Name: Section: Date:

1. Roberts Corp., which began business at the start of the current year, had the following data:
Planned and actual production: 40,000 units
Sales: 37,000 units at $15 per unit
Production costs:
Variable: $4 per unit
Fixed: $260,000
Selling and administrative costs:
Variable: $1 per unit
Fixed: $32,000

 The gross margin that the company would disclose on an absorption-costing income statement is: 
A. $97,500.
B. $147,000.
C. $166,500.
D. $370,000.
E. some other amount.
 

The contribution margin that the company would disclose on a variable-costing income statement is: 
A. $97,500.
B. $147,000.
C. $166,500.
D. $370,000.
E. some other amount.

2. McArthur Corp., which began business at the start of the current year, had the following data:
Planned and actual production: 40,000 units
Sales: 38,000 units at $15 per unit
Production costs:
Variable: $5 per unit
Fixed: $260,000
Selling and administrative costs:
Variable: $1 per unit
Fixed: $32,000
 The gross margin that the company would disclose on an absorption-costing income statement is: 
A. $0.
B. $133,000.
C. $166,500.
D. $342,000.
E. some other amount.

The contribution margin that the company would disclose on a variable-costing income statement is: 
A. $0.
B. $120,000.
C. $166,500.
D. $342,000.
E. some other amount.
 3. Consider the following information:

   

The direct-labor rate variance is: 

A. $17,250U.
B. $20,700U.
C. $20,700F.
D. $21,000F.
E. None of these.

4. Answer: B Direct-labor efficiency variance, favourable = SR(AH – SH)-3,200 = SR(34,500 – 35,000)SR = 3200/
500 = 6.4Direct-labor rate variance = AH(AR – SR), AR = 241,400 / 34,500 = 734,500( 7 – 6.4) = 34,500 * 0.6
= 20,700U <= postiive
5. Chino began business at the start of the current year. The company planned to produce 25,000 units, and
actual production conformed to expectations. Sales totaled 22,000 units at $30 each. Costs incurred were:

   

If there were no variances, the company's absorption-costing income would be: 

A. $190,000.
B. $202,000.
C. $208,000.
D. $220,000.
E. some other amount.

6. Springstein began business at the start of the current year. The company planned to produce 40,000 units,
and actual production conformed to expectations. Sales totaled 37,000 units at $42 each. Costs incurred
were:

   

If there were no variances, the company's variable-costing income would be: 

A. $155,000.
B. $212,000.
C. $240,500.
D. $592,000.
E. some other amount.

7. Franz began business at the start of this year and had the following costs: variable manufacturing cost per
unit, $9; fixed manufacturing costs, $60,000; variable selling and administrative costs per unit, $2; and fixed
selling and administrative costs, $220,000. The company sells its units for $45 each. Additional data follow.

   

There were no variances.

 The income (loss) under absorption costing is: 
A. $(7,500).
B. $9,000.
C. $15,000.
D. $18,000.
E. some other amount.
  

The income (loss) under variable costing is: 

A. $(7,500).
B. $9,000.
C. $15,000.
D. $18,000.
E. some other amount.

8. The following information is for Crichton Company’s July production:

Standards:
Material 3.0 feet per unit @ $4.20 per foot
Labor 2.5 hours per unit @ $7.50 per hour

Actual:
Production 2,750 units produced during the month
Material 8,700 feet used; 9,000 feet purchased @ $4.50 per foot
Labor 7,000 direct labor hours @ $7.90 per hour

(Round all answers to the nearest dollar.)

What is the material price variance (calculated at point of purchase)?

a $2,700 U
.
b $2,700 F
.
c $2,610 F
.
d $2,610 U
.

What is the material quantity variance?

a $3,105 F
.
b $1,050 F
.
c $3,105 U
.
d $1,890 U
.

What is the labor rate variance?

a $3,480 U
.
b $3,480 F
.
c $2,800 U
.
d $2,800 F
.

What is the labor efficiency variance?

a $1,875 U
.
b $938 U
.
c $1,875 F
.
d $1,125 U
 .

9. Fleetwood Company uses a standard cost system for its production process and applies overhead based on
direct labor hours. The following information is available for May when Fleetwood produced 4,500 units:

Standard:
DLH per unit 2.50
Variable overhead per DLH $1.75
Fixed overhead per DLH $3.10
Budgeted variable overhead $21,875
Budgeted fixed overhead $38,750

Actual:
Direct labor hours 10,000
Variable overhead $26,250
Fixed overhead $38,000

Using the one-variance approach, what is the total overhead variance?

a $6,062.50 U
.
b $3,625.00 U
.
c $9,687.50 U
.
d $6,562.50 U
.

Using the four-variance approach, what is the variable overhead spending variance?
a $4,375.00 U
.
b $4,375.00 F
.
c $8,750.00 U
.
d $6,562.50 U
.

Using the four-variance approach, what is the variable overhead efficiency variance?
a $2,187.50 U
.
b $9,937.50 F
.
c $2,187.50 F
.
d $2,937.50 F
.

Using the four-variance approach, what is the fixed overhead spending variance?
a $7,000.00 U
.
b $3,125.00 F
.
c $ 750.00 U
.
d $ 750.00 F
.

Using the four-variance approach, what is the volume variance?

a $3,125.00 F
.
b $3,875.00 F
 .
c $6,063.00 U
.
d $3,875.00 U
.

10. National Toy Company has developed standard overhead costs based on a capacity of 180,000 machine
hours as follows:

Standard costs per unit:

Variable portion 2 hours @ $3 = $ 6
Fixed portion 2 hours @ $5 = 10
$16

During November, 85,000 units were scheduled for production, but only 80,000 units were actually produced. The
following data relate to November:

Actual machine hours used were 165,000.

Actual overhead incurred totaled $1,378,000 ($518,000 variable plus $860,000 fixed).
All inventories are carried at standard cost.

The variable overhead spending variance for November was

a $15,000 U.
.
b $23,000 U.
.
c $38,000 F.
.
d $38,000 U.
.

The variable overhead efficiency variance for November was

a $15,000 U.
.
b $23,000 U.
.
c $38,000 F.
.
d $38,000 U.
.