13. The standards for direct materials in making a certain product are 20 pounds at $0.75 per pound. During the past period, 56,000 units of product were made and the material quantity variance was $30,000, favorable. The number of pounds of direct material used during the period amounted to:

    a. 1,080,000 b. 1,160,000 c. 1,120,000 d. 784,000 e. 1,453,333

14. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. If the labor efficiency variance is unfavorable, the variable overhead efficiency variance will be:

    1. Favorable

    2. Unfavorable

    3. Not enough information to determine

    4. It can be either favorable or unfavorable

    5. Zero

15. The Regal Blue company has a standard costing system. In June, the standard quantity of direct materials purchased was 35,000 pounds at a standard price of $4/lb. The material price variance was $7,000, unfavorable while the material quantity variance was $4,200, favorable. Therefore, the actual price per pound of the direct materials purchased in June was:

    a. $3.92 b. $4.32 c. $3.85 d. $4.08 e. $4.20

16. The general model for calculating a quantity variance is:

    1. Actual quantity of inputs used (Actual price Standard price).

    2. Standard price (Actual quantity of inputs used Standard quantity allowed for output).

    3. (Actual quantity of inputs used Actual price) (Standard quantity allowed for output Standard

       price).

    4. Actual price (Actual quantity of inputs used Standard quantity allowed for output).

    5. (Actual price x Standard Price) - (Actual Quantity x Standard Quantity)

17. At a break-even point of 800 units sold, White Corporations variable expenses are $8,000 and its fixed expenses are $4,000. What will the corporations net operating profit be at a volume of 801 units?

    a. $15 b. $10 c. $20 d. $25 e. $5

19. Garth Corporation sells a single product. If the selling price per unit and the variable expense per unit both increase by 10% and the fixed expenses do not change, then:

$CM/unit

1. Increases

2. No Change

3. No Change

4. Increases

5. Increases

CM Ratio Increases No Change Increases No Change Increases

Break-Even Units Decreases No Change No Change Decrease Increase

20. During a recent strike at PFL Industries management replaced striking, highly skilled, assembly line workers with un-trained office workers. Assembly line workers average rate is $18/hour while office workers average rate is $15/hour. What can you assume is the most likely effect on labor rate and efficiency variances during the first month of the strike?

1. Labor rate variance will be unfavorable, labor efficiency variance will be unaffected

2. Labor rate variance will be unaffected; labor efficiency variance will be unfavorable

3. Labor rate variance will be unfavorable; labor efficiency variance will be favorable

4. Labor rate variance will be favorable; labor efficiency variance will be unfavorable

5. Not enough information to determine the effect of labor rate and efficiency variances

21. The needed break-even units sold will decrease if there is an increase in only:

    1. unit sales volume

    2. total fixed expenses

    3. unit variable costs

    4. target operating profit

    5. selling price

22. A favorable rate variance indicates that:

    1. Actual hours exceed standard hours

    2. Standard rate exceeds actual rate

    3. Standard hours exceed actual hours

    4. Actual rate exceeds the standard rate

    5. Standard rate is equal to actual rate

23. Hudek Inc., a manufacturing Corporation, has provided the following data for the month of July. The balance in the Work in Process inventory account was $20,000 at the beginning of the month and $10,000 at the end of the month. During the month, the Corporation incurred direct materials cost of $50,000 and direct labor cost of $22,000. The actual manufacturing overhead cost incurred was $58,000. The manufacturing overhead cost applied to Work in Process was $56,000. The cost of goods manufactured for July was:

    a. $138,000 b. $140,000 c. $130,000 d. $128,000 e. $135,000