stion 2question 1 ) Refer to the Karla Inc. information below.

Karla Inc. manufactures tentsunder various brand names. The company sells most of itshammocksin the second quarter of each year. Their production budget for the second quarter shows the following number of hammocks needs to be produced:

April 7000 units

May 15 000 units

June 25 000 units

Each unit requires 25 feet of cotton rope cord which costs $0.60 per foot. The company has determined that it needs 20 per cent of next month's raw material needs on hand at the end of each month.

In addition, each hammock requires 55 minutes of direct labour for assembly and inspection at a cost of $0.45 per minute. The company currently applies manufacturing overhead to production at the rate of $9.50 per direct labour hour.

The total cost of direct labour and manufacturing overhead for the month of May is:

1. $201 775
2. $501 775
3. $501 875
4. $635 201

Question2)

Refer to the Carteret Inc. information below.

Carteret Inc. manufactures hammocks under various brand names. The company sells most of its hammocks in the second quarter of each year. Their production budget for the second quarter shows the following number of hammocks needs to be produced:

April 6000 units

May 10 000 units

June 15 000 units

Each unit requires 30 feet of cotton rope cord which costs $0.50 per foot. The company has determined that it needs 20 per cent of next month's raw material needs on hand at the end of each month.

In addition, each hammock requires 45 minutes of direct labour for assembly and inspection at a cost of $0.25 per minute. The company currently applies manufacturing overhead to production at the rate of $8 per direct labour hour.

The total cost of direct labour and manufacturing overhead for the month of May is:

a.$172 500

b.$82 500

c.$168 750

d.$192 500

Question 3 )

Meow Products Ltd. in the US produces and sells scratching posts for cats. In the current year, the company had expected to sell 12 000 posts but actually produced and sold 10 000 posts.

The following information is available regarding the standard cost to produce a single post:

Direct materials: 3 feet @ 1.75 per foot

Direct labour: 15 minutes @ $0.30 per minute

In the current year, 38 000 feet of material were purchased out of which 35 000 feet were used at a cost of $1.55 per foot, and 160 000 direct labour minutes were incurred at a cost of $0.32 per minute.

The company's direct materials usage variance for the current year was:

1. $8750 U
2. $3500 U
3. $1750 F
4. $14 000 F