Reference no: EM132716160

Questions -

Q1. The Fortise Corporation manufactures two types of vacuum cleaners, the Victor for commercial building use and the House-Mate for residences. Budgeted and actual operating data for the year 2017 were as follows:

Static Budget Victor House-Mate Total

Number sold 6,000 24,000 30,000

Contribution margin $1,600,000 $3,120,000 $4,720,000

Actual Results Victor House-Mate Total

Number sold 5,000 35,000 40,000

Contribution margin $1,580,000 $4,180,000 $5,760,000

What is the total static-budget variance in terms of the contribution margin?

A. $1,080,000 favorable

B. $1,040,000 unfavorable

C. $1,040,000 favorable

D. $1,080,000 unfavorable

Q2. Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $400,000are allocated on the basis of budgeted warehouse-hours. Data Center Department costs of $200,000 are allocated based on the number of computer log-on hours. The costs of operating departments Music and Books are $150,000 and $180,000, respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as follows:

Support Departments Production Departments Warehouse Department Data Center Department

Music Books

Budgeted costs $400,000 $200,000 $150,000 $180,000

Budgeted warehouse-hours NA 510 1,050 1,550

Number of computer hours 300 NA 890 1,050

Using the direct method, what amount of Warehouse Department costs will be allocated to Department Books?

A. $180,000

B. $238,462

C. $199,357

D. $161,538