Reference no: EM133043977

Questions -

Q1. At the beginning of the period, the Cutting Department budgeted direct labor of $129,000, direct materials of $156,000 and fixed factory overhead of $13,400 for 7,400 hours of production. The department actually completed 11,200 hours of production. What the appropriate total budget for the department, assuming it uses flexible budgeting?

a. $305,281

b. $298,400

c. $451,632

d. $444,751

Q2. Starling Co. is considering disposing of a machine with a book value of $20,400 and estimated remaining life of five years. The old machine can be sold for $5,700. A new high-speed machine can be purchased at a cost of 74,000. It will have a useful life of five years and no residual value. It is estimated that the annual variable manufacturing costs will be reduced from $23,500 to $20,900 if the new machine is purchased. What the five-year differential effect on profit from replacing the machine?

a. increase of $55,300

b. decrease of $55,300

c. decrease of $71,890

d. increase of $71,890'

Q3. Carmen Co. can further process Product J to produce Product D. Product J is currently selling for $20.20 per pound and costs $16.85 per pound to produce. Product D would sell for $42.80 per pound and would require an additional cost of $11.55 per pound to produce. What the differential cost of producing Product D?

a. $9.24 per pound

b. $11.55 per pound

c. $6.93 per pound

d. $13.86 per pound