Question

Please answer the following questions:

Q1 Trendy Coats is looking at financials to prepare end of year reports. It purchases cotton to make their coats. Actual quantity of pounds purchased was 8,000 pounds. Standard quantity was 10,000 pounds. Actual price per pound was $1.25. Standard price per pound was $1.05.

What is Trendy Coats’ materials price variance?

a. ($1,600) Favorable; they paid a price higher than what was expected.

b. $10,000 Unfavorable; they paid a price higher than what was expected.

c. $1,600 Unfavorable; they paid a price higher than what was expected.

d. $8,400 Favorable; they paid a price higher than what was expected.

Q2 Trendy Coats is looking at financials to prepare end of year reports. It purchases cotton to make their coats. Actual quantity of pounds purchased was 8,000 pounds. Standard quantity was 10,000 pounds. Actual price per pound was $1.25. Standard price per pound was $1.05.

What is Trendy Coats’ materials efficiency variance?

a. ($2,100) Favorable; they used less material than what was expected.

b. ($2,500) Favorable; they used less material than what was expected.

c. ($10,500) Favorable; they used less material than what was expected.

d. ($1,600) Favorable; they used less material than what was expected.

Q3 Trendy Coats is looking at financials to prepare end of year reports. Actual hours used were 4,000. Standard hours allowed were 5,000. Actual wage paid per hour was $13. The total labor flexible budget variance was ($23,000) Favorable.

What was Trendy Coat’s standard price?

a. $15.00

b. $17.00

c. $13.50

d. $12.00

Q4 Trendy Coats is looking at financials to prepare end of year reports. Actual hours used were 4,000. Standard hours allowed were 5,000. Actual wage paid per hour was $13. The total labor flexible budget variance was ($23,000) Favorable.

What’s Trendy Coats’ labor efficiency variance?

a. ($23,000) Favorable; they used less labor hours than expected.

b. ($15,000) Favorable; they used less labor hours than expected.

c. ($8,000) Favorable; they used less labor hours than expected.

d. Since we don’t know the standard price, there is no labor efficiency variance.

Answer 1