Exam 3

Fancy Nails cost for supplies is .75 per manicure. Jane's budget based on 2400 manicures and a total cost for supplies of $1800. Jane's actual activity was 2,500 manicures. Total cost of supplies in June was 2,000. Calculate the spending variance for June. (U or F)

$ 125 U

LHU Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 3.4 hours of direct labor at the rate of $30.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June.The budgeted direct labor cost per unit of Product WZ would be:

$102.00 Budgeted direct labor cost = 3.4 direct labor-hours per unit × $30.00 per direct labor-hour = $102.00 per unit

If the planned budget revenue for 5,000 units is $120,000, what is the flexible budget revenue if the actual activity is 4,500 units:

$108,000

Budgeted sales in Acer Corporation over the next four months are given below: September October November December Budgeted sales...... $140,000 $150,000 $170,000 $130,000 Twenty-five percent of the company's sales are for cash and 75% are on account. Collections for sales on account follow a stable pattern as follows: 50% of a month's credit sales are collected in the month of sale, 30% are collected in the month following sale, and 15% are collected in the second month following sale. The remainder are uncollectible. Given these data, cash collections for December should be:

$136,375

Avril Company makes collections on sales according to the following schedule: 40% in the month of sale 56% in the month following sale 4% in the second month following sale The following sales are expected: Expected Sales January $150,000 February $160,000 March $150,000 Cash collections in March should be budgeted to be:

$155,600 Cash collections for March: March credit sales collected in March ($150,000 × 40%) $ 60,000 February credit sales collected in March ($160,000 × 56%) 89,600 January credit sales collected in March ($150,000 × 4%) 6,000 Total cash collections in March $155,600

The manufacturing overhead budget at Mahapatra Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 8,600 direct labor-hours will be required in May. The variable overhead rate is $9.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $103,200 per month, which includes depreciation of $18,220. All other fixed manufacturing overhead costs represent current cash flows. The May cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

$165,820 Manufacturing Overhead Budget May -Budgeted direct labor-hours 8,600 -Variable manufacturing overhead rate$9.40 -Variable manufacturing overhead $80,840 -Fixed manufacturing overhead 103,200 -Total manufacturing overhead (a) $184,040 Less depreciation 18,220 Cash disbursement for manufacturing overhead$165,820

Trumbull Corporation budgeted sales on account of $120,000 for July, $211,000 for August, and $198,000 for September. Experience indicates that none of the sales on account will be collected in the month of the sale, 60% will be collected the month after the sale, 36% in the second month, and 4% will be uncollectible. The cash receipts from accounts receivable that should be budgeted for September would be:

$169,800

Mosbey Inc. is working on its cash budget for June. The budgeted beginning cash balance is $17,000. Budgeted cash receipts total $176,000 and budgeted cash disbursements total $175,000. The desired ending cash balance is $47,000. The excess (deficiency) of cash available over disbursements for June will be:

$18,000 Cash Budget Cash balance, beginning $ 17,000 Add cash receipts 176,000 Total cash available 193,000 Less cash disbursements 175,000 Excess (deficiency) of cash available over disbursements 18,000 Financing ($47,000 − $18,000) 29,000 Cash balance, ending $ 47,000

*The Gerald Corporation makes and sells a single product called a Clop. Each Clop requires 1.1 direct labor-hours at $8.20 per direct labor-hour. The direct labor workforce is fully adjusted each month to the required workload. The company is preparing a Direct Labor Budget for the first quarter of the year. If the company has budgeted to produce 20,000 Clops in January, then the budgeted direct labor cost for January is:

$180,400

Cadavieco Detailing's cost formula for its materials and supplies is $1,980 per month plus $10 per vehicle. For the month of November, the company planned for activity of 93 vehicles, but the actual level of activity was 53 vehicles. The actual materials and supplies for the month was $2,820. The materials and supplies in the flexible budget for November would be closest to:

$2,510 Cost = Fixed cost per unit + Variable cost per unit × q = $1,980 + $10 × 53 = $2,510

The manufacturing overhead budget at Mahapatra Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 9,700 direct labor-hours will be required in May. The variable overhead rate is $8.30 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $137,740 per month, which includes depreciation of $18,140. All other fixed manufacturing overhead costs represent current cash flows.The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for May should be

$22.50 May -Budgeted direct labor-hours 9,700 -Variable manufacturing overhead rate $8.30 -Variable manufacturing overhead $80,510 -Fixed manufacturing overhead 137,740 Total manufacturing overhead (a) $218,250 Budgeted direct labor-hours (b) 9,700 Predetermined overhead rate for the month (a) ÷ (b)$22.50

