Reference no: EM132753281

Questions -

Q1. If sales are $791,000, variable costs are 66% of sales, and operating income is $212,000, what is the contribution margin ratio?

a. 34%

b. 62%

c. 66%

d. 38%

Q2. Japan Company produces lamps that require 3 standard hours per unit at a standard hourly rate of $17.40 per hour. Production of 7,700 units required 22,640 hours at an hourly rate of $17.90 per hour.

What is the direct labor (a) rate variance, (b) time variance, and (c) total cost variance? Enter favorable variances as negative numbers.

a. Direct labor rate variance $ Favorable/unfavorable

b. Direct labor time variance $ Favorable/unfavorable

c. Total direct labor cost variance $ Favorable/unfavorable

Q3. Ruby Company produces a chair for which the standard specifies 3 yards of material per unit. The standard price of one yard of material is $9.90. During the month, 7,300 chairs were manufactured, using 21,700 yards at a cost of $9.40 per yard.

Determine the following: Enter favorable variances as negative numbers.

a. Direct materials price variance $? Favorable/unfavorable?

b. Direct materials quantity variance $? Favorable/unfavorable?

c. Total direct materials cost variance $? Favorable/unfavorable?

Q4. Strait Co. manufactures office furniture. During the most productive month of the year, 3,600 desks were manufactured at a total cost of $82,400. In the month of lowest production, the company made 1,250 desks at a cost of $64,100. Using the high-low method of cost estimation, total fixed costs are

a. $82,400

b. $54,356

c. $64,100

d. $18,300

Q5. Tucker Company produced 6,300 units of product that required 3.40 standard hours per unit. The standard variable overhead cost per unit is $4.80 per hour. The actual variable factory overhead was $104,870.

Determine the variable factory overhead controllable variance. Enter a favorable variance as a negative number.

Q6. Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business September, October, and November are $248,000, $316,000, and $413,000, respectively. The company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale.

The cash collections expected in November from accounts receivable are projected to be:

a. $231,280

b. $330,624

c. $187,040

d. $275,520

Q7. The following data relate to direct labor costs for March:

Rate: standard, $12.00; actual, $12.25

Hours: standard, 18,500; actual, 17,955

Units of production: 9,450

The direct labor rate variance is

a. $6,851.25 unfavorable

b. $4,488.75 unfavorable

c. $4,488.75 favorable

d. $6,851.25 favorable

Q8. At the beginning of the period, the Assembly Department budgeted direct labor of $110,000, direct materials of $170,000, and fixed factory overhead of $28,000 for 8,000 hours of production. The department actually completed 10,000 hours of production. The appropriate total budget for the department, assuming it uses flexible budgeting, is

a. $378,000

b. $350,000

c. $305,000

d. $288,000

Q9. If sales are $425,000, variable costs are 62% of sales, and operating income is $50,000, the contribution margin ratio is

a. 11.8%

b. 38.0%

c. 26.8%

d. 62.0%