Multiple choice Dawson Exam 2
8. The fixed overhead budget variance is measured by:
The difference between fixed overhead cost and actual fixed overhead cost
The direct labor budget is based on
The required production for the period
9. Harris, Inc, had budgeted sales in units for the next five months as follows: June 9,400 units July 7,800 units August 7,300 units September 5,400 units October 4,100 units Past experience has shown that the ending inventory for each month should be equal to 20% of the next month's sales in units. The inventory on May 31 contained 1,880 units. The company needs to prepare a production budget for the next five months.
- 1,080
42. Harris company uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of standard direct labor hours (DLHs). The company has provided the following data. The volume variance would be:
- 1,500 F
33. Cunningham's Deli compares monthly operating results with a static planning budget prepared at the beginning of the year. When actual sales are less than budget, the restaurant would usually report favorable variances on:
- Variable food costs but not fixed supervisory salaries
The materials price variance for March is
1000 F
The company's variable overhead costs are driven by machine-hours. What would be the total budgeted overhead cost for next month if the activity level is 6,600 machine-hours rather than 6,800 machine-hours? Assume that the activity levels of 6,800 machine-hours and 6,600 machine-hours are within the same relevant range
- 108,300
43. During June, Bradely company produced 4,000 units of product. The standard cost card indicated the following labor standard per unit of output: 3.5 hours at $6 per hour=$21. During the month, the company worked 15,000 hours. The standard hours allowed for the month were:
- 14,000 hours
The company wants to maintain monthly ending inventories of material A to equal 10% of the following months production needs. The cost of material A is .90 per yard. The desired ending inventory of material A for the month of June is
- 2.240 yards
44. Cox Company's direct material costs for the month of January were as follows:
- 3,400
28. The materials quantity variance for March is
- 4,500 U
36. Bullins Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company has provided the following data for the most recent month: What was the fixed manufacturing overhead budget variance for the month?
- 4000 Unfavorable
The material price variance for July was
- 5,360
14. Blackwelder Snow removal's cost formula for its vehicle operating cost is $1,240 per month plus $348per snow day. For the month of December, the company planned activity of 12 snow-days, but the actual level of activity was 14 snow days. The actual vehicle operating cost for the month was $6,330. The vehicle operating cost in the planning budget for December would be closest to:
- 5,416
32. Blackwelder Snow removal's cost formula for its vehicle operating cost is $1,240 per month plus $348per snow day. For the month of December, the company planned activity of 12 snow-days, but the actual level of activity was 14 snow days. The actual vehicle operating cost for the month was $6,330. The vehicle operating cost in the planning budget for December would be closest to:
- 5,416
41. The following labor standards have been established for a particular product: What is the labor efficiency variance for the month?
- 5,955 U
18. The labor rate variance for July was
- 6,400
The Inn's variable overhead costs are driven by the number of guests. What would be the total budgeted overhead cost for a month if the activity level is 70 guests?
- 6,620
10. The total number of units produced in July:
- 7,700
17. The materials quantity variance for July was
- 9,600
22. A static budget is also know as a planning budget and is
- A budget for a single level of activity
39. An unfavorable material quantity variance indicates that:
- Actual usage exceeds the standard material allowed for output
37. A major weakness of static budgets is that:
- All of these
When preparing a production budget, the required production equals
- Budgeted sales-beginning inventory +desired ending inventory
26. When the actual price paid on credit for a raw material is less than its standard price, the journal entry would include:
- Debit to raw materials; credit to materials price variance
19. If the price of a company paid for overhead items, such as utilities decreasing durinf the year, the company would proabaly report a
- Favorable spending variance
13. When using a flexible budget, what will occur to fixed costs as the activity level increases within the relevant range
- Fixed costs per unit will decrease
25. When using a flex budget, what will occur to fixed costs as the activity level increases within the relevant range?
- Fixed costs per unit will decrease
21. Comparing actual results to a budget on actual activity for the period is possible with
- Flexible budget
6. Comparing actual results to a budget on actual activity for the period is possible with the use of a 6.
- Flexible budget
12. An activity variance is the difference between
- How much a cost should have been, given the actual level of activity, and the actual amount of the cost
23. A flexible budget is a budget that
- Is updated to reflect the actual level of activity during the period
11. A flex budget is a budget that
- Is updated to reflect the actual level of activity in a period
30. If the actual cost incurred is greater than what the cost should have been as set forth in the Flex budget, variance is:
- Labled as unfavorable
15. Poor quality materials could have an unfavorable effect on which of the following variances?
- Labor efficiency variance: YES Materials quantity. Variance: YES
29. The fixed overhead budget variance is measured by
- The difference between budgeted fixed overhead costs and actual fixed overhead costs
34. A favorable materials price variance coupled with an unfavorable material usage variance would most likely result from:
- The purchases and use of lower than standard quality material
40. An unfavorable fixed manufacturing overhead volume variance would be caused by:
- The...hours exceeding the standard hours allowed for the output of a period
20. Which of the following would produce a labor rate variance?
- Use of persons with high hourly wage rates in tasks that call for low hourly wage rates
2. Sharp Company, a retailer, plans to sell 15,000 units of product X during the month of August. If the comp[nay has 2,500 units on hand at the start of the month, and plans to have 2,000 units on hand at the end of the month, how many units of Product X must be purchased from the supplier during the month?
14,500
4. Hamway Products, Inc, makes and sells a single product called a Wob. It takes two yards of material A to make one Wob. Budgeted production of Wobs for the next four months is as follows
April 12,000 units → 1200 May 13,500 units → 1350 July 11,200 units → 1120 * 2 = 2240
5. A detailed financial plan for the future is known as
Budget
During July, the company made 6,000 units of product and incurred for the following costs:
Direct materials purchased......26,800 gallons at $8,20 per gallon Direct materials used.............25,200 gallons Direct labor used..................5,600 hours at $15.30 per hour
16. The Collins company uses standard costing and has established the following direct material and direct labor standards for each unit of a single product it makes:
Direct materials.......4 gallons at $8 per gallon Direct Labor..........1 hour at $16 per hour
During March, the following activity was recorded
The company produced 3,000 units during the month -A total of 8,000 pounds of material were purchased at a cost of $23,000 There was no beginning inventory of materials on hand to start the month, at the end of month, 2,000 pounds of material remained in the warehouse -During March, 1600 direct labor hours were worked at a rate of $6.50 per hour -Variable manufacturing overhead costs during March totaled $1,800
24. Poor quality materials could have an unfavorable effect on which of the following variances?
Labor efficiency Variance Materials Quant. Variance - Labor efficiency variance: Yes materials quantity variance: Yes
38. An activity variance is the difference between:
in a static planning budget and the same item in the flexible budget and the same item in the flexible budget