For the accounting period just ended, Abway Company's actual overhead costs equalled estimated overhead. Actual direct labour hours exceeded estimated direct labour hours used to calculate the predetermined overhead rate. If overhead is applied using the predetermined overhead rate, then overhead would be

a.

Overapplied

b.

Underapplied

c.

$-0-

d.

Overhead cannot be determined from the information given.

2

During April, 80,000 units of product were produced. The standard quantity of material allowed per unit was two pounds at a standard cost of $5 per pound. If there was a favorable materials usage variance of $40,000 for April, the actual quantity of materials used must have been

a.

168,000 pounds

b.

152,000 pounds

c.

84,000 pounds

d.

76,000 pounds

e.

Some other answer not listed here

3

Last year JR Company broke even. The company sells one product with a selling price of $100 and a variable cost per unit of $75. This year the company would like to earn a before-tax profit of $60,000. How many more units must the company sell this year than it sold last year?

a.

2,640

b.

2,400

c.

800

d.

600

e.

Cannot determine with information provided