3.

The following labor standards have been established for a particular product:

Standard labor-hours per unit of output	9.8	hours
Standard labor rate	$13.60	per hour

The following data pertain to operations concerning the product for the last month:

Actual hours worked	7,600	hours
Actual total labor cost	$100,320
Actual output	950	units

What is the labor efficiency variance for the month?

$26,296 F

$26,296 U

$22,572 F

$23,256 F

12.

Hurren Corporation makes a product with the following standard costs:

	Standard Quantity or Hours	Standard Price or Rate	Standard Cost Per Unit
Direct materials	5.3 grams	$7.00 per gram	$37.10
Direct labor	0.8 hours	$18.00 per hour	$14.40
Variable overhead	0.8 hours	$7.00 per hour	$5.60

The company reported the following results concerning this product in June.

Originally budgeted output	5,700	units
Actual output	5,600	units
Raw materials used in production	28,470	grams
Actual direct labor-hours	4,400	hours
Purchases of raw materials	32,700	grams
Actual price of raw materials purchased	$7.10	per gram
Actual direct labor rate	$18.90	per hour
Actual variable overhead rate	$6.70	per hour

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The variable overhead efficiency variance for June is:

$536 F

$560 U

$536 U

$560 F

13.

Hurren Corporation makes a product with the following standard costs:

	Standard Quantity or Hours	Standard Price or Rate	Standard Cost Per Unit
Direct materials	4.1 grams	$7.00 per gram	$28.70
Direct labor	0.7 hours	$10.00 per hour	$7.00
Variable overhead	0.7 hours	$7.00 per hour	$4.90

The company reported the following results concerning this product in June.

Originally budgeted output	7,100	units
Actual output	7,000	units
Raw materials used in production	28,350	grams
Actual direct labor-hours	4,500	hours
Purchases of raw materials	31,500	grams
Actual price of raw materials purchased	$7.10	per gram
Actual direct labor rate	$10.90	per hour
Actual variable overhead rate	$6.70	per hour

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The variable overhead rate variance for June is:

$1,470 U

$1,470 F

$1,350 F

$1,350 U

18.

Oddo Corporation makes a product with the following standard costs:

	Standard Quantity or Hours	Standard Price or Rate	Standard Cost Per Unit
Direct materials	2.0 ounces	$12.00 per ounce	$24.00
Direct labor	0.6 hours	$18.00 per hour	$10.80
Variable overhead	0.6 hours	$10.50 per hour	$6.30

The company reported the following results concerning this product in December.

Originally budgeted output	11,200	units
Actual output	11,000	units
Raw materials used in production	16,800	ounces
Actual direct labor-hours	6,800	hours
Purchases of raw materials	18,400	ounces
Actual price of raw materials	11.75	per ounce
Actual direct labor rate	14.80	per hour
Actual variable overhead rate	7.80	per hour

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The materials price variance for December is:

$66,600 U

$66,600 F

$4,600 F

$4,600 U

22.

Lusk Company produces and sells 14,200 units of Product X each month. The selling price of Product X is $24 per unit, and variable expenses are $18 per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $73,000 of the $103,000 in fixed expenses charged to Product X would continue even if the product was discontinued. These data indicate that if Product X is discontinued, the company's overall net operating income would:

rev: 10_16_2014_QC_56453

decrease by $55,200 per month

increase by $17,800 per month

increase by $47,800 per month

decrease by $47,800 per month

25.

Wiacek Corporation has received a request for a special order of 5,100 units of product F65 for $28.10 each. Product F65's unit product cost is $27.55, determined as follows:

Direct materials	$3.15
Direct labor	8.45
Variable manufacturing overhead	7.55
Fixed manufacturing overhead	8.40
Unit product cost	$27.55

Direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product F65 that would increase the variable costs by $4.40 per unit and that would require an investment of $15,000 in special molds that would have no salvage value.

This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. If the special order is accepted, the company's overall net operating income would increase (decrease) by:

$(34,635)

$8,205

$2,805

$(86,955)

34.

Brown Corporation makes four products in a single facility. These products have the following unit product costs:

	Products
	A	B	C	D
Direct materials	$16.00	$19.90	$12.90	$15.60
Direct labor	18.00	21.40	15.80	9.80
Variable manufacturing overhead	4.80	6.00	8.50	5.50
Fixed manufacturing overhead	27.90	14.80	14.90	16.90
Unit product cost	$66.70	$62.10	$52.10	$47.80

Additional data concerning these products are listed below.

	Products
	A	B	C	D
Grinding minutes per unit	2.20	1.30	0.90	0.50
Selling price per unit	$80.70	$73.10	$69.90	$64.60
Variable selling cost per unit	$3.00	$3.50	$3.20	$3.90
Monthly demand in units	3,400	2,400	2,400	4,400.00

The grinding machines are potentially the constraint in the production facility. A total of 10,500 minutes are available per month on these machines. Direct labor is a variable cost in this company.

Which product makes the MOST profitable use of the grinding machines?

Product B

Product A

Product C

Product D

35.

Sohr Corporation processes sugar beets that it purchases from farmers. Sugar beets are processed in batches. A batch of sugar beets costs $52 to buy from farmers and $11 to crush in the company's plant. Two intermediate products, beet fiber and beet juice, emerge from the crushing process. The beet fiber can be sold as is for $22 or processed further for $13 to make the end product industrial fiber that is sold for $61. The beet juice can be sold as is for $43 or processed further for $26 to make the end product refined sugar that is sold for $61.

How much more profit (loss) does the company make by processing one batch of sugar beets into the end products industrial fiber and refined sugar?

$(102)

$(4)

$20

$9