Question

1.The correct formula for Direct Materials Quantity Variance is: A) (AH - SH) x SR B) (AP - SP) X AQ C) (AR - SR) X AH D) (AQ - SQ) X SP

2.The normal first budget prepared for a master budget is estimating: A)Production B)Expenditures C)Sales D)Income

3.

Buddy Company's direct materials budget shows the following cost of materials to be purchased for the coming three months:

		January		February		March
Material purchases		$12,040		$14,150		$10,970

Payments for purchases are expected to be made 50% in the month of purchase and 50% in the month following purchase. The December Accounts Payable balance is $6,500. The budgeted cash payments for materials in January are:

Answer 1

Q.1	Correct Option D) (AQ - SQ) X SP
Q.2	correct Option C)Sales
Q.3	Budgeted Cash payment in January	12,520
		January	February	March
	Material purchases	12,040	14,150	10,970
	Payment of accounts payable	6,500
	Payment in month of purchase	6,020	7,075	5,485
	Payment in following month	-	6,020	7,075
	Total payment	12,520	13,095	12,560