Air Soar Company produces model airplanes. During August, the company produced 1,000 planes. The actual labour hours were 10 hours per plane. The company's standard labour hours are 12 hours per plane. The standard labour rate is $15 per hour. At the end of August, the company found that it had a favourable labour rate variance of $7,500.

2.Refer to Air Soar Company. What was the actual cost per labour hour?

a.$14. 25b.$14. 50

c.$15. 25d.$15. 75

Evergreen Company was planning to produce 4,500,000 units for the current year. Actual production was 4,000,000 units. Each unit requires 0. 80 direct labour hours. Predetermined overhead rates are calculated using expected production, measured in direct labour hours. The budgeted variable overhead for the current year was $720,000. The actual variable overhead incurred was $714,000. What was the applied variable overhead for the year? a. $640,000 b. $680,000

c. $714,000 d. $800,000

Air Soar Company produces model airplanes. During August, the company produced 1,000 planes. The actual labour hours were 10 hours per plane. The company's standard labour hours are 12 hours per plane. The standard labour rate is $15 per hour. At the end of August, the company found that it had a favourable labour rate variance of $7,500.

5.Refer to Air Soar Company. What was the total labour variance?

a.$22,500 Fb.$25,000 F

c.$35,000 Fd.$37,500 F

Suppose that a company has the following accounts receivable collection pattern:

Paid in the month of sale: 30 percent

Paid in the month following sale: 70 percent

All sales are on credit. Suppose credit sales for March and April are $300,000 and $200,000, respectively. What would be the company's cash collection for April?

a. $60,000 b. $240,000

c. $270,000 d. $340,000

Peony Company

Peony Company has developed a static budget for the month of August, which is based on 9,000 direct labour hours. During the quarter, the actual activity was 10,000 direct labour hours. Data for August are summarized as follows:

Static Budget Actual Costs

(9,000 hours) (10,000 hours)

Direct labour $117,000 $120,000

Power (variable cost) 45,000 50,000

Salary of plant supervisor5,0005,000

Total$167,000 $175,000

8. Refer to Peony Company. What can be concluded when comparing the static budget to the actual costs? a. The salary of the plant supervisor is fixed.

b. Immediate action is needed to reduce costs.

c. The plant manager was clearly not efficient.

d. The manager spent more than should have been spent.

BCB Company budgeted production of 250,000 units for June, 240,000 units for July, and 350,000 units for August. Each unit requires 0. 35 direct labour hours. How many direct labour hours are budgeted for August? a. 5,000 b. 50,000

c. 52,500 d. 122,500

10.During August, 40,000 units were produced. The standard quantity of material allowed per unit was 5 kg at a standard cost of $2. 50 per kilogram. Suppose the company had a favourable usage variance of $25,000. What would have been the actual quantity of materials used?

a.95,000 kgb.105,000 kg

c.190,000 kgd.210,000 kg