Question 395 Points

Dave's Chairs makes furniture and uses a standard cost system. The standard prices are included below.

Direct labor $28.00 per hour

Standard time per set of chairs 5.0 hrs.

Direct materials $12.00 per board foot

Standard quantity 18 bd.ft. per set

Variable factory overhead $2.00 per direct labor hour

Fixed factory overhead $19.00 per set

Calculate the Standard price for a set of Dave's chairs.

$385 per set

$360 per set

$229 per set

$420 per set

Question 385 Points

The budgeted factory overhead for your company was $32,000. However, actual overhead was $29,900. A possible explanation for this variance is

The light bill was up by $1,300 dollars above expected and property taxes were $3,400 less than budgeted. All else remained the same.

Direct Labor costs were lower than expected.

Direct Materials were lower than expected by $3,000

Production increased by enough to produce $3,000 extra in Sales.

Question 375 Points

A favorable direct labor variance could result from which of the following?

Using cheaper labor than usual

Less actual factory overhead was utilized than was allocated

Less labor hours than budgeted were able to complete the required projects

Both A and C are correct

A, B and C are all correct

Question 365 Points

Your medical practice actually received cash receipts much lower than expected. Stand alone explanation might be

you hired an additional nurse.

you had a change in credit poiicy.

the bank gave you a 3-month holiday on paying back your student loan.

your accountant changed the way you account for depreciation on your office building.

Question 355 Points

Sally, the accountant, has told you that you had a direct labor cost variance of + $22,000. Possible stand-alone explanations include

More direct labor hours were required than anticipated.

Less direct labor hours were required than anticipated.

The direct labor rate was budgeted at $ X per hour, but was actually $(X - 5.00) per hour

Direct Materials prices were lower than expected

Question 345 Points

Jiggly, Inc. makes a product called the "Wet Willy" that requires 2.5 standard pounds to produce. The standard price of the material is $3.50 per pound. If 15,000 units actually required 36,000 pounds of material, which were purchased at $4 per pound, what is the direct materials price variance and direct materials quantity variance in dollars, respectively.

$18,000 and ($5,250), respectively

$9,000 and ($5,625), respectively

$0.50 and $1,500, respectively

$12,000 and $5,225, respectively

Question 335 Points

The Total Direct Materials Variance is separated into

a price and a quantity variance.

a variable and fixed components

a price and quality variance

all the colors of the rainbow.

Question 325 Points

A budget that requires managers to estimate sales, production and other operating data as though operations had just started for the first time is called

a flexible budget

a fixed budget

a zero-based budget

a parenthetical budget

Question 315 Points

Normal standards are standards that can be attained with reasonable effort, but are seldom used by companies.

1. True
2. False

Question 305 Points

Chazbro Solutions uses flexible budgets based on the following data:

Sales commissions = 8% of sales

Advertising expense = 15% of sales

Office salaries (Selling & Admin) expense = $50,000 per month

Customer support expense = $20,000 per month + 30% of sales

Research and development expense = $75,000 per month

Total Selling and Administrative expenses will be ___________ if sales are $500,000 and will be _____________ if sales are $750,000, respectively.

$410,000 and $542,000, respectively

$ 360,000 and $492,000, respectively.

$390,000 and $510,000, respectively.

$365,000 and $480,000, respectively.

Question 295 Points

Smash Head Burgers pays 40% of its purchases on account in the month of the purchase and 60% in the month following the purchase. If purchases are budgeted to to be $60,000 in September and $48,000 in October, what is the total of the budgeted cash payments on account due in October?

$55,200

$52,800

$43,200

$64,800

Question 285 Points

Jolene's candles projects sales of 830,000 candles for January. Beginning inventory on January 1st is 35,000 units, and the required ending inventory on January 31 should be 60,000 units. What is the budgeted production in units for January?

855,000 units

805,000 units

925,000 units

835,000 units

Question 275 Points

Consider a manufacturing firm which sells its own products. The Sales Budget

begins by estimating the quantity of sales, often using last year's sales as a starting point.

should account for fixed, as well as variable, overhead expenses.

must account for the price of materials and labor.

should be piggy-backed onto the production budgest.

Question 265 Points

When the actual units produced is below 100% of normal capacity, this results in a favorable fixed factory overhead variance.

1. True
2. False

Question 255 Points

If budgeted goals are set too loosely, this generally produces low morale.

1. True
2. False

Question 245 Points

The major objectives of budgeting include the following except

Conform to GAAP.

Help establish specific goals for the future.

Allow the company to periodically compare actual results with goals.

To aid the company in meeting established goals

Question 235 Points

Depreciation expense can be a significant cash drain on a business.

1. True
2. False

Question 225 Points

Teragon anticipates a Unit Sales Price of $160, estimated Unit Variable Cost of $110, and Total Fixed Costs of $700,000 for the year. Calculate the break even sales in units if the company wants a Target Profit of $260,000.

19,200

17,400 units

14,000 units

8,800 units

Question 215 Points

Teragon anticipates a Unit Sales Price of $160. Estimated Unit Variable Cost of $110, and Total Fixed Costs of $700,000 for the year. Calculate the anticipated break even sales in units.

14,000 units

7,000 units

4,375 units

5,800 units