X Corporation pays its salesperson $3,000 fixed salary per month plus an 8 percent sales commission on all sales the salesperson generates. The fixed salary portion is paid for in the month earned, but the sales commission portion is paid for in the month following the sales (because sales for a month are not known until the end of that month). The salesperson generated $60,000 of sales in January, and $40,000 of sales in February, and $50,000 of sales in March. The compensation expense recognized on the February income statement would be _____ while the cash paid for compensation expense in February would be _____. A. $6,200; $7,800 B. $7,800; $7,000 C. $7,000; $6,200 D. $7,800; $6,200 E. $6,200; $7,000 If the actual labor rate exceeds the standard labor rate and the actual labor hours exceed the number of hours allowed, the labor rate variance and labor efficiency variance will be: A. Labor rate variance favorable and labor efficiency variance unfavorable B. Labor rate variance unfavorable and labor efficiency variance favorable C. Labor rate variance unfavorable and labor efficiency variance unfavorable D. Labor rate variance favorable and labor efficiency variance favorable Which of the following factors could cause an unfavorable labor rate variance? A. using more unskilled workers B. using more highly skilled workers C. using higher quality materials D. using low-efficiency workers An unfavorable variable overhead spending variance may be caused by: A. the payment of lower prices for variable overhead items B. an increase in electricity costs per kilowatt hour charged by the utilities company C. price increases on direct materials D. the use of excessive quantities of variable overhead items T Company expects to incur the following per unit costs for 1,000 units of production: Direct materials of 4 pounds per unit at $3 per pound AND direct labor of hour at $24 per hour AND variable overhead at 75 percent of direct labor costs AND fixed overhead of $3,000. What is the total amount of overhead to include in the overhead budget? A. $13,500 B. $4,500 C. $3,000 D. $11,250 E. $7,500 V Company expected to sell 8,000 units at a price of $6 each. Instead, it sold 7,000 units at a price of $6.50 each. It hopes to sell even more next year, possibly 9,000 units. How much was the current periods sales volume variance? A. $6,500 B. $1,000 C. $6,000 D. $2,500 E. $500 Z Company is planning production of 200,000 units of Product X for June. One unit of X requires 2 pounds of raw material. The projected beginning inventory for June is 2,000 pounds. The projected ending inventory for June is 10,000 pounds. How many pounds of material should be purchased during June? A. 392,000 B. 192,000 C. 208,000 D. 408,000 E. 416,000 H Company has the following expected pattern of collections on credit sales: 70 percent collected in the month of sale, 15 percent in the month after the month of sale, and 14 percent in the second month after the month of sale. The remaining 1 percent is never collected. April credit sales were $140,000. May credit sales were $160,000. Expected credit sales for June are $150,000. How much cash will H Company expect to collect in June? A. $129,000 B. $152,520 C. $148,400 D. $127,400 E. $148,600