Question : 61. Which of the following statements true regarding variance analysis in : 1291608

 

61. Which of the following statements is true regarding variance analysis in the modern manufacturing environment? A. It requires all variances, regardless of size, to be investigated by managers.B. The use of ideal standards over practical standards will always be the best motivator to employees.C. An “unfavorable” variance should always be interpreted as “bad”.D. It is often not available in a timely enough manner to be useful to employees.

 

62. Which of the following statements is true regarding “management by exception”? A. It is rarely used in variance analysis.B. It forces managers to investigate all variances, regardless of size.C. It requires managers to investigate variances that are material in amount.D. It requires managers to calculate standard costs but not actual costs.

 

63. Mary’s Fine FashionsMary’s Fine Fashions manufactures and sells various types of women’s clothing. At the end of 2011, 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 rate of $1.25 per yard and 12 minutes of direct labor time at a standard rate of $.20 per minute. During 2012, 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 operating income based on a flexible budget? A. $332,925B. $361,875C. $347,400D. $307,400

 

64. Mary’s Fine FashionsMary’s Fine Fashions manufactures and sells various types of women’s clothing. At the end of 2011, 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 rate of $1.25 per yard and 12 minutes of direct labor time at a standard rate of $.20 per minute. During 2012, 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

 

65. Supreme CateringAt the end of January, Supreme Catering prepared the following budget for the upcoming month of February estimating that they would serve 5,000 people: 

Sales revenue per guest

$25

Variable costs per guest

11

 

 

Total fixed costs

$7,000

 

 

During February, there were 4,800 guests actually served. Actual costs incurred were $67,200 for variable costs and $8,000 for fixed costs. Each guest was charged $25. Refer to the Supreme Catering information above. Supreme Catering’s flexible budget for February would show net operating income of: A. $63,000.B. $60,200.C. $59,200.D. $45,800.

 

66. Supreme CateringAt the end of January, Supreme Catering prepared the following budget for the upcoming month of February estimating that they would serve 5,000 people: 

Sales revenue per guest

$25

Variable costs per guest

11

 

 

Total fixed costs

$7,000

 

 

During February, there were 4,800 guests actually served. Actual costs incurred were $67,200 for variable costs and $8,000 for fixed costs. Each guest was charged $25. Refer to the Supreme Catering information above. Supreme Catering’s flexible budget variance for February would show a variance of: A. $15,400 U.B. $15,400 F.C. $18,200 U.D. $18,200 F.

 

67. JAX Inc.In early 2012, JAX Inc. had budgeted for the production and sales of 5,000 units at a sales price of $15 per unit. The following information is available regarding the standard cost for each unit: 

Direct materials:

1.50 pounds at $2.50 per lb

Direct labor:

30 minutes of assembly at $.20 per minute

 

 

Actual results for 2012 were determined to be as follows: 

Number of units produced

 

     and sold:

5,600 units

Sales revenue:

$100,800 ($18 per unit)

Direct materials cost:

$  22,848 (9,520 lbs purchased and used at $2.40 per lb)

Direct labor cost:

$  38,192 (173,600 minutes at $.22 per minute)

 

 

Refer to the JAX Inc. information above. What was JAX Inc.’s sales price variance for 2012? A. $15,000 FB. $15,000 UC. $16,800 FD. $16,800 U

 

68. JAX Inc.In early 2012, JAX Inc. had budgeted for the production and sales of 5,000 units at a sales price of $15 per unit. The following information is available regarding the standard cost for each unit: 

Direct materials:

1.50 pounds at $2.50 per lb

Direct labor:

30 minutes of assembly at $.20 per minute

 

 

Actual results for 2012 were determined to be as follows: 

Number of units produced

 

     and sold:

5,600 units

Sales revenue:

$100,800 ($18 per unit)

Direct materials cost:

$  22,848 (9,520 lbs purchased and used at $2.40 per lb)

Direct labor cost:

$  38,192 (173,600 minutes at $.22 per minute)

 

 

Refer to the JAX Inc. information above. What was JAX Inc.’s direct materials usage variance for 2012? A. $2,800 FB. $2,800 UC. $2,688 FD. $2,688 U

 

69. JAX Inc.In early 2012, JAX Inc. had budgeted for the production and sales of 5,000 units at a sales price of $15 per unit. The following information is available regarding the standard cost for each unit: 

Direct materials:

1.50 pounds at $2.50 per lb

Direct labor:

30 minutes of assembly at $.20 per minute

 

 

Actual results for 2012 were determined to be as follows: 

Number of units produced

 

     and sold:

5,600 units

Sales revenue:

$100,800 ($18 per unit)

Direct materials cost:

$  22,848 (9,520 lbs purchased and used at $2.40 per lb)

Direct labor cost:

$  38,192 (173,600 minutes at $.22 per minute)

 

 

Refer to the JAX Inc. information above. What was JAX Inc.’s direct materials price variance for 2012? A. $952 FB. $952 UC. $1,120 FD. $1,120 U

 

70. JAX Inc.In early 2012, JAX Inc. had budgeted for the production and sales of 5,000 units at a sales price of $15 per unit. The following information is available regarding the standard cost for each unit: 

Direct materials:

1.50 pounds at $2.50 per lb

Direct labor:

30 minutes of assembly at $.20 per minute

 

 

Actual results for 2012 were determined to be as follows: 

Number of units produced

 

     and sold:

5,600 units

Sales revenue:

$100,800 ($18 per unit)

Direct materials cost:

$  22,848 (9,520 lbs purchased and used at $2.40 per lb)

Direct labor cost:

$  38,192 (173,600 minutes at $.22 per minute)

 

 

Refer to the JAX Inc. information above. What was JAX Inc.’s direct labor rate variance for 2012? A. $3,360 FB. $3,360 UC. $3,472 FD. $3,472 U