29 Jun uestion Questions 1–20: Select the one best answer to e
uestion
Questions 1–20: Select the one best answer to each question.
1. The purpose of a flexible budget is to
A. allow management some latitude in meeting goals.
B. eliminate cyclical fluctuations in production reports by ignoring variable costs.
C. compare actual and budgeted results at virtually every level of production.
D. reduce the total time in preparing the annual budget.
2. Woodside Company manufactures tables with vinyl tops. The standard material cost for the vinyl used per Style R table is $7.20 based on 8 square feet of vinyl at a cost of $.90 per square foot. A production run of 1,000 tables in January resulted in usage of 8,300 square feet of vinyl at a cost of $.85 per square foot, a total cost of $7,055. The quantity variance resulting from this production run was
A. $255 favorable. C. $270 favorable.
B. $255 unfavorable. D. $270 unfavorable.
3. RHO Company, which began its operations on January 1, produces a single product that sells for $10.25 per unit. Standard capacity is 80,000 units per year. This year, 80,000 units were produced and 70,000 units were sold.
Manufacturing costs and selling and administrative expenses follow:
Fixed costs Variable costs
Raw materials — $2.00 per unit produced
Direct labor — $1.50 per unit produced
Factory overhead $120,000 1.00 per unit produced
Selling and administrative 80,000 0.50 per unit sold
What is the standard cost of manufacturing a unit of product?
A. $4.50 C. $5.50
B. $5.00 D. $6.00
4. Which one of the following items is ignored when establishing an ideal standard?
A. Cost of materials C. Vacation time
B. Cost of electricity D. Sick time
5. Belo, Inc. uses a standard cost system. Overhead cost information for Product CO for the month of October follows:
Total actual overhead incurred $14,750
Fixed overhead budgeted $1,800
Total standard overhead rate per direct labor hour $4.25
Variable overhead rate per direct labor hour $3.75
Standard hours allowed for actual production 3,400
What is the overall (net) overhead variance?
A. $100 favorable C. $300 favorable
B. $100 unfavorable D. $300 unfavorable
6. What type of direct material variances for price and quantity will arise if the actual number of pounds of materials used exceeds standard pounds allowed but actual cost is less than standard cost?
Quantity Price
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