2,700 poun