1. A company is wanting to prepare a direct labor budget for the year. Details regarding production estimates is shown in the table below:

	Required production in units
Qtr. 1	12,000
Qtr. 2	15,000
Qtr. 3	13,500
Qtr. 4	17,000

If the estimated direct labor hours needed per unit is 1.25 and the cost per direct labor hour is $22.50, what is the estimated direct labor cost for Qtr. 2?

		$379,688
		$337,500
		$421,875
		$18,750

2. A company that makes a single product had the following details related to its standard costs:

	Standard Amount	Standard Price or Rate
Direct materials	5 pounds	$11.00 / pound
Direct labor	2 hours	$16.60 / hour
Variable manufacturing overhead	2 hours	$3.00 / hour

During the year actual results indicated the following:

• 20,000 pounds of material purchased for $10.50 per pound
• 3,900 units produced from all of the material purchased.
• Direct labor cost was $132,000 for 8,000 direct labor hours
• The actual variable manufacturing overhead rate was $2.75/hour.

Calculate the variable manufacturing overhead rate variance.

		$800 U
		$2,000 F
		$2,000 U
		$800 F

3. Which of the following statements are true?

I. The materials price variance is calculated using the actual quantity of materials purchased.

II. The materials price variance is calculated using a comparison of actual and standard purchase price.

III. The materials price variance is calculated using the standard quantity of materials purchased.