Acct 252 -1 Test #3 Version Student: J. The following labor standards have been established for a particular products Standard Ihor-hours per uait of output. LS hours Standard labor rate cee $LTS5 per hour The following dala pertain to operations concerning the product for the last month: Actual hours worked 5.300 hours -Actual total labor cost 994.340 Actual output... 3,600 units ‘What is the labor rate variance for the month? A$30U B. $430 F ©. $1,325 U D. $1,780 F 2. Karmazyn Hospital bases its budgets on patient-visits. The hospital's static budget for October appears below: Budgeted number of patientevisits 8,900 Budgeted variable costs Supplies ((@$9.00 per patient-visit) .. Laundry ((@)$8.70 per paticat-visit) . ‘Tatal variable coat. Budgeted fixed easts: Wages and salaries. 99,680 Oconpancy costs... 107.650 Total fixed cos 207.370 Total cost... cones $364,900 The total cost at the activity level of 9,200 patient-visits per month should be: A. $370,210 13, $377,200 C. $370,770 1, $364,900 3. A static budget: ‘A. represents the best way to set spending targets for managers. B, should be compared to 2 flexible budget to assess how well costs were controlled C. is valid for only one level of activity. D. should be compared to actual costs to assess how well costs were controlled.4. A labor efficiency variance resulting from the use of poor quality materials should be charged to: A. the industrial enginecring department 1B. manufacturing overhead. ©, the production manager. D. the purchasing agent. 5. Fudala Snow Removal's cost formula for its vehicle operating cost is $1,480 per month plus $308 per snew-day. For the month of March, the company planned for activity of 11 snow-days, but the aetual level of activity was 16 snow-days. The actual vehicle operating cost for the month was $6,130. The spending variunee for vehicle opcrating cost in March would be closest to: AQBU B. S278 F C. $1,262 F D. $1,262 U 6. The budgeted amount of raw materials to be purchased is determined by: A, adding the desired ending inventory of raw materials ta the raw materials needed to meet {he production schedule. B. subtracting the beginning inventory of raw materials from the raw materials necded to meet the production schedule. C. adding the desired ending inventory of raw materials to the raw materials needed to mect the production schedule and subtracting the beginning inventory of raw materials, 1D. adding the beginning inventory of raw materials to the raw matcrials needed to moet the production schedule sand subtracting the desired ending inventory of raw materials, 7. Gradert Framing's cost formula for its supplics cost is $1,540 per month plus $12 per frame, For the month of September, the company planned for activity of 668 frames, but the actual level of activity was 666 frames. The actual supplies cost for the month was $9,980. The supplies cost in the planning budget for September would be closest to; A. $9,980 B. $9,532 C. $9,356 D. $10,010 8. Budgeted production needs arc determined by: A. adding budgeted saley in units to the desired ending inventory in unit B. adding budgeted salcs in units to the desired ending inventory in units and deducting the beginning inventory in units from this (otal. C. deducting the beginning inventory in units from budgeted sales in units. D. adding budgeted sales in units to the beginning inventory in units and dedueting the desired ending inventory in units from this total_9. The selling and administrative expense budget of Breckinridge Corporation is based on budgeted unit sales, Which are 5.500 units for June. The variable selling and administrative expense is $1.00 per unit. The budgeted fixed selling and administrative expense is $101,200 per month, which includes depreciation of $6,050 per month. The remainder of the fixed selling and administrative expense represents current cash lows. The cash disbursements for selling and administrative expenses on the June selling and administrative expense budget should be: A. $5,500 B.S95,150 C. $100,650 1. $106,700 10, The manufacturing overhead budget at Mahapatra Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 7.900 diréct labor-hours Will be required in May. The variable overhcad rate is $9.50 per direct labor-hour. The company’s budgeted fixed manufacturing overhead is $112,970 per month, which includes depreciation of $18,170. All other fixed manufacturing overhead costs represent current eash flows. The May cash disbursements for manufacturing overhead on the manufacturing overhead budget should be: A. $75,050 B. $169,850 C.