7 yeasy Accounting Questions! i give thumbs up

Z-Fit is currently running 20 fitness classes per week with a capacity of 10 students per class. They pay their instructors $20 per class regardless of the number of students participating. As the manager, it is your job to review the actual to budget and note areas for improvement. Your review notes that the average student participation is 6 students per class. What would you suggest for improvement? Begin to pay your instructors per participant rather than per class Reduce the number of classes to increase the per class participation and lower the direct labor costs O Continue the same number of classes but pay the instructors only part of their wage XYZ Company shows a $1,000 increase in revenue for the period. In their budget for each $1 increase in revenue, there should be a $.25 increase in direct materials. In reviewing the budget to actual, you notice an increase in direct materials of $210. Do you have favorable or unfavorable variances? Favorable revenue and unfavorable expense variances Favorable revenue and either favorable or unfavorable expense variance. We don't have enough information O Favorable revenue and expense variances Mike's Bikes budgeted $20,500 for labor in 2017. Actual labor ended up being $25,800. Mike went back to look at prior years and noted that his direct labor was always within 5% of budget. Is this variance significant? How should Mike handle this? This is a significant variance and Mike should analyze sales, machinery breakdowns or issues or employee turnover to see if there is a reason for the high labor variance This is a significant variance and Mike needs to adjust his labor down immediately to lower his labor cost back in line with budget This is not a significant variance and Mike needs to adjust his budget since labor costs are higher than budgeted A favorable price variance and an unfavorable quantity variance will create a: An unfavorable spending variance. Either a favorable or unfavorable spending variance O A favorable spending variance The purchasing manager and production manager walk into your office yelling at each other. Each is blaming the other for the additional raw material cost! Your purchasing manager spent $1 more per pound because the vendor told her it was a higher quality product. The production manager is angry because it is affecting his standard price variance! What should you do? Instruct the purchasing manager to go back to ordering the material that the standard costing was based on Instruct the production manager to update his budget to reflect the new pricing. O Review the quantity being used per item produced to determine if the higher cost of raw material is saving money elsewhere in the production process. The expected quantity of raw materials to be purchased was 15,000 pounds. Records show the actual quantity purchased was 12,000 pounds. What may have caused this variance? O Check if production levels matched budget. If they did, then perhaps more efficient production processes were in place to reduce usage. O if production quantities matched budget, you probably had some new employees being trained There may be problems with the production equipment. The best quality product at the lowest cost can be made by o Putting good systems in place from budgeting to purchasing to production to maintenance O Buying the lowest cost raw materials to keep costs down O Paying the lowest wages allowed to keep labor costs down