Question

1.Assume that the cost formula for one of a company’s variable expenses is $5.00 per unit. The company’s planned level of activity was 2,000 units and its actual level of activity was 2,200 units. The actual amount of this expense was $10,040. The spending variance for this expense is:

• $960 F.

• $1,560 F.

• $2,520 U.

• $2,520 F

2.Assume the sales budget for April and May is 46,000 units and 48,000 units, respectively. The production budget for the same two months is 43,000 units and 44,000 units, respectively. Each unit of finished goods required 4 pounds of raw materials. The company always maintains raw materials inventory equal to 25% of the following months production needs. If the company pays $2.75 per pound of raw material, then what is the estimated cost of raw material purchases for April?

• $478,750

• $475,750

• $475,000

• $481,500

3.Assume that a company’s budgeted revenue per unit is $50. The company’s planned level of activity was 2,000 units and its actual level of activity was 2,200 units. Its actual revenue was $103,400. The company’s revenue variance is:

• $6,600 U.

• $6,600 F.

• $4,600 F.

• $4,600 U.

4.Assume the sales budget for April and May is 42,000 units and 44,000 units, respectively. The production budget for the same two months is 39,000 units and 40,000 units, respectively. Each unit of finished goods required 4 pounds of raw materials. The company always maintains raw materials inventory equal to 30% of the following month's production needs. How many pounds of raw material need to be purchased in April?

• 159,200

• 157,200

• 156,600

• 161,100

5.Assume a company’s budgeted unit sales and its required production in units for April are 92,000 units and 90,000 units, respectively. The direct labor-hours required per unit is 1.50 hours. The company’s total budgeted direct labor cost for April is $1,957,500. What is the budgeted direct labor wage rate per hour for April?

• $14.50

• $19.07

• $18.40

• $14.18

6.Assume the following (1) sales = $200,000, (2) unit sales = 10,000, (3) the contribution margin ratio = 37%, and (4) net operating income = $10,000. Given these four assumptions, which of the following is true?

• The variable expense per unit = $7.40

• The total fixed expenses = $126,000

• The total contribution margin = $74,000

• The break-even point is 8,077 units

7.Assume that a company’s planned level of activity was 2,000 units and its actual level of activity was 2,100 units. The revenue variance was $1,200 unfavorable and the revenue activity variance was $7,400 unfavorable. What budgeted revenue per unit does the company use for creating its planning and flexible budgets?

• $74 per unit

• $70 per unit

• $64 per unit

• $40 per unit

Answer 1

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