4 G. Company has a material standard of 1.1 pound per unit of output. Each pound has a standard price of $25 per pound. During July, G Company paid $118,800 for 5,100 pounds, which they used to produce 4,900 units. What is the direct materials efficiency variance? $7,250 favorable O $5,000 favorable O $7,250 unfavorable O $5,000 unfavorable QUESTION 5 Which of the following is true of a company that uses absorption costing? ONet operating income fluctuates directly with changes in sales volume. Fixed production and fixed selling costs are considered to be product costs. Unit product costs can change as a result of changes in the number of units manufactured. O Variable selling expenses are included in product costs. QUESTION 6 The variable overhead spending variance is most effective in measuring O how well overhead spending matches the targets set in the original budget at the beginning of the year O the efficiency with which the activity base was utilized in production the excessive use of overhead resources O the utilization of plant facilities QUESTION 7 Which of the following would explain an unfavorable variable overhead efficiency variance? (1) Employees were of a lower skill level than specified in the standard: (2) Unexpected idle time resulted from a series of machine breakdown: (3) Poor Quality material was difficult to process O (1), (2) and (3) O (1) and (2) O (2) and (3) (1) and (3) QUESTION 8 The Royale Company has a standard cost system in which manufacturing everhead is applied to units of product on the basis of direct labor-hours (DLHS). The company recorded the following data relating to manufacturing overhead for September: Number of units completed 31,200 units: Standard direct labor-hours per unit 54.000 DLHS Actual fixed overhead costs incurred 1.6 DUH Denominator activity applied fixed overhead cost in the company's overhead budget for September was $3.468 Unfavorable: Fixed portion of the predetermined overhead rate $51.300 Quantity variance $45,900 10.115 per DLH. The amount of O $54.768 O $49,920 O $47,703 QUESTION 9 Which of the following may be the likely reason for a favorable direct labor rate variance? O overestimated standard labor cost changes to the product specification which reduced manufacturing time O reduction in direct labor costs due to a strike in the factory O overestimated standard labor time per unit QUESTION 10 Choose the correct statements from the following: Variable costing and absorption costing are the same. For decision making, absorption costing is more suitable than variable costing. Variable costing is based on the distinction between fixed and variable costs. Absorption costing produces a lower product cost. QUESTION 11 An equivalent unit of material or conversion cost is equal to: The amount of material conversion cost necessary to complete one unit of production. OA unit of work-in-process inventory. O The amount of material or conversion cost necessary to start a unit of production into work in process inventory. O Fifty percent of material or conversion cost of a unit to finished goods inventory