Question : 21. Dorffman Inc. has a $18,000 favorable flexible budget variance for : 1291604

21. Dorffman Inc. has a $18,000 favorable flexible budget variance for May. Which of the following statements is true, if May’s actual net operating income was $72,000? 
A. Dorffman’s static budget must have showed a net operating income of $54,000.
B. Dorffman’s static budget must have showed a net operating income of $90,000.
C. Dorffman’s flexible budget must have showed a net operating income of $54,000.
D. Dorffman’s flexible budget must have showed a net operating income of $90,000.

22. Prevo Products Inc. has a $15,000 unfavorable flexible budget variance for July. Which of the following statements is true, if July’s actual net operating income was $300,000? 
A. Prevo’s static budget must have showed a net operating income of $315,000.
B. Prevo’s static budget must have showed a net operating income of $285,000.
C. Prevo’s flexible budget must have showed a net operating income of $315,000.
D. Prevo’s flexible budget must have showed a net operating income of $285,000.

23. Taylor Products Inc. has an $5,000 unfavorable flexible budget variance for October. Which of the following statements is true, if October’s flexible budget net operating income was $175,000? 
A. Taylor’s static budget must have showed a net operating income of $180,000.
B. Taylor’s static budget must have showed a net operating income of $170,000.
C. Taylor’s actual net operating income must have been $180,000.
D. Taylor’s actual net operating income must have been $170,000.

24. Smith Corporation has a $6,000 favorable flexible budget variance for January. Which of the following statements is true, if January’s flexible budget net operating income was $100,000? 
A. Smith’s static budget must have showed a net operating income of $106,000.
B. Smith’s static budget must have showed a net operating income of $94,000.
C. Smith’s actual net operating income must have been $106,000.
D. Smith’s actual net operating income must have been $94,000.

25. Coppelli Inc.
In early 2012, Coppelli Inc. had budgeted for the production and sale of 24,000 units. The standard sales price and variable costs per unit were budgeted to be $6.00 and $2.00, respectively. Actual sales for 2012 totaled 25,300 units, and the actual sales price and variable costs per unit were $6.50 and $2.10, respectively. Both budgeted and actual fixed costs were $30,000.

Refer to the Coppelli Inc. information above. What was Coppelli’s sales price variance for 2012? 
A. $12,650 F
B. $12,650 U
C. $12,000 F
D. $12,000 U

26. Fox Manufacturing
At the beginning of the year, Fox Manufacturing had budgeted for the production and sale of 24,000 units. The standard sales price and variable costs per unit were budgeted to be $20.00 and $8.00, respectively. Actual sales for the year totaled 21,000 units, and the actual sales price and variable costs per unit were $19.50 and $8.00, respectively. Both budgeted and actual fixed costs were $20,000.

Refer to the Fox Manufacturing information above. What was Fox’s sales price variance for the year? 
A. $10,500 F
B. $10,500 U
C. $12,000 F
D. $12,000 U

27. Lukey Products has an unfavorable materials usage variance. Which of the following would be the most likely reason for this variance? 
A. The company under budgeted the quantity of material to be used for each unit.
B. The company purchased material at a price for less than what was expected.
C. The company budgeted for a lower sales volume than what actually occurred.
D. The company did not use up all the material that had been purchased.

28. Chilé Products Ltd.
Chilé Products Ltd. bottles and sells hot pepper sauce. In 2012, the company had expected to sell 65,000 bottles but actually bottled and sold 80,000 bottles. The standard direct materials cost for each bottle is $.24 comprised of .60 ounces at a cost of $.40 per ounce. During 2012, 52,000 ounces of material were purchased out of which 46,000 ounces were used at a cost of $.37 per ounce.

Refer to the Chilé Products Ltd. information above. The direct materials price variance for 2012 was: 
A. $1,560 F.
B. $1,560 U.
C. $1,380 F.
D. $1,380 U.

29. Chilé Products Ltd.
Chilé Products Ltd. bottles and sells hot pepper sauce. In 2012, the company had expected to sell 65,000 bottles but actually bottled and sold 80,000 bottles. The standard direct materials cost for each bottle is $.24 comprised of .60 ounces at a cost of $.40 per ounce. During 2012, 52,000 ounces of material were purchased out of which 46,000 ounces were used at a cost of $.37 per ounce.

Refer to the Chilé Products Ltd. information above. The direct materials usage variance for 2012 was: 
A. $   800 F.
B. $   800 U.
C. $1,600 F.
D. $1,600 U.

30. Mystic Falls Inc.
Mystic Falls Inc. bottles and sells a popular soft drink. In 2011, the company had expected to sell 1,000,000 bottles but actually bottled and sold 900,000 bottles. The standard direct materials cost for each bottle is $.40 comprised of 10 ounces at a cost of $.04 per ounce. During 2011, 10,000,000 ounces of material were purchased out of which 9,200,000 ounces were used at a cost of $.05 per ounce.

Refer to the Mystic Falls Inc. information above. The direct materials price variance for 2011 was: 
A. $  92,000 U.
B. $  92,000 F.
C. $100,000 U.
D. $100,000 F.