$188,020 D. $94,800 11. The following data have been provided by Spraglin Corporation, a company that produces forklift trucks: Budgeted production i Standard machine-hours per trucl Standard supplies cost... : 6,000 trucks i 3.7 machine-hours $2.20 per machine-hour Actual productios eevee 6.200 trucks Actual machine-hours 23.160 machine-hours Actual supplies cost (totAaD)...e $53,111 Supplies cost is en clement of variable manufacturing overhead. The variable overhead elficieney variance for supplies cost is: AS26430 B.3484U C.$2,643 F 1D, $484 F12. Nusscy Clinic uses client-visits as its measure of activity. During May, the clinic budgeted for 2,100 sits, but its actual level of votivity was 2,050 client The clinic has provided the following data ‘concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting: Fixed Variable element element per per month — client-visit PREV RNE atte - $40.00 Personnel expenses $23,200 $11.30 ‘Medical supplies ... 300 1.90 Occupancy expenses . 5.700 Lo Administrative si 3300 ‘Total expenses... 333.000 ‘$20.60 Actual results for May: Revenue. Per Medical supplies... Occupancy expenses... Administrative expenses ... eat $82,960 $17.195 S775 $3.985 ‘The overall revenuc and spending variance (i., the variance for net operating income in the revenue and spending variance column) for May would be closest to: A.$230U B. 51,2000 C.$1,200F ‘D.3230F 13. Whit Catering uses two measures of activity, jobs and meals, in the cost formulas in ils flexible budgets. The cost formula for cutering supplies is $380 per month plus $94 per job plus $11 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home, The company expected its activity in October to be 20 jobs and 216 meals, but the actual activity was 19 jobs and 221 meals. The actual cost for catering supplies in October was $4,790. The eatcring supplies in the flexible budget for October would be closest to: AS46036 B. $4,597 $4,790, D. $4,404 :14. The following matcrials standards have been established for a particular product: Standard quantity per unit of output 46 feet Standard price tienen SUD.DS per feet The following data pertain to operations concerning the product for the last month: Actual maferials purchased... 3.200 feet Actual eost of materials purshased .. $63.200 Actual materials used in production. 2,900 feet Actual OnFpUt ene 800 units What is the materials price variance for the month? A. $5925 U B.$1,6001) C. $15,405 F D. $5,775 U 15, LHU Corporation makes and sells « product called Product WZ. Each unit of Product WY requires 2.5 hours of direct labor at the rate of $15.00 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 he: AS17530 B. $37.50 C. 815.00 1.86.00 16. Sartain Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are: planned for the year. Beginning Inventory Ending Inventory Finished goods (units)... 20,000 70.000 ‘Raw material (grams)... 50,000 40,000 Each unit of finished goods requires 2 grams of raw material. ‘How much of the raw material should the eompany purchase during the year? A. 1,480,000 grams B. 1,450,000 grams C. 1,430,000 grams D. 1,440,000 grams 17. The general model for calculating a price variance is: A. actual quantity of inputs x (actual price -siandard price). B, standard price x (actual quantity of inputs - standard quantity allowed for output). C. (actual quantity of inputs at actual price) - (standard quantity allowed for output at standard price). 1D. actual price x (actual quantity of inputs - standard quantity allowed for output).18. Dosier Corporation has a standard cost system in which it applies manufacturing overhead ta products on the basis of standard machine-hours (MHs), The company has provided the following data for the most recent month: Budgeted level of activity 00 Mis Actual level of activity... feiss, is 3.000 MHs Standard variable manufacturing overheadrate........ $6.10 per MEL Budgeted fixed manufacturing overhicad cost $65.00 Actual total variable manufacturing overhead $28.500 Actual total fixed manufacturing overhead $63,000 What was the fixed manufacturing overhead budget variance for the month? A. $2,000 favorable B. $2,000 unfavorable C. $610 unfavorable D. $610 favorable 19, The following data have been taken from the budget reporis of Brandon company, a merchandising company. Purchases Sales January. $160,000 $100,000 February... $160,000 $200,000 Marsh... $160,000 $240,000 Apa. $140,000 $300,000 May. $140,000 $260,000 Sane. $120,000 $240,000 Forty percent of purchases are paid for in cash al the time of purchase, and 30% are paid for in each of the next two months. Purchases for the previous November and December were $150,000 per month. Employee wages are 10% of sales for the month in which the sales occur, Selling and administrative expenses are 20% of the following month's sales. (July sales are budgeted