The Mother's Day Candy Factory used budgeted activity as its denomina direct materials usage in pounds. The production cost variances for 2018 are as follows tor level for 2018. The company measures its Direct Materials Price Variance Direct Materials Quantity Variance Direct Labor Rate Variance Direct Labor Efficiency Variance $7,000 F $9,000 u Variable Overhead Spending Variance $8,000 U Variable Overhead Efficiency Variance $11,000 U Fixed Overhead Budget Variance $4,000F Fixed Overhead Volume Variance $6,000 u $10,000 U $13,000 F For the next eight questions, please use the following answer key If the Statement is True- You should answer A If the Statement is False-You should answer B If it cannot be determined from the information given whether the statement is true or false- You should answer C Mother's Day Candy paid more than the standard rate per hour for direct labor The company used less than the standard direct materials allowed to produce the actual candy. Actual production was more than budgeted production 4 Mother's Day Candy paid more than the standard price for direct materials purchased 6. Mother's Day Candy used less than the standard hours allowed for direct labor to produce the actual units 9. Refer back to the production variance report for Mother's Day Candy. Compute the underapplied or overapplied Mother's Day Candy may have used direct labor hours to apply overhead to the actual candy produced The actual fixed overhead for 2018 was greater than the budgeted fixed overhead for 2018 The company used more pounds of direct material than it purchased overhead for the company a. $25,000 underapplied b. $21,000 underapplied c. $13,000 underapplied d. $2,000 underapplied ntly making part MOM in one of the departments in our factory. The total cost charged to Our company is curre each part MOM is $10.40. This consists of $1.25 for direct materials, $2.80 for direct labors overhead, and $3.35 for fixed overhead. The figures are based on production needs of 40,000 uni The fixed overhead consists of $1.35 in depreciation on special equipment used to nm equipment has no resale value), and $2.00 for a supervisor' just part MOM and would be terminated if we decide to purchase part MOM from an outside supplier rather than making it ourselves. Assuming that the facilities would be idle if we purchase part MOM from an outside supplier, what is the relevant cost of making one unit of part MOM internally? 10. s salary. This supervisor oversees the production of $7.05 $8.40 b. c. $9.05 d. $10.40 Refer back to the previous question and part MOM. Now assume that we would NOT fire the supervisor if we purchase part MOM from an outside supplier. The person would remain with the company with no change in salary. Would you be more likely or less likely to purchase part MOM from an outside supplier? a) More likely to purchase th part 11. Less likely to purchase the part b)
