Question
46. Freeman Company plans to sell 65,000 units in June and 72,500 units in July. Freemans policy is to keep 30% of the next month's
46. Freeman Company plans to sell 65,000 units in June and 72,500 units in July. Freemans policy is to keep 30% of the next month's sales in ending inventory. If the ending inventory in May was consistent with this policy, how many units should be produced in June?
a. 86,750 units
b. 106,250 units
c. 67,250 units
d. 62,750 units
e. None of the answer choices is correct.
Exhibit 10-1
Flatland Company applies fixed manufacturing overhead costs to products based on direct labor hours. Information for the month of April appears below. Flatland expects to produce and sell 18,000 units for the month.
Below is budget information for Flatland Company.
Budgeted fixed overhead costs | $270,000 |
Budgeted direct labor hours | 90,000 hours |
Standard direct labor hours per unit | 5 hours per unit |
Actual production | 17,000 |
Actual fixed overhead costs | $280,000 |
47. Refer to Exhibit 10-1. Based on this information, what is the standard cost per direct labor hour (rounded to the nearest cent)?
a. $5.29
b. $3.11
c. $3.00
d. $15.00
e. None of the answer choices is correct.
48 Refer to Exhibit 10-1. Based on this information, what is the fixed overhead spending variance?
a. $15,000 favorable
b. $10,000 unfavorable
c. $15,000 unfavorable
d. $10,000 favorable
e. None of the answer choices is correct.
49. Refer to Exhibit 10-1. Based on this information, what is the fixed overhead production volume variance?
a. $15,000 unfavorable
b. $10,000 favorable
c. $15,000 favorable
d. $10,000 unfavorable
e. None of the answer choices is correct.
Exhibit 10-2
Bennys Bakery produces bagels for resale at local grocery stores. The master budget indicates that the company expects to use 2.5 pounds of direct materials for each unit produced at a cost of $10.00 per pound (one unit = one batch of bagels). Each unit produced will require 0.30 direct labor hours at a cost of $24.00 per hour. Variable manufacturing overhead is applied based on direct labor hours at a rate of $4.80 per hour. Last year's sales were expected to total 40,000 units. Benny just received last year's actual results showing sales of 35,000 units.
50. Refer to Exhibit 10-2. What amount would the flexible budget show for direct materials?
a. $1,000,000
b. $350,000
c. $140,000
d. $875,000
e. None of the answer choices is correct.
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