19.

ABC Ltd., has budgeted sales in units for the next five months as follows:

June	6,000 units
July	5,200 units
August	5,400 units
September	6,200 units
October	6,100 units

Past experience has shown that the ending inventory for each month should be equal to 18% of the next month's sales in units. The inventory on May 31 contained 1,080 units. The company needs to prepare a production budget for the next five months. The total number of units produced in July should be:

5,200 units

6,172 units

5,236 units

5,164 units

20.

Washington and Lee Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During February, the company budgeted for 5,900 units, but its actual level of activity was 5,890 units. Washington and Lee provides you with the following data concerning the formulas used in its budgeting and its actual results for February:

Data used in budgeting:
	Fixed element per month	Variable element per unit
Revenue	0	$45.30
Direct labor	$0	$6.20
Direct materials	0	19.10
Manufacturing overhead	41,200	1.20
Selling and administrative expenses	26,600	.50
Total expenses	$67,800	$27.00

Actual results for February:
Revenue	$216,000
Direct labor	$29,300
Direct materials	$93,800
Manufacturing overhead	$43,800
Selling and administrative expenses	$28,400

The activity variance for net operating income in February would be closest to:

$1,683 U

$183 U

$183 F

$1,683 F

21.

Ben Casey Clinic uses client-visits as its measure of activity. During October, the clinic budgeted for 2,300 client-visits, but its actual level of activity was 2,320 client-visits. Ben Casey Clinic has provided the following data concerning the formulas to be used in its budgeting:

	Fixed element per month	Variable element per client-visit
Revenue	0	$70.50
Personnel expenses	$44,500	$23.60
Medical supplies	1,240	10.50
Occupancy expenses	9,690	2.20
Administrative expenses	6,690	.70
Total expenses	$62,120	$37.00

The activity variance for administrative expenses in October would be closest to:

$14 F

$210 F

$14 U

$210 U

22.

The ABC Company is developing standards for its direct labor. A particular product requires 0.74 direct labor-hours per unit. The allowance for breaks and personal needs is 0.1 direct labor-hours per unit. The allowance for cleanup, machine downtime, and rejects is 0.26 direct labor-hours per unit. The standard direct labor-hours per unit should be:

1.10

.74

.64

.38

23.

The Acme Company produces harmonicas for distribution on an international scale. Standards for a particular harmonica are:

Materials: 12 ounces per unit at 55 per ounce. Labor: 1 hours per unit at $2.65 per hour. During the month of December, the company produced 1,150 units. Information for the month follows: Materials: 13,800 ounces were purchased and used at a total cost of $5,740. Labor: 2,620 hours worked at a total cost of $9,200. The labor rate variance is (round your intermediate calculations to 2 decimal places):

$2,253.2 U

$2,253.2 F

$1126.6 U

$1126.6 F

24.

The management of Matsuura Corporation would like to set the selling price on a new product using the absorption costing approach to cost-plus pricing. The company's accounting department has supplied the following estimates for the new product:

	Per Unit	Per Year
Direct materials	$48.20
Direct labor	$15.20
Variable manufacturing overhead	$7.20
Fixed annual manufacturing overhead		$53,240
Variable selling and administrative expenses	$3.20
Fixed annual selling and administrative expenses		$13,640

Management plans to produce and sell 2,200 units of the new product annually. The new product would require a return on investment of $26,600 (the required ROI x the required investment).

To the nearest whole percent, the markup percentage on absorption cost is: (Round your answer to 2 decimal places.)

11.33%

3.33%

22.67%

8.00%

25. Eckhart Company uses the absorption costing approach to cost-plus pricing as described in the text to set prices for its products. Based on budgeted sales of 67,000 units next year, the unit product cost of a particular product is $13.30. The company's selling and administrative expenses for this product are budgeted to be $758,754 in total for the year. The company has invested $390,000 in this product and expects a return on investment of 12%. The selling price based on the absorption costing approach for this product would be closest to:

$24.62

$39.9

$14.58

$25.32