1. Brush Industries reports the following information for May:

Sales	$	935,000
Fixed cost of goods sold		107,000
Variable cost of goods sold		257,000
Fixed selling and administrative costs		107,000
Variable selling and administrative costs		132,000

Calculate the gross margin for May under absorption costing.

Multiple Choice

• $603,000

• $560,000

• $678,000

• $346,000

• $571,000

2. Webster Corporation is preparing a master budget for the first quarter. The company budgets production of 2,900 units in January, 2,710 units in February and 3,290 units in March. Each unit requires 0.6 hours of direct labor. The direct labor rate is $12 per hour. Compute the budgeted direct labor cost for the first quarter budget.

Bengal Co. provides the following unit sales forecast for the next three months:

	July			August			September
Sales units		8,000			8,700			5,900

3. The company wants to end each month with ending finished goods inventory equal to 30% of the next month's sales. Finished goods inventory on June 30 is 2,400 units. The budgeted production units for August are:

4. Use the following data to find the direct labor rate variance if the company produced 3,500 units during the period.

Direct labor standard (4 hrs. @ $7.00/hr.)	$	28.00	per unit
Actual hours worked		12,750
Actual rate per hour	$	7.50