41.Assume the following:

• The standard price per pound is $3.20.
• The actual quantity of materials purchased is 62,000 pounds.
• The actual quantity of materials used in production is 60,000 pounds.
• The standard quantity allowed for the actual level of output is 59,200 pounds.

What is the materials quantity variance?

Multiple Choice

• $2,560 F

• $8,960 U

• $8,960 F

• $2,560 U

42.

Assume a companys estimated sales is 35,000 units. Its desired ending finished goods inventory is 7,000 units, and its beginning finished goods inventory is 3,000 units. What is the required production in units?

Multiple Choice

• 39,000 units

• 25,000 units

• 32,000 units

• 45,000 units

43.

Assume the following information appears in the standard cost card for a company that makes only one product:

	Standard Quantity or Hours		Standard Price or Rate			Standard Cost
Direct materials	5	pounds	$	11.00	per pound	$	55.00
Direct labor	2	hours	$	17.20	per hour	$	34.40
Variable manufacturing overhead	2	hours	$	3.00	per hour	$	6.00

During the most recent period, the following additional information was available:

• 20,000 pounds of material was purchased at a cost of $10.50 per pound.
• All of the material that was purchased was used to produce 3,900 units.
• 8,000 direct labor-hours were recorded at a total cost of $132,000.

What is the direct labor rate variance?

Multiple Choice

• $5,600 F

• $2,800 F

• $2,800 U

• $5,600 U

44.

Assume the following:

• The standard price per pound is $2.90.
• The actual quantity of materials purchased and used in production is 60,000 pounds.
• The standard quantity allowed for the actual level of output is 59,200 pounds.

What is the materials quantity variance?

Multiple Choice

• $2,320 U

• $1,520 F

• $1,520 U

• $2,320 F

45.

Assume that a company manufactures numerous component parts, one of which is called Part A. The company makes 50,000 units of Part A per year and its absorption costing system indicates that, at this volume of production, it costs $23.00 per unit to make this part:

Direct materials	$	10.00
Direct labor		6.00
Variable overhead		2.00
Fixed overhead		5.00
Total absorption cost per unit	$	23.00

The company is trying to decide between two alternatives: Alternative 1: Continue making 50,000 units of Part A annually using its existing equipment at the unit cost shown above. The equipment used to make this part does not wear out through use and it has no resale value. Alternative 2: Purchase 50,000 units of Part A from a supplier at a cost of $18.97 per unit. If the company chooses alternative 2, it believes that $180,000 of the fixed manufacturing overhead cost being allocated to Part A will continue to be incurred. What is the financial advantage or (disadvantage) of buying the parts from a supplier?

Multiple Choice

• $21,500

• $(130,000)

• $(21,500)

• $130,000