Question
Assume that a company uses a standard cost system and applies overhead to production based on direct labor-hours. It provided the following Information for its
Assume that a company uses a standard cost system and applies overhead to production based on direct labor-hours. It provided the following Information for its most recent year: Actual fixed overhead cost for the year Budgeted direct labor-hours Actual direct labor-hours. Standard direct labor-hours allowed for the actual output Fixed overhead budget variance. What is the total budgeted fixed cost for the year? $276,000 60,000 56,000 58,000 $ 24,000 F Multiple Choice $300,000 $252,000 What is the total budgeted fixed cost for the year? Multiple Choice $300,000 $252,000 $314,000 $290,000 Ouzts Corporation is considering Alternative A and Alternative B. Costs associated with the alternatives are listed below: Alternative A Alternative B Materials costs. $ 46,000 $ 63,000 Processing costs $ 42,400 $ 42,400 Equipment rental $ 14,800 $ 14,800 Occupancy costs $ 16,900 $ 25,000 What is the financial advantage (disadvantage) of Alternative B over Alternative A? Multiple Choice $(25,100) $145,200 $(132,650) Equipment rental Occupancy costs $ 14,800 $ 14,800 $ 16,900 $ 25,000 What is the financial advantage (disadvantage) of Alternative B over Alternative A? Multiple Choice $(25,100) $145,200 $(132,650) $120,100 Assume a company is considering adding a new product line with the following estimated cost and revenue data: Annual sales 6,000 units Selling price per unit $ 180 Variable manufacturing costs per unit Variable selling costs per unit $ 140 $ 15 Incremental fixed manufacturing costs $65,000 per year $40,000 per year $45,000 per year Incremental fixed selling costs Allocated common fixed administrative costs If the new product line is added, the company expects that it will increase the sales of complementary products, thereby generating $32,750 incremental contribution margin from those products. What is the financial advantage (disadvantage) of adding the new product line? Multiple Choice $77,750 $32,750 If the new product line is added, the company expects that it will increase the sales of complementary products, thereby generating $32,750 in Incremental contribution margin from those products. What is the financial advantage (disadvantage) of adding the new product line? Multiple Choice $77,750 $32,750 $117,750 $45,000
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