1-The following information is from the static budget of AAA plc for 2016 .

Expected production and sales	5,400 units
Expected selling price per unit	$ 850
Total fixed costs	$1,110,000

Standard quantities, standard prices and standard unit costs follow for direct materials and direct manufacturing labor:

	Standard Quantity	Standard Price	Standard Unit Cost
Direct materials	10 pounds	$10 per pound	$100
Direct manufacturing labor	4 hours	$26 per hour	$104

During 2016, actual number of units produced and sold was 5,350, at an average selling price of $800. Actual cost of direct materials used was $ 1,149,400, based on 70,000 pounds purchased at $16.42 per pound. Direct manufacturing labor hours actually were 17,000 at the rate of $ 33.70 per hour. As a result, actual direct manufacturing labor costs were $572,900. Actual fixed costs were $1,200,000. There were no beginning or ending inventories.

Revenues and costs for 2016 are as under:

2016	Static Budget	Actual
Total costs	$2,211,600	$2,922,300
Revenues	$4,590,000	$4,280,000

What is the flexible-budget variance of operating income?

a. $988,400 unfavorable

b. $32,300 favorable

c. $988,400 favorable

d. $32,300 unfavorable

e. NONE OF THE GIVEN OPTIONS

2-The top management at Sisco Corp, a manufacturer of computer games, is attempting to recover from a flood that destroyed some of their accounting records. The main computer system was also severely damaged. The following information was salvaged:

Sales $7,000,000

Net operating income $5,500,000

Operating assets ?

Return on investment (ROI) 0.26

Return on sales 62.5%

What is the value of the operating assets belonging to the company?

a. NONE OF THE GIVEN OPTIONS

b. $26,923,077

c. $1,820,000

d. $12,500,000

e. $21,153,846

3-A manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to undetectable materials defects. Spoiled units constitute 3% of the good units. Data for December 2017 are as follows:

WIP, beginning inventory 12/1/2017 22,600 units

Direct materials (100% complete)

Conversion costs (80% complete)

Started during December 77,000 units

Completed and transferred out 12/31/2017 72,900 units

WIP, ending inventory 12/31/2017 18,600 units

Direct materials (100% complete)

Conversion costs (65% complete)

Costs for December:

WIP, beginning Inventory:

Direct materials 154,000

Conversion costs 76,800

Direct materials added 230,400

Conversion costs added 290,000

Abnormal spoilage totals ?

a. 2187 units

b. NONE OF THE GIVEN OPTIONS

c. 2430 units

d. 5913 units

e. 8100 units

4- A Corporation is a manufacturer of computer accessories. It uses standard costs and reports the following data for 2017:

Budgeted production	265,000 units
Actual Production	235,000 units
Selling price	$39 per unit
Beginning inventory	35,000 units
Sales volume	250,000 units
Variable budgeted manufacturing cost	$10 per unit
Total budgeted fixed manufacturing costs	$2,915,000
Total budgeted operating (non - manufacturing costs) (all fixed)	$2,000,000

There are no price, spending, or efficiency variances. Actual operating costs equal budgeted operating costs. The production-volume variance is written off to cost of goods sold.

What is the production-volume variance in 2017?

a. $565,000 U

b. $565,000 F

c. NONE OF THE GIVEN OPTIONS

d. $330,000 U

e. $265,000 F

f. $330,000 F

g. $915,000 U

h. $265,000 U

i. $915,000 F