Hoppy Corporation compares a monthly flexible budget based on actual operating results to a static budget prepared at the beginning of the month. When the actual level of activity is higher than expected, which of the following would be true?

	Variable costs would show favorable variances.
	Variable costs would show unfavorable variances.

	Fixed costs would show favorable variances
	Fixed costs would show unfavorable variances.

Papenfuss Family Inn is a bed and breakfast establishment in a converted 100-year-old mansion. The Inn's guests appreciate its gourmet breakfasts and individually decorated rooms. The Inn's overhead budget for the most recent month appears below:

Activity level........................ 86 guests

Variable overhead costs:

Supplies...................... $86

Laundry...................... $860.00

Fixed overhead costs:

Utilities........................ $340.00

Salaries and wages.... $4,790.00

Depreciation............... $1,600.00

The Inn's variable overhead costs are driven by the number of guests. What would be the total budgeted overhead cost for a month if the activity level is 76 guests?

	$52,848.40
	$7,566.00

	$8,274.40
	$7,373.40

None of the above

Paradiso Medical Clinic measures its activity in terms of patient-visits. Last month, the budgeted level of activity was 1,060 patient-visits and the actual level of activity was 1,050 patient-visits. The cost formula for administrative expenses is $3.00 per patient-visit plus $17,000 per month. The actual administrative expense was $19,080. In the clinic's flexible budget performance report for last month, the spending variance for administrative expenses was:

	$850 F
	$220 U

	$30 F
	$1,070 F

None of the above

Biggs Enterprise's flexible budget cost formula for indirect materials, a variable cost, is $0.60 per unit of output. If the company's performance report for last month shows a $500 unfavorable spending variance for indirect materials and if 9,000 units of output were produced last month, then the actual costs incurred for indirect materials for the month must have been:

	$5,900
	$5,400

	$6,000
	$5,200

6. During a recent lengthy strike at Takata Manufacturing Company, management replaced striking assembly line workers with inexperienced office workers who take extra time to produce the product. The assembly line workers had been paid $18 per hour while the office workers are only paid $25 per hour. What is the most likely effect on the labor variances in the first month of this strike? Labor rate variance Labor efficiency variance

A) Unfavorable Unfavorable

B) No effect Unfavorable

C) Unfavorable Favorable

D) Favorable Unfavorable

	Option A
	Option B

	Option C
	Option D

Dreary Credit Agency uses a standard cost system for the processing of its credit applications. The labor standard at Dreary is 10 applications per 8 hour day at a standard cost of $15 per hour. During the last pay period, Dreary's credit agents actually worked 2,100 hours and processed 2,500 applications. The total labor cost for the agents during this period was $29,184. What was Dreary's labor efficiency variance for this last pay period?

	$384 Unfavorable
	$816 Favorable

	$1,200 Favorable
	$1,500 Unfavorable

The following labor standards have been established for a particular product:

Standard labor-hours per unit of output.... 8 hours

Standard labor rate................................... $12.10 per hour The following data pertain to operations concerning the product for the last month:

Actual hours worked................ 6,100 hours

Actual total labor cost............. $71,370

Actual output.......................... 900 units What is the labor efficiency variance for the month?

	$7,865 Favorable
	$19,017 Unfavorable

	$6,029 Favorable
	$13,310 Favorable

Nomad Corporation makes a product with the following standard costs:

Direct materials: 3.5 pounds at $3.00 per pound

Direct labor: .8 hours at $19.00 per hour

Variable overhead: .8 hours at $8.00 per hour

9. In July the company produced 3,300 units using 12,240 pounds of the direct material and 2,760 direct labor-hours. During the month, the company purchased 13,000 pounds of the direct material at a cost of $35,100. The actual direct labor cost was $51,612 and the actual variable overhead cost was $20,148. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead price variance for July is:

	$1,932 Unfavorable
	$1,932 Favorable

	$1,848 Unfavorable
	$1,848 Favorable

Given the following data: Average operating assets............ $250,000 Total liabilities.............................. $100,000 Sales........................................... $600,000 Contribution margin.................... $150,000 Net operating income................. $ 40,000 Return on investment (ROI) would be:

	5%
	12%

	25%
	16%

. Emerich Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below: Move time................ 9.0 hours Wait time.................. 23.8 hours Queue time.............. 6.3 hours Process time............ 1.1 hours Inspection time........ 0.4 hours The manufacturing cycle efficiency (MCE) was closest to:

	0.182
	0.093

	0.065
	0.498