1. The starting point for the Direct Labor Budget is:

Multiple Choice

• the materials to be purchased from the direct materials budget.

• the units to be sold from the sales budget.

• the ending inventory from the budgeted balance sheet.

• the units to be produced from the production budget.

2. Leaf Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $117,000, variable manufacturing overhead of $2.00 per machine-hour, and 30,000 machine-hours. The company has provided the following data concerning Job P978 which was recently completed:

Number of units in the job		20
Total machine-hours		80
Direct materials	$	500
Direct labor cost	$	2,640

The predetermined overhead rate is closest to:

Multiple Choice

• $3.90 per machine-hour

• $5.90 per machine-hour

• $4.90 per machine-hour

• $2.00 per machine-hour

3. A $2.00 increase in a product's variable expense per unit will:

Multiple Choice

• increase the contribution margin.

• decrease the units sold needed to earn a target profit.

• have no effect on the contribution margin ratio.

• increases the units sold needed to breakeven.

3. Bracken Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 2,140 client-visits, but its actual level of activity was 2,100 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for September:

Data used in budgeting:

	Fixed element per month			Variable element per client-visit
Revenue				$	44.50
Personnel expenses	$	26,100		$	12.60
Medical supplies		600			7.20
Occupancy expenses		6,500			2.40
Administrative expenses		3,100			0.10
Total expenses	$	36,300		$	22.30

Actual results for September:

Revenue	$	93,240
Personnel expenses	$	50,754
Medical supplies	$	15,328
Occupancy expenses	$	11,646
Administrative expenses	$	3,394

The revenue variance for September would be closest to:

Multiple Choice

• $1,990 F

• $210 F

• $210 U

• $1,990 U