Question 35) Cavalaris Products uses a standard cost system. Overhead costs are allocated based on direct labor hours. In the first quarter, Cavalaris had an unfavorable cost variance for variable overhead costs. Which of the following scenarios is a reasonable explanation for this variance?

A) The actual mumber of direct labor hours was lower than the buderted hours

B)The actual variable overhead costs were higher than the budgrted costs

C)The actual variable overhead costs were lower than the budgntnd costs

D)The actual number of darect labor bours was bigber than the bodgeted hours

Question 39) Guru Co. produces two products. Both products pass through a firing process that is operating at full capacity and is a production bottleneck. Product A requires 2 hours of processing and has a contribution margin per unit of $60. Product B requires 1 hour of processing and has a contribution margin of $40. Which of the following provides the most accurate assessment of the situation assuming unlimited demand for each product?

A)Production of Product B rather than Product A will generate the maximum profitability for Guru

B)Production of Product A rather than Product B will generate the maximum profitability for Guru

c)Raising the selling price of Product B by $20 will cause management to be indifferent between producing Product A or Product B

D)Raising the selling price of Product A by $10 will cause management to be indifferent betuween producing Product A or Product B

Question 40 )Which of the following statements would be a correct analysis of the flexible budget yariance for variable costs?

A)Decrease in sales price per unit

B)Increase in variable cost per unit

c)Increase in sales volume

D)Increase in sales price per unit