Based on following info, calculate the variable overhead rate variance. Actual Vari. OH Cost $15,500 Actual Hrs Used 4200 Standard hrs allowed 4000 Stand. Vari. OH rate $3.75 per hr (Favor or Unfavor)

$250 Favorable

*The manufacturing overhead budget at Pendley Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 7,400 direct labor-hours will be required in August. The variable overhead rate is $7.60 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $149,480 per month, which includes depreciation of $24,900. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for August should be:

$27.80

On November 1, Barnes Corporation has 8,000 units of Product A on hand. During the month, the company plans to sell 30,000 units of Product A, and plans to have 6,500 units on hand at end of the month. How many units of Product A must be produced during the month?

$28,500

Sioux Corporation is estimating the following sales for the first four months of next year: January.................. $260,000 February................ $230,000 March.................... $270,000 April...................... $320,000 Sales are normally collected 60% in the month of sale, 35% in the month following the sale, and the remaining 5% being uncollectible. Based on this information, how much cash should Sioux expect to collect during the month of April?

$286,500

*Rogers Corporation is preparing its cash budget for July. The budgeted beginning cash balance is $25,000. Budgeted cash receipts total $141,000 and budgeted cash disbursements total $139,000. The desired ending cash balance is $30,000. To attain its desired ending cash balance for July, the company should borrow:

$3,000

*Muecke Inc. is working on its cash budget for April. The budgeted beginning cash balance is $40,000. Budgeted cash receipts total $150,000 and budgeted cash disbursements total $158,000. The desired ending cash balance is $50,000. The excess (deficiency) of cash available over disbursements for April will be:

$32,000

JT Department Store expects to generate the following sales for the next three months: July August September Expected sales....... $460,000 $580,000 $620,000 JT's cost of goods sold is 60% of sales dollars. At the end of each month, JT wants a merchandise inventory balance equal to 20% of the following month's expected cost of goods sold. What dollar amount of merchandise inventory should JT plan to purchase in August?

$352,800

*Skeete Inc. bases its selling and administrative expense budget on the number of units sold. The variable selling and administrative expense is $4.60 per unit. The budgeted fixed selling and administrative expense is $30,270 per month, which includes depreciation of $3,540. The remainder of the fixed selling and administrative expense represents current cash flows. The sales budget shows 2,200 units are planned to be sold in November. Cash disbursement for selling and admin expenses

$36,850

Seventy percent of Parlee Corporation's sales are collected in the month of sale, 25% in the month following sale, and 5% in the second month following sale. The following are budgeted sales data for the company: January February March April Total sales.............. $600,000 $700,000 $500,000 $300,000 Total budgeted cash collections in April would be:

$370,000

The manufacturing overhead budget at Cutchin Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 2,500 direct labor-hours will be required in September. The variable overhead rate is $4 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,090 per month, which includes depreciation of $3,670. All other fixed manufacturing overhead costs represent current cash flows. The September cash disbursements for manufacturing overhead on the manufacturing overhead budget should be

$49,420 Manufacturing Overhead Budget September -Budgeted direct labor-hours 2,500 -Variable manufacturing overhead rate $4 -Variable manufacturing overhead $10,000 -Fixed manufacturing overhead 43,090 -Total manufacturing overhead 53,090 -Less depreciation 3,670 -Cash disbursement for manufacturing overhead $49,420

Given the following information, calculate the variable overhead efficiency variance. Actual Hrs 1,500 Standard hrs allowed 1,350 Actual Vari. OH Rate $3.00 per hr Standard Vari OH Rate $3.50 per hr (Favor or Unfavor)

$525 Unfavorable

*All of Porter Corporation's sales are on account. Sixty percent of the credit sales are collected in the month of sale, 25% in the month following sale, and 10% in the second month following sale. The remainder are uncollectible. The following are budgeted sales data for the company: Total Sales: January...400,000 Feb.......600,000 March...500,000 April ......700,000 Cash Receipts in April are expected to be:

$605,000

All of Porter Corporation's sales are on account. Sixty percent of the credit sales are collected in the month of sale, 25% in the month following sale, and 10% in the second month following sale. The remainder are uncollectible. The following are budgeted sales data for the company. January February March April Total sales.............. $400,000 $600,000 $500,000 $700,000 Cash receipts in April are expected to be:

$605,000

The WRT Corporation makes collections on sales according to the following schedule: 25% in month of sale 65% in month following sale 5% in second month following sale 5% uncollectible The following sales have been budgeted: Sales April...................... $120,000 May....................... $100,000 June...................... $110,000 Budgeted cash collections in June would be:

$98,500

The materials price variance is calculated using the

-actual quantity of the input purchased -standard price of the input -actual price of the input

What are used to calculate the standard quantity per unit of direct materials?

