Question :
11. Holt Products manufactures desktop computers. Management has determined that each : 1291603
11. Holt Products manufactures desktop computers. Management has determined that each computer has a standard labor cost of $75.00 when 5 hours of labor at a cost of $15.00 per hour are used. The static budget for the month of April showed an estimated production of 4,200 computers. During April, 4,500 computers were actually produced. The actual direct labor cost for each computer was $85.80 when 5.5 hours of labor at a cost of $15.60 per hour was used. What should be the total direct labor cost according to Holt’s flexible budget for April? A. $360,360B. $315,000C. $337,500D. $386,100
12. Summerlin Law Offices applies overhead to clients based on direct labor hours. The office manager determined that overhead will be applied at a rate of $25 per direct labor hour. The static budget for the month of November showed an estimated 2,500 direct labor hours would be incurred. During November, 2,800 direct labor hours were actually incurred and actual overhead costs were $58,800. What should be the total overhead cost according to the firm’s flexible budget for November? A. $70,000B. $58,800C. $62,500D. $52,500
13. The type of budget that consider standard costs for the actual volume of production is a: A. standard budget.B. static budget.C. flexible budget.D. fixed budget.
14. 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:
Sales revenue (500 units)
$5,000
Variable costs:
Direct materials
1,000
Direct labor
1,000
Overhead
375
Fixed costs
200
Net operating income
$2,425
During August, Trina actually produced and sold 400 leis. What should be Trina’s net operating income in August based on a flexible budget? A. $1,940B. $1,825C. $1,425D. $1,900
15. Rogers Rods & Reels Ltd.Rogers Rods & Reels Ltd. manufactures and sells various types of fishing equipment. At the end of 2011, Rogers had estimated for the production and sale of 15,000 bass fishing rods. Each rod has a standard calling for 1.5 pounds of direct material at a standard rate of $8.00 per pound and 15 minutes of direct labor time at a standard rate of $.18 per minute. During 2012, Rogers actually produced and sold 16,000 rods. These 16,000 rods had an actual direct materials cost of $179,200 (25,600 pounds at $7.00 per pound) and an actual direct labor cost of $44,800 (224,000 minutes at $.20 per minute). Each rod sells for $50. Refer to the Rogers Rods & Reels Ltd. information above. What is Rogers’ net operating income based on a flexible budget? A. $579,500B. $564,800C. $576,000D. $590,000
16. Rogers Rods & Reels Ltd.Rogers Rods & Reels Ltd. manufactures and sells various types of fishing equipment. At the end of 2011, Rogers had estimated for the production and sale of 15,000 bass fishing rods. Each rod has a standard calling for 1.5 pounds of direct material at a standard rate of $8.00 per pound and 15 minutes of direct labor time at a standard rate of $.18 per minute. During 2012, Rogers actually produced and sold 16,000 rods. These 16,000 rods had an actual direct materials cost of $179,200 (25,600 pounds at $7.00 per pound) and an actual direct labor cost of $44,800 (224,000 minutes at $.20 per minute). Each rod sells for $50. Refer to the Rogers Rods & Reels Ltd. information above. What is Rogers’ flexible budget variance? A. $11,200 FB. $11,200 UC. $ 3,500 FD. $ 3,500 U
17. Differences in sales revenue between the flexible budget and actual results can be attributed to: A. the sales volume variance.B. the flexible budget variance.C. the sales price variance.D. the variable overhead efficiency variance.
18. Martin Corporation had an unfavorable sales price variance of $4,800 for 2012. Martin had budgeted for sales of 10,000 units at a sales price of $5 each. Actual sales in 2012 totaled 12,000 units. What was the actual sales price per unit? A. $5.40B. $4.60C. $4.52D. $5.48
19. The difference between operating income on a flexible budget and actual operating income is called the: A. sales price variance.B. efficiency variance.C. standard variance.D. flexible budget variance.
20. The flexible budget variance: A. directs management’s attention to specific reasons for why budgeted income differed from actual operating income.B. compares the static budget to the flexible budget.C. removes any differences between budgeted operating income and actual operating income that are attributable to differences in budgeted and actual volume.D. is most often used to determine whether or not there is sufficient demand for a company’s product.