to be $220,000.) Interest payments of $20,000 are paid quarterly in January and April, Brandon's cash disbursements [or the month of April would be: A. $254,000 B. $140,000 C. $200,000 1D. $248,000 20. Which department should usually be held responsible for an unfavorable materials price variance’? A. Production. B. Maicrials Handling. C, Engineering. D. Purchasing.y 21, Tbe Cexiquist Company makes and sells a product called Product K. Each unit of Product K sells for $24 dollarsand has 2 unit variable cost of $18. The company has budgeted the following data for November: © Sales of $1,152,200, all in cash, » A cash balance on November | of $43,000. # Cash disbursements (other than interest) during November of $1,160,000 + A minimum cash balance on November 30 of $60,000. Ifnecessary, the company will borrow cash from a bank. The borrowing will be in multiples of $1,000 and will bear interest at 2% per month. All borrowing will take place at the beginning of the month. The November interest will be paid in cash during November. The amount of cash needed to be borrowed on November 1 10 cover all cash disbursements and to obtain the desired November 30 cash balance is: A. $21,000 B. $37,000 . $20,000 D. $38,000: 22, The following materials standards have been established for a particular product: Standard quantity per unit of output 73 Pounds Standard price $1443 per pound ‘The following data pertain to operations concerning the product for the fast month: Actual materials purchased 6.0.0. 6.600 Pounds Actual cost of materials purchased 391,740 Actual materials used in production... 5.900 Pounds ‘Actual outpat.. ae ae 1,000 Unite What is the rnaterials quantity variance for the month? A, $20,230 F B. $19,460 F C. $10,115 1, $9,730 U 23. L-afountaine Manufacturing Corporation has a standard cost system in which it applies manufacturing overhead to producis on the basis of standard machine-hours (MHs). The company’s cost fonmula for variable manufacturing overhead is $4.70 per MIl. During the month, the actual total variable manufacturing overhead was $20.210 and the actual level of activity for the period was 4,700 MHs. What was the variable overhead sale variance for the month? A. $1,880 favorable B. $400 favorable C. $400 unfavorable 1D. $1,880 unfavorable24. Jay Company uses a standard cast system in whieh it applies manufacturing overhend to units of product on the basis of standard direct labor-hours (1D1.Hs), The information below pertains to a recent month's activity: Denominator activity...... Actual activity... Standard hours allowed for output... Predetermined overhead rate ($2 variable + $3 fixed). The volume variance would be: A. $180 F B.S1S0F $300 D. $300 F DLHs DLHs DLHs per DLH 25, The following labor standards have been established for a particular product: Standard labor-hours per unit ofoupat..... 4.0 hours Standard labor rate. $1230 per hour The following data pertain to operations conceming the product for the last month: Actual hours worked 7.100 hours Actual total labor cost 589.105, Actual outpat.. 1,500 units What is the labor efficiency variance for the month? A. $13,805 U B. $15,305 F C.$13,530U D. $15,305 U 26. Scarfo Hotel bases its budgets on guest-days. ‘The hotel's static budget for December appears below: 2100 Budgeted number of guest-days... Budgeted variable overhead costs: Supplies (@S1.80 per guest-day).... Laundry (@92.00 per guest-ay)... Total variable averhzad east . Budgeted fixed overhead costs: Wages and salaries.. Goeupaney COs. eens Total fixed overhead cost. Total budgeted overhead cost... The total overhead cost at an activity level of 2,900 guest-days per month should be: A.$17,640 B. $20,890 C. $24,360 1D. $20,6807 27 Bisligeted sales in Allen Company over the next four months are given below: é Soptember October November December Bergcicdsales...... $100,000 $160,000 $180,000 $120,000 Twenty-five percent of the company's sales are for eash and 75% are on aevount. 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 uncollcctible. Given these data, cash collections for December should be: A. $138,000 B.$133,500 C.$103,500 1D. $120,000 28. Which of the following statements is not correct? ‘A. The sales budget is the starting poin! in preparing the master budget, B. The sales budger generally is aecampanied by » computation of expected cash receipts for the fortheoming budget period. C. The sales budget is constructed by multiplying the expected sales in units by the sales price. 1D. The cash budget must be prepared prior to the sales budget because managers Want to know the expected cash collections on sales made to customers in prior periods before projecting sales for the eurrent period.