A202 practice exam. Answers at the end. 1. Seventy percent of Pitkin Corporation's sales are collected in the month of sale, 20% in the month following sale, and 10% in the second month following sale. The following are budgeted sales data for the company: January February March April Budgeted sales $200,000 $300,000 $350,000 $250,000 Total budgeted cash collections in April would be: A) $175,000 B) $275,000 C) $70,000 D) $30,000 2. Masde Corporation produces and sells Product CharlieD. To guard against stockouts, the company requires that 25% of the next month's sales be on hand at the end of each month. Budgeted sales of Product CharlieD over the next four months are: June July August September Budgeted sales in units 40,000 60,000 50,000 80,000 Budgeted production for August would be: A) 57,500 units B) 107,000 units C) 77,000 units D) 80,000 units 3. Paradise Corporation budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels (in units) are planned for next year. Beginning Inventory Ending Inventory Raw material* 30,000 40,000 Finished goods 70,000 60,000 * Three pounds of raw material are needed to produce each unit of finished product. If Paradise Corporation plans to sell 510,000 units during next year, the number of units it would have to manufacture during the year would be: A) 500,000 units B) 520,000 units C) 510,000 units D) 570,000 units4. The selling and administrative expense budget of Choo Corporation is based on budgeted unit sales, which are 4,600 units for August. The variable selling and administrative expense is $7.30 per unit. The budgeted fixed selling and administrative expense is $51,980 per month, which includes depreciation of $6,440 per month. The remainder of the fixed selling and administrative expense represents current cash requirements. The cash disbursements for selling and administrative expenses on the August selling and administrative expense budget should be: A) $85,560 B) $45,540 C) $79,120 D) $33,580 5. Michard Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: a. The budgeted selling price per unit is $125. Budgeted unit sales for April, May, June, and July are 7,600, 10,500, 13,800, and 12,900 units, respectively. b. The ending finished goods inventory equals 20% of the following month's sales. c. The direct labor wage rate is $25.00 per hour. Each unit of finished goods requires 3.0 direct labor-hours. The estimated direct labor cost for May is closest to: A) $558,000 B) $33,480 C) $837,000 D) $279,000 6. Mongelli Family Inn is a bed and breakfast establishment in a converted 100-year-old mansion. The Inn's guests appreciate its gourmet breakfasts and individually decorated rooms. The Inn's overhead budget for the most recent month appears below: Activity level 90guests Variable overhead costs: Supplies $ 234 Laundry 315 Fixed overhead costs: Utilities 220 Salaries and wages 4,290 Depreciation 2,680 Total overhead cost $ 7,739 The Inn's variable overhead costs are driven by the number of guests. What would be the total budgeted overhead cost for a month if the activity level is 99 guests? (Round your intermediate calculations to 2 decimal places.)A) $7,793.90 B) $61,541.00 C) $8,512.90 D) $7,739.00 7. Herlocker Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. Fixed Element per Month Variable Element per Container Refurbished Revenue $ 4,600 Employee salaries and wages $ 42,700 $ 1,100 Refurbishing materials $ 600 Other expenses $ 29,100 When the company prepared its planning budget at the beginning of February, it assumed that 26 containers would have been refurbished. The amount shown for revenue in the planning budget for February would have been closest to: A) $136,300 B) $119,600 C) $133,400 D) $122,200 8. Hamiter Framing's cost formula for its supplies cost is $1,640 per month plus $9 per frame. For the month of August, the company planned for activity of 572 frames, but the actual level of activity was 573 frames. The actual supplies cost for the month was $7,080. The supplies cost in the planning budget for August would be closest to: A) $7,080 B) $7,068 C) $6,788 D) $6,797 9. Refer to the data in question 8. Upon preparation of a flexible budget and comparison to the original planning budget, the amount of variance related solely to volume would be: A) $9 F B) $9 U C) $1,932 UD) $1,932 F 10. IGNORE THIS QUESTION!! Thilges Incorporated makes a single producta cooling coil used in commercial refrigerators. The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period. Data concerning the most recent year appear below: Budgeted variable manufacturing overhead $ 29,125 Budgeted production (a) 25,000 units Standard hours per unit (b) 0.50 machine-hours Budgeted hours (a) (b) 12,500 machine-hours Actual production (a) 22,000 units Standard hours per unit (b) 0.50 machine-hours Standard hours allowed for the actual production (a) (b) 11,000 machine-hours Actual variable manufacturing overhead $ 30,160 Actual hours 10,400 machine-hours The variable overhead efficiency variance is: (Round your intermediate calculations to 2 decimal places.) A) $1,740 U B) $1,398 F C) $1,740 F D) $1,398 U 11. The Rowe Corporation uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of standard machine-hours. During January, the company budgeted to incur $225,000 in manufacturing overhead cost and to operate at a denominator activity level of 25,000 machine-hours. At standard, each unit of finished product requires 3 machine-hours. The following cost and activity were recorded during January: Total actual manufacturing overhead cost incurred $ 217,750 Units of product completed 8,000Actual machine-hours worked 23,000 The amount of overhead cost that the company applied to Work in Process for January was: A) $217,750 B) $225,000 C) $221,600 D) $216,000 12. The standard cost card for one unit of a finished product shows the following: Standard Quantity or Hours Standard Price or Rate Direct materials 12 feet $ ? per foot Direct labor 1.5 hours $ 12 per hour Variable manufacturing overhead 1.5 hours $ 8 per hour If the total standard variable cost for one unit of finished product is $78, then the standard price per foot for direct materials is: A) $2 B) $3 C) $4 D) $5 13. The following materials standards have been established for a particular product: Standard quantity per unit of output 4.6 grams Standard price $ 15.05 per gram The following data pertain to operations concerning the product for the last month: Actual materials purchased 3,100 grams Actual cost of materials purchased $ 44,020 Actual materials used in production 2,400 grams Actual output 300 units What is the materials quantity variance for the month? A) $9,940 U B) $15,351 U C) $14,484 U D) $10,535 U14. refer to the data in question 13. What was the Material Price Variance? A) $2,635 F B) $7,900 U C) $7,900 F D) $2,635 U 15. The following materials standards have been established for a particular product: Standard quantity per unit of output 5.3 meters Standard price $ 17.20 per meter The following data pertain to operations concerning the product for the last month: Actual materials purchased 8,100 meters Actual cost of materials purchased $ 141,345 Actual materials used in production 7,600 meters Actual output 1,400 units What is the materials purchase price variance for the month? A) $3,141 U B) $2,025 U C) $8,600 U D) $8,725 U 16. A total of 6,850 kilograms of a raw material was purchased at a total cost of $21,920. The materials price variance was $1,370 favorable. The standard price per kilogram for the raw material must be: A) $0.20 B) $3.00 C) $3.20 D) $3.40 17. The following labor standards have been established for a particular product: Standard labor-hours per unit of output 8.7 hours Standard labor rate $ 18.10 per hour The following data pertain to operations concerning the product for the last month:Actual hours worked 3,800 hours Actual total labor cost $ 67,640 Actual output 500 units What is the labor efficiency variance for the month? A) $9,790 F B) $11,095 U C) $9,955 F D) $11,095 F 18. The Fime Corporation uses a standard costing system. The following data have been assembled for December: Actual direct labor-hours worked 6,200 hours Standard direct labor rate $ 7 per hour Labor efficiency variance $ 2,100 Unfavorable The standard hours allowed for December's production is: A) 5,900 hours B) 6,500 hours C) 6,200 hours D) 6,000 hours 19. Krizun Industries makes heavy construction equipment. The standard for a particular crane calls for 20 direct labor-hours at $24 per direct labor-hour. During a recent period 875 cranes were made. The labor efficiency variance was $1,200 Unfavorable. How many actual direct labor-hours were worked? A) 17,600 direct labor-hours B) 17,450 direct labor-hours C) 17,500 direct labor-hours D) 17,550 direct labor-hours 20. The direct labor standards for a particular product are 4 hours of direct labor at $12.00 per direct labor-hour = $48.00. During October, 3,350 units of this product were made, which was 150 units less than budgeted. The labor cost incurred was $159,786 and 13,450 direct labor- hours were worked. The direct labor variances for the month were: Labor Rate Variance Labor Efficiency Variance A) $ 1,614U $ 600U B) $ 1,614U $ 600F C) $ 1,614F $ 600U D) $ 1,614F $ 600FAnswers 1. B 2. A 3. A 4. C 5. C 6. D 7. B 8. C 9. B 10. B 11. D 12. C 13. B 14. A 15. B 16. D 17. C 18. A 19. D 20. C