Question 1:

Rhodium Company is planning to produce 5,000,000 speakers for the coming year. Actual production was 3,000,000 speakers. Each speaker requires 0.50 direct labor hours per unit. Predetermined overhead rates are calculated using expected production, measured in direct labor hours. The budgeted variable overhead for the coming year is $500,000. The actual variable overhead incurred was $650,000. The applied variable overhead for the year is:

	a.	$450,000.
	b.	$725,000.
	c.	$300,000.
	d.	$740,000.
	e.	None of these

Question 2:

Highland Company's standard cost is $250,000. The allowable deviation is 10%. Its actual costs for six months are

January	$235,000
February	220,000
March	245,000
April	265,000
May	270,000
June	280,000

The actual cost which is lower than the lower control limit is

	a.	$265,000
	b.	$280,000
	c.	$235,000
	d.	$220,000