Below is budgeted production and sales information for Flushing Company for the month of December:

	Product XXX	Product ZZZ
Estimated beginning inventory	30,000 units	18,000 units
Desired ending inventory	34,000 units	17,000 units
Region I, anticipated sales	320,000 units	260,000 units
Region II, anticipated sales	180,000 units	140,000 units

The unit selling price for product XXX is $6 and for product ZZZ is $15. Budgeted production for product ZZZ during the month is:

A) 423,000 units B) 390,000 units C) 403,000 units D) 399,000 units

10.

The three categories of manufacturing costs comprising the cost of work in process are direct labor, direct materials, and:

A) factory overhead B) direct expenses C) indirect expenses D) sales salaries expense

11.

The St. Augustine Corporation originally budgeted for $360,000 of fixed overhead. Production was budgeted to be 12,000 units. The standard hours for production were 5 hours per unit. The variable overhead rate was $3 per hour. Actual fixed overhead was $360,000 and actual variable overhead was $170,000. Actual production was 11,700 units. Compute the factory overhead volume variance.

A) $9,000F B) $5,500U C) $5,500F D) $9,000U

12.

Which of the following is an example of a cost that varies in total as the number of units produced changes?

A) Property taxes on factory buildings B) Straight-line depreciation on factory equipment C) Direct materials cost D) Salary of a production supervisor

13.

A. Both absorption and variable costing

B. Variable costing only

C. Absorption costing only

A B CMay be used in a manufacturing company.

A B CIncludes gross profit on the income statement.

A B CGenerally provides the most useful report for setting long-term prices.

A B CRequired by generally accepted accounting principles.

A B COperating income is impacted by changes in inventory level.

A B CTreats fixed selling cost as a period cost.

A B CGenerally provides the most useful report for controlling costs.

A B CTreats fixed manufacturing cost as a period cost.

14.

Cost behavior refers to the manner in which:

A) a cost changes as the related activity changes B) a cost is allocated to products C) a cost is estimated D) a cost is used in setting selling prices

15.

The St. Augustine Corporation originally budgeted for $360,000 of fixed overhead. Production was budgeted to be 12,000 units. The standard hours for production were 5 hours per unit. The variable overhead rate was $3 per hour. Actual fixed overhead was $360,000 and actual variable overhead was $170,000. Actual production was 11,700 units. Compute the factory overhead controllable variance.

A) $9,000U B) $5,500F C) $5,500U D) $9,000F

16.

The production budgets are used to prepare which of the following budgets?

A) Operating expenses B) Direct materials purchases, direct labor cost, factory overhead cost C) Sales in dollars D) Sales in units

17.

Assuming that the Morocco Desk Co. purchases 8,000 feet of lumber at $6.00 per foot and the standard price for direct materials is $5.00, the entry to record the purchase and unfavorable direct materials price variance is:

A) Work in Process 48,000 Direct Materials Price Variance 8,000 Accounts Payable 40,000 B) Direct Materials 48,000 Direct Materials Price Variance 8,000 Accounts Payable 40,000 C) Direct Materials 40,000 Accounts Payable 40,000 D) Direct Materials 40,000 Direct Materials Price Variance 8,000 Accounts Payable 48,000

18.

Below is budgeted production and sales information for Flushing Company for the month of December:

	Product XXX	Product ZZZ
Estimated beginning inventory	30,000 units	18,000 units
Desired ending inventory	34,000 units	17,000 units
Region I, anticipated sales	320,000 units	260,000 units
Region II, anticipated sales	180,000 units	140,000 units

The unit selling price for product XXX is $6 and for product ZZZ is $15. Budgeted sales for the month are:

A) $9,000,000 B) $2,040,000 C) $4,680,000 D) $6,692,000

19.

Which of the following budgets allow for adjustments in activity levels?

A) Static Budget B) Continuous Budget C) Zero-Based Budget D) Flexible Budget

20.

The following production data were taken from the records of the Finishing Department for June:

Inventory in process, 6-1,
25% completed	1,500 units
Transferred to finished goods
during June	5,000 units
Equivalent units of production
during June	5,200 units

Determine the number of equivalent units of production in the June 30 Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories. Assume the completion percentage of 25% applies to both direct materials and conversion costs.

A) 200 units B) 1,000 units C) 300 units D) 575 units

21.

The total manufacturing cost variance is

A) the flexible budget variance plus the time variance B) none of the above. C) the difference between actual costs and standard costs for units produced. D) the difference between planned costs and standard costs for units produced

22.

At the end of the fiscal year, variances from standard costs are usually transferred to the:

A) cost of goods sold account B) direct labor account C) factory overhead account D) direct materials account

23.

For January, sales revenue is $700,000; sales commissions are 5% of sales; the sales manager's salary is $96,000; advertising expenses are $90,000; shipping expenses total 2% of sales; and miscellaneous selling expenses are $2,100 plus 1/2 of 1% of sales. Total selling expenses for the month of January are:

A) $183,750 B) $182,100 C) $240,600 D) $157,100

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