1) Direct Materials requirements per unit of finished product 2) Allowance for waste and spoilage

Warren Inc. standard cost card indicates that each widget should require 2 lbs. of material. In July Warren budgeted 2,000 widgets and actually produced 1,500 widgets. Each widget produced used 2.2 of material. The standard quantity of materials allowed for July is:

3,000 Pounds Standard Quantity allowed = actual output* standard quantity

*Cowles Corporation Inc., makes and sells a single product, Product R. Three yards of Material K are needed to make one unit of Product R. Budgeted production of Product R for the next five months is as follows: August.....13,000 units September....13,500 units October....14,500 units November...13,600 units December 12,900 units The company wants to maintain monthly ending inventories of Material K equal to 30% of the following month's production needs. On July 31, this requirement was not met because only 3,500 yards of Material K were on hand. The cost of Material K is $0.80 per yard. The company wants to prepare a Direct Materials Purchase Budget for the rest of the year. The total cost of Material K to be purchased in August is:

38,120

Use the following information to calculate the labor RATE variance for Adkinson Company. Actual hrs used 5,500 Standard Hrs allowed 5,800 Actual Labor rate $14.75 per hr Standard Rate $14 per hr (Favor or Unfavor)

4,125 Unfavorable

Use the following information to calculate the labor EFFECIENCY variance for Adkinson Company. Actual hrs used 5,500 Standard Hrs allowed 5,800 Actual Labor rate $14.75 per hr Standard Rate $14 per hr (Favor or Unfavor)

4,200 Favorable

*Shocker Corporation's sales budget shows quarterly sales for the next year as follows:Unit sales Quarter 1: 10,000 units Quarter 2: 8,000 Units Quarter 3: 12,000 units Quarter 4: 14,000 units Corporation policy is to have a finished goods inventory at the end of each quarter equal to 20% of the next quarter's sales. Budgeted production for the second quarter of the next year would be:

8,800 units

Shocker Corporation's sales budget shows quarterly sales for the next year as follows: Unit sales Quarter 1............... 10,000 units Quarter 2............... 8,000 units Quarter 3............... 12,000 units Quarter 4.............. 14,000 units Corporation policy is to have a finished goods inventory at the end of each quarter equal to 20% of the next quarter's sales. Budgeted production for the second quarter of the next year would be:

8,800 units

A quantity variance is a) calculated using the actual price of the input b) based only on the actual quantity of inputs c) calculated using the standard price of the input d) based only on the standard quantity of inputs

C

Fancy Nails monthly rent is $2500. The company's static budget for March was based on the activity level for 2,000 manicures. Total Sales was budgeted at $40,000 and nail technician wages ( a variable cost based on the number of maincures) was budgeted at $20,000. Actual manicures in March totaled 2,200. Assuming no other expenses, Make Fancy nails flexible budget.

Check figures 1) Net operating income of $19,500 2) Sales of $44,000

A revenue variance is the:

Difference between what revenue should have been at the actual level of activity and the actual revenue

Which of the following might be included as a disbursement on a cash budget? Depreciation on factory equipment Income taxes to be paid A) Yes Yes B) Yes No C) No Yes D) No No

Option C

The difference between the actual price paid for the material and what should have been paid according to the standard is reflected in the direct materials ____________ variance.

Price

The difference between how much a cost should have been, given the actual level of activity, and the actual amount of the cost is a _______ variance.

Spending

If the actual cost is greater than the flexible budget cost, the spending variance will be

Unfavorable

The materials price variance is calculated using the______ quantity of the input purchased

actual

When preparing a production budget, the required production equals:

budgeted sales - beginning inventory + desired ending inventory.

The difference between the standard and the actual direct labor hourly rate is reflected in the _________ ___________ variance

labor rate

How much should be paid for each unit of an input is specified by a ________ standard.

price

The materials price variance is computed when materials are __________ and the materials quantity variance is computed when the materials are ________

purchased used

How much input should be used to produce a product or provide a service is a _____ standard.

quantity

The direct labor budget is based on:

the required production for the period.