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1. The purpose of a flexible budget is to A. Allow management

Customer Question

1.     The purpose of a flexible budget is to

A.     Allow management some latitude in meeting goals.
B.     Eliminate cyclical fluctuations in production reports by ignoring variable costs.
C.     Compare actual and budgeted results at virtually every level of production.
D.     Reduce the total time in preparing the annual budget.
2.   Woodside Company manufactures tables with vinyl tops. The standard material cost for the vinyl used per Style R table is \$7.20 based on 8 square feet of vinyl at a cost of \$.90 per square foot. A production run 1,000 tables in January resulted in usage of 8,300 square feet of vinyl at a cost of \$.85 per square foot, a total cost of \$7,055. The quantity variance resulting from this production run was
A. \$255 Favorable.                          &nbs p;                                 C. \$270 favorable
B. \$255 unfavorable.                       &nbs p;                                D. \$270 unfavorable

3. RHO Company, which began its operations on January 1, produces a single product that sells for \$10.25 per unit. Standard capacity is 80,000 units per year. This year, 80,000 units were produced and 70,000 units were sold.
Manufacturing costs and selling and administrative expenses follow:
&nbs p;                                Fixes costs              Variable costs
Raw materials                        &nbs p;                                    \$2.00 per unit produced
Direct Labor                        &nbs p;                                       \$1.50 per unit produced
Factory overhead                             \$120,000           1.00 per unit produced
Selling and administrative              80,000               0.50 per unit sold
What is the standard cost of manufacturing a unit of product?
A. 4.50.                        &nbs p;                                                        C. \$5.50
B. \$5.00                        &nbs p;                                                       D. \$6.00

4. Which one of the following items is ignored when establishing and ideal standard?
A. Cost of materials                        &nbs p;                                   C. Vacation time
B. Cost of electricity                        &nbs p;                                  D. Sick time

5. Belo, Inc. uses a standard cost system. Overhead cost information for Product CO for the month of October follows:

Total Standard overhead rate per direct labor hour    \$4.25
Variable overhead rate per direct labor hour               \$3.75
Standard hours allowed for actual production              3,400

What is the overall (net) overhead variance?
A. \$100 Favorable.                          &nbs p;                                 C. \$300 favorable
B. \$100 unfavorable.                       &nbs p;                                D. \$300 unfavorable

6. What type of direct material variances for price and quantity will arise if the actual number of pounds of materials used exceeds standard pounds allowed but actual cost is less than standard cost?
Quantity        Price
A. Favorable          Favorable
B. Unfavorable     Unfavorable
C. Favorable        Unfavorable
D. Unfavorable       Favorable

7. Beres Corporation has developed the following flexible budget formula for annual indirect labor cost:
Total costs = \$9,600 + \$0.75 per machine hour

Operating budgets for the current month are based on 30,000 hours of planned machine time. The amount of indirect labor costs included in this planned budget is

A. \$2,425.                        &nbs p;                                   C. 23,300.
B. \$22,500.                        &nbs p;                                D. \$32,100.

8. Carlson Co. has a standard material price of \$ 2.80 per unit. During the month of August, the cost of direct materials was \$2.50 per unit for the 500 units produced. The formula (\$2.50 - \$2.80) X 500 yields the _____ variance for Carlson Co.

A. Combined price-quantity.                                      C. volume
B. materials price                        &nbs p;                                D. mix

9. Donellan Company has a standard and flexible budgeting system and uses a two variance method of analysis of overhead variances. Selected data for the February production activity follows:

Budgeted fixed factory overhead costs                                    \$70,000
Variable overhead rate per direct labor hour                             \$7
Standard direct labor hours                        &nbs p;                                25,000
Actual direct labor hours                        &nbs p;                                     26,006

The controllable variance for February is
A. \$5,000 favorable                        &nbs p;                                C. \$7,000 favorable
B. \$5,000 unfavorable          &nb sp;                                          D. \$7,000 Unfavorable

10. If the total materials variance (actual cost of materials used compared with the standard cost of the standard amount of materials required) for a given operation is favorable, why must this variance be futher evaluated as to price and usage?

A. There’s no need to further evaluate the total materials variance if it’s favorable.
B. Generally accepted accounting principles require that all variances be analyzed in three stages.
C.All variances must appear in the annual report to equity owners for proper disclosure.
D. Evaluating a favorable variance helps
Submitted: 8 years ago.
Category: Homework
Expert:  Manal Elkhoshkhany replied 8 years ago.

HelloCustomer/p>

Thank you

Customer: replied 8 years ago.

Cost Accounting, Fourteenth edition, Edward J. Vanderbeck, Asap.....

Stevens,

Expert:  Manal Elkhoshkhany replied 8 years ago.

Hi Stevens

P.S. I am not 100% sure about number 4, can you please update me when you get the results?

If you like my work, please feel free to direct your future posts to me specifically by typing "For BusinessTutor" at the beginning of your post. Should you choose to do this, please try to allow me 48 hours before the deadline. If you need to meet me online fo a timed assignment, please advise me of the date and time (EST) you want me to meet you here and I will. Thank you

Customer: replied 8 years ago.

Hi Tutor, please send us the answers corresponding to the question no. 8; the

anwers is missing?

Regards,

Stevens

Expert:  Manal Elkhoshkhany replied 8 years ago.