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Scoring 0. 1. 1. Answers 0. How much a product costs is described as the actual cost 1. Accounting systems that use standards for each

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Scoring 0. 1. 1. Answers 0. How much a product costs is described as the actual cost 1. Accounting systems that use standards for each element of manufacturing Standard Cost cost entering into the finished product are called 2. Standards that allow for no idle time, no machine breakdowns, and no Ideal Standards materials spoilage are called 3. When actual costs are compared with standard costs, only variances are Variance reported for cost control. This reporting philosophy is known as the ....... 4. The difference between the actual cost and the flexible budget at the actual Operating Income volume is called a cost ... Variance 5. The department that controls the direct materials price per square yard is the Direct Materials control 2. 2. 3. . 1. 5. 5 6. 7. . 8. 6. Standards that allow for reasonable production difficulties and mistakes are Attainable Standards referred to as 7. The difference between the actual hours worked and the standard hours at Fixed overhead Variance actual production, multiplied by the standard rate per hour, results in the.... 8. The difference between the budgeted fixed overhead at 100% of normal Volume Variance capacity and the standard fixed overhead for actual production achieved is called the 9. The variance that measures the efficiency of using variable overhead resources is the 10. The factory overhead cost variance can be verified for each variable factory overhead cost and fixed factory overhead cost element in the 11-13. At the end of the fiscal year, minor standard cost varlances are usually transferred to the cost of goods sold account. Significant variances are allocated to: 11. RES . 9. 10. . TES 11. 12. 12. . 13. 13. . 14. 15. 14. Costs that are influenced by profit center managers are 15. Standards that can be attained with reasonable effort are called. 16. Depreciation expense on existing equipment would be considered a (controllable, noncontrollable) cost...... 17. The difference between the actual labor costs per hour and the standard labor cost per hour at actual production, multiplied by the standard hours for the units produced, results in the 16. 17. EST 3 (Continued) For Answers Scoring 18. Selected actual and standard cost data for direct labor cost are as follows: Actual direct labor hours 65,000 hours Actual direct labor hourly wage $10.40 Units of finished product manufactured 18,000 units Standard direct labor hours per unit of finished product 4.5 hours Direct labor rate variance-unfavorable $8,100 Assuming that there was no inventory of work in process at either the begin- ning or the end of the period, the standard direct labor cost per hour is (rounded to the nearest cent) 9-21. Monthly purchases on account are expected to be $620,000 in June and $710,000 in July. Sixty percent of the liability incurred is expected to be paid within the month of purchase and the balance is expected to be paid in the following month. The amount owed at May 31 is $114,000. 19. The estimated amount of payments during June is 20. The estimated amount of payments during July is 21. The estimated amount owed at July 31 is 18. $ $ $ 19. 20. 18 21. $ $ 20. 21. 22. 23. 20. The estimated amount of payments during July is 21. The estimated amount owed at July 31 is 22. A report comparing actual results with the budgeted figures is called a 23. When standards are recorded in the accounts, work in process is debited for (actual or standard) costs 24. If 7,000 units of Direct Material D are on hand at the beginning of the year, 72,000 units are expected to be required for production, an ending Inventory of 4,000 units is desired, and the unit price is estimated at $2.60, the amount to be included in the direct materials purchases budget for this material is 25. If 12,500 units of finished goods are on hand at the beginning of the year, 246,000 units are expected to be sold during the year, and an ending inventory of 10,500 units is desired, the amount of production required during the year is 26. The difference between the budgeted fixed overhead at 100% of normal capacity and the standard fixed overhead for actual production is called the welahal . 24. 25. 26. INSTRUCTIONS: Solve the following problems and record the answers in the Answers column. Answers For Scoring $20 per unit . 0. 1. 2. 3. 0. If total fixed costs are $300,000, what is the unit fixed cost if production is 15,000 units? 1. If the profit margin for Division N is 8.5% and the investment turnover is 1.4, what is the rate of return on investment? 2. If Division H has a rate of return on investment of 35% and the investment turnover is 2.2, what is the profit margin carried to the nearest tenth of a percent? 3. If Division L has a rate of return on investment of 40% and a profit margin of 22%, what is the investment turnover, carried to the nearest tenth? 4. Division P has sales of $1,000,000, cost of merchandise sold of $500,000, operating expenses of $200,000, and invested assets of $2,000,000. What is the rate of return on investment? 5-6. Ally Company has two divisions, G and H. Invested assets and condensed income statement data for each division for the past year ended December 31 are as follows: Division G Division H Sales. $1,350,000 $3,120,000 Cost of goods sold 450,000 1,950,000 Operating expenses 765,000 900,000 Invested assets... 1,800,000 2,200,000 5. If management desires a minimum rate of return of 5%, determine the residual income for Division H 6. Determine the return on investment for Division G . 5. 6. Standard costs and actual costs for direct materials, direct labor, and factory overhead for the manufacture of 2,000 units of product were as follows: Standard Costs Actual Costs Direct materials 4,000 pounds at $10.60 a pound 4,100 pounds at $11 a pound Direct labor. 3,100 direct labor hours at $9.45 an hour 2,900 direct labor hours at $10 an hour Factory overhead. Normal capacity, 4,000 machine hours Hourly rates: Variable cost, $3 per machine hour Total variable cost, $6,350 Fixed cost, $2 per machine hour Total fixed cost, $6,200 NOTE: One machine hour is required for each unit produced. Materials used were purchased during this period. INSTRUCTIONS: Indicate the amount and nature (favorable or unfavorable) of each of the following variances. VARIANCE Answers For Scoring For Scoring 1-2. Direct materials quantity variance $ C F U 1. 2. 2 3-4. Direct materials price variance $ . F U 3. 4. 5-6. Direct labor time variance $ 5. F U . 6. 7-8. Direct labor rate variance $ F U 8 8. 7. . 9-10. Factory overhead volume variance $ 9. F U 10. C G F 11-12. Factory overhead controllable variance GA 11. . 12

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