1. A&B Co. provides house cleaning services. The company uses the number of jobs to measure activity. At the beginning of April, the company budgeted for 80 jobs, but the actual number of jobs turned out to be 90. A report comparing the budgeted revenues and costs to the actual revenues and costs appears below:

   A&B Co.
   For the Month Ended April 30
   		Revenue/Cost Formulas	Actual Results	Planning Budget
   Number of jobs (Q)			90	80
   Revenue		$100Q	8,900	8,000
   Expenses:
   	Variable expenses	?	3,800	3,200
   	Fixed expense	?	2,100	2,500
   Total expenses			5,900	5,700
   Net operating income			3,000	2,300

   What is the amount of spending variance for variable expenses in A&Bs performance report for April?

   	A.	$600 favorable
   	B.	$600 unfavorable
   	C.	$200 favorable
   	D.	$200 unfavorable

2. Lee Company's standards for the most recent period are given below. Fixed and variable manufacturing overhead costs are applied to products on the basis of machine hours. The denominator volume of machine hours is 9,000.

   	Standard Quantity or Hours per unit	Standard Price or Rate per unit	Standard Cost per unit
   Direct Materials	3 feet	$6 per foot	$18
   Direct Labor	1.5 direct labor hours	$10 per direct labor hour	$15
   Variable Overhead	2 machine hours	$12 per machine hour	$24
   Fixed Overhead	2 machine hours	$15 per machine hour	$30

   Actual costs for the most recent period, during which 5,000 units of output were actually produced and used 9,600 machine hours, are given below:

   Direct Materials	The firm purchased 16,000 feet at $6.30 per foot, but only used 14,500 feet in production.
   Direct Labor	The firm used 7,150 direct labor hours and paid $11 per direct labor hour.
   Variable Overhead	Actual variable overhead costs were $122,880.
   Fixed Overhead	Actual fixed overhead costs were $142,000.

   What was the companys variable overhead rate variance?

   	A.	$7,680 unfavorable
   	B.	$2,880 unfavorable
   	C.	$7,680 favorable
   	D.	$2,880 favorable

3. Which of the following statement is FALSE?

   	A.	A companys manufacturing cycle efficiency can be improved by minimizing queue time.
   	B.	Throughput time is the elapsed time from when a customer order is received to when the completed order is shipped.
   	C.	Process time is the only value-added activity in the four components of throughput time.
   	D.	Throughput time is a nonfinancial performance measure.

4. Lee Company's standards for the most recent period are given below. Fixed and variable manufacturing overhead costs are applied to products on the basis of machine hours. The denominator volume of machine hours is 9,000.

   	Standard Quantity or Hours per unit	Standard Price or Rate per unit	Standard Cost per unit
   Direct Materials	3 feet	$6 per foot	$18
   Direct Labor	1.5 direct labor hours	$10 per direct labor hour	$15
   Variable Overhead	2 machine hours	$12 per machine hour	$24
   Fixed Overhead	2 machine hours	$15 per machine hour	$30

   Actual costs for the most recent period, during which 5,000 units of output were actually produced and used 9,600 machine hours, are given below:

   Direct Materials	The firm purchased 16,000 feet at $6.30 per foot, but only used 14,500 feet in production.
   Direct Labor	The firm used 7,150 direct labor hours and paid $11 per direct labor hour.
   Variable Overhead	Actual variable overhead costs were $122,880.
   Fixed Overhead	Actual fixed overhead costs were $142,000.

   What was the companys labor efficiency variance?

   	A.	$3,850 unfavorable
   	B.	$3,500 unfavorable
   	C.	$3,850 favorable
   	D.	$3,500 favorable