Question :
11. Mary’s Fine Fashions manufactures and sells various types of women’s : 1295661
11. Mary’s Fine Fashions manufactures and sells various types of women’s clothing. At the end of 2007, Mary had estimated for the production and sale of 25,000 short-sleeve shirts. Each shirt has a standard calling for 2.5 yards of direct material at a standard cost of $1.25 per yard and 12 minutes of direct labor time at a standard cost of $.20 per minute. During 2008, the company actually produced and sold 23,000 shirts. These 23,000 shirts had an actual direct materials cost of $77,142 (59,340 yards at $1.30 per yard) and an actual direct labor cost of $63,250 (253,000 minutes at $.25 per minute). Each shirt sells for $20. Refer to the Mary’s Fine Fashions information above. What is Mary’s net income (loss) based on a flexible budget? A. $332,925B. $361,875C. $347,400D. $307,400
12. Mary’s Fine Fashions manufactures and sells various types of women’s clothing. At the end of 2007, Mary had estimated for the production and sale of 25,000 short-sleeve shirts. Each shirt has a standard calling for 2.5 yards of direct material at a standard cost of $1.25 per yard and 12 minutes of direct labor time at a standard cost of $.20 per minute. During 2008, the company actually produced and sold 23,000 shirts. These 23,000 shirts had an actual direct materials cost of $77,142 (59,340 yards at $1.30 per yard) and an actual direct labor cost of $63,250 (253,000 minutes at $.25 per minute). Each shirt sells for $20. Refer to the Mary’s Fine Fashions information above. What is Mary’s flexible budget variance? A. $14,475 FB. $28,950 UC. $42,267 FD. $13,317 U
13. At the end of January, Supreme Catering prepared the following budget for the upcoming month of February estimating that they would serve 3,000 people:
Sales revenue per guest
$20
Variable costs per guest
8
Total fixed costs
$5,000
During February, there were 2,700 guests actually served. Actual costs incurred were $27,000 for variable costs and $6,500 for fixed costs. Each guest was charged $20. Refer to the Supreme Catering information above. Supreme Catering’s flexible budget for February would show net income of: A. $31,000B. $20,500C. $27,400D. $19,000
14. At the end of January, Supreme Catering prepared the following budget for the upcoming month of February estimating that they would serve 3,000 people:
Sales revenue per guest
$20
Variable costs per guest
8
Total fixed costs
$5,000
During February, there were 2,700 guests actually served. Actual costs incurred were $27,000 for variable costs and $6,500 for fixed costs. Each guest was charged $20. Refer to the Supreme Catering information above. Supreme Catering’s flexible budget variance for February would show a variance of: A. $ 6,900 UB. $ 6,900 FC. $10,500 UD. $10,500 F
15. 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 income
$2,425
During August, Trina actually produced and sold 400 leis. What should be Trina’s net income in August based on a flexible budget? A. $1,940B. $1,825C. $1,425D. $1,900
16. Hathaway Inc. produces and sells golf umbrellas to local resorts. Hathaway anticipates April to be a busy month with the sale of 1,000 umbrellas. The company has prepared the following static budget for April:
Sales revenue (1,000 units)
$40,000
Variable costs:
Direct materials
5,000
Direct labor
6,000
Overhead
1,500
Fixed costs
4,000
Net income
$23,500
During April, Hathaway actually produced and sold 1,200 umbrellas. What should be Hathaway’s net income in April based on a flexible budget? A. $29,000B. $28,200C. $31,500D. $29,300
17. Hoppe Inc. manufactures widgets. Management has determined that each widget has a standard materials cost of $3.50 when 2.5 ounces of raw material at a cost of $1.40 per ounce are used. The static budget for the month of December showed an estimated production of 4,000 widgets in December. During December, 4,300 widgets were actually produced. The actual cost for each widget was $3.60 when 2.25 ounces of raw material at a cost of $1.60 per ounce were purchased and used. What should be the total direct materials cost according to Hoppe’s flexible budget for December? A. $14,400B. $15,050C. $14,000D. $15,480
18. Violetta Inc. manufactures plastic storage boxes. Management has determined that each medium-sized box has a standard materials cost of $1.20 when 4 pounds of raw material at a cost of $.30 per pound are used. The static budget for the month of March showed an estimated production of 15,000 boxes in March. During March, 17,000 boxes were actually produced. The actual cost for each box was $1.56 when 3.9 pounds of raw material at a cost of $.40 per pound were purchased and used. What should be the total direct materials cost according to Violetta’s flexible budget for March? A. $20,400B. $26,520C. $18,000D. $23,400
19. Holt Products manufactures desk-top computers. Management has determined that each computer has a standard labor cost of $48.00 when 4 hours of labor at a cost of $12.00 per hour are used. The static budget for the month of April showed an estimated production of 3,900 computers. During April, 4,200 computers were actually produced. The actual direct labor cost for each computer was $57.60 when 4.5 hours of labor at a cost of $12.80 per hour was used. What should be the total direct labor cost according to Holt’s flexible budget for April? A. $224,640B. $187,200C. $201,600D. $241,920
20. 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
