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QUESTION 1 Trina makes handmade leis in Hawaii which she sells to local tourists. She anticipates August to be a busy month with the sale of 500 leis. She has prepared the following static budget for August: $5000 Sales revenue (500 units) Variable costs: Direct materials Direct labour Overhead Fixed costs Net income 1000 1000 475 200 $2425 During August, Trina actually produced and sold 400 leis. What should be Trina's net income in August based on a flexible budget? O $2325 O $1825 O $1325 O $1820 QUESTION 2 At the end f January, Supreme Catering prepared the following budget for the upcoming mont February estimating that they would 3000 people Sales revenue per guest $20 Variable costs per guest $12 Total fixed costs $5000 During February, there were 2700 guests actually served. Actual costs incurred were $27 000 for variable costs and $6500 for fixed costs. Each guest was charged $20. Supreme Catering's flexible budget variance for February would show a variance of: O $3900 F 0 510 500 U O $10 500 F $3900 U 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: O $14 000 F O $1750 F 0 s8750 U 0 $3500 U QUESTION 4 Mystic Falls Inc. bottles and sells a popular soft drink. In 2009, the company had expected to sell 1 000 000 bottles but actually bottled and sold 950 000 bottles. The standard direct materials cost for each bottle is $0.40 comprised of 10 grams at a cost of $0.04 per gram. During 2009, 10 000 000 grams of material were purchased out of which 9 200 000 grams were used at a cost of $.05 per gram. The direct materials usage variance for 2009 was: O $40 000 F 0$120000 0 540 000 0 O $12000 F