1. Lea Company produces hand tools. Budgeted sales for March are 10,700 units. Beginning finished goods inventory in March is budgeted to be 2,300 units, and ending finished goods inventory is budgeted to be 2,000 units. How many units will be produced in March?

A 10,700

B 11,000

C 10,400

D 15,000

2. Peach has received a special order for 10,000 units of its product. The product normally sells for $29 and has the following manufacturing costs:

	Per unit
Direct materials		$	6
Direct labor			5
Variable manufacturing overhead			3
Fixed manufacturing overhead			11
Unit cost		$	25

Assume that Peach has sufficient capacity to fill the order. What price should Peach charge to make a $10,000 incremental profit?

A $25

B $15

C $22

D $29

3. Manufacturing overhead was estimated to be $365,400 for the year along with 20,300 direct labor hours. Actual manufacturing overhead was $380,000, and actual labor hours were 21,700. To dispose of the balance in the Manufacturing Overhead account, which of the following would be correct?

A Manufacturing Overhead would be debited for $14,600

B Manufacturing Overhead would be debited for $10,600

C Manufacturing Overhead would be credited for $14,600

D Manufacturing Overhead would be credited for $10,600

4. Pinto Co. has received a special order for 2,900 units of its product at a special price of $190. The product normally sells for $230 and has the following manufacturing costs:

	Per unit
Direct materials		$	62
Direct labor			53
Variable manufacturing overhead			42
Fixed manufacturing overhead			69
Unit cost		$	226

Assume that Pinto Co. has sufficient capacity to fill the order without harming normal production and sales. If Pinto Co. accepts the order, what effect will the order have on the companys short-term profit?

A $95,700 increase

B$104,400 increase

C $116,000 decrease

D$104,400 decrease

5. Jillian Inc. produces leather handbags. The production budget for the next four months is: July 5,200 units, August 7,600, September 7,500, October 8,300. Each handbag requires 1.9 hours of unskilled labor (paid $15 per hour) and 3.2 hours of skilled labor (paid $23 per hour). What will be the total labor cost for the month of August?

A $174,800

B $126,360

C $559,360

D $775,960