Question

52.

Assume the following:

• The standard price per pound is $3.00.
• The actual quantity of materials purchased and used in production is 63,300 pounds.
• The actual purchase price per pound of materials was $3.10.

What is the materials price variance?

Multiple Choice

• $6,330 F

• $6,330 U

• $3,165 F

• $3,165 U

60.

Assume a company is preparing a budget for its first two months of operations. During the first and second months it expects credit sales of $42,000 and $68,000, respectively. The company expects to collect 60% of its credit sales in the month of the sale, 35% in the following month, and 5% is deemed uncollectible. What amount of cash collections from credit sales would the company include in its cash budget for the second month?

Multiple Choice

• $58,900

• $23,800

• $40,800

• $55,500

Answer 1

Solution 52
	Standard price per pound	$            3.00
	Actual price per pound	$            3.10
	Actual quantity in pound	63,300
	Material price variance=	(Standard price - Actual price)*Actual quantity
	Material price variance=	(3-3.10)*63300
	Material price variance=	$   (6,330.00)	Unfavorable
Solution 60
		First Month	2nd Month
	Sale	$        42,000	$     68,000
	Collection in 2nd month
	- 60% of 2nd month sale		$     40,800
	- 35% of first month month		$     14,700
	Total collection		$     55,500