Question

6.

Ofarrell Corporation, a company that produces and sells a single product, has provided its contribution format income statement for March.

Sales (7,700 units)	$400,400
Variable expenses	246,400
Contribution margin	154,000
Fixed expenses	103,500
Net operating income	$50,500

If the company sells 7,600 units, its net operating income should be closest to:

$46,000

$48,500

$50,500

$49,979

8.

Data concerning Wang Corporation's single product appear below: (Do not round your intermediate calculations.)

Selling price per unit	$	180.00
Variable expense per unit	$	68.40
Fixed expense per month	$	130,200

The break-even in monthly dollar sales is closest to:

$210,000

$289,800

$130,200

$420,000

16.

Rehmer Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.05 direct labor-hours. The direct labor rate is $9.20 per direct labor-hour. The production budget calls for producing 4,400 units in June and 4,900 units in July.

Required:

Construct the direct labor budget for the next two months, assuming that the direct labor work force is fully adjusted to the total direct labor-hours needed each month. (Round your answers to 2 decimal places.)

                                                                                                JUNE                                                     JULY

Required production in units                      ___________________                             ____________________

Direct labor hours per unit                           ___________________                             ____________________

Total direct labor hours needed                ___________________                             ____________________

Direct labor hours cost per hour                ___________________                             ____________________

Total direct labor cost                                     ___________________                             ____________________

17.

A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. Variable manufacturing overhead standards are based on machine-hours.

Standard hours per unit of output	4.40	machine-hours
Standard variable overhead rate	$11.55	per machine-hour

The following data pertain to operations for the last month:

Actual hours	8,800	machine-hours
Actual total variable manufacturing overhead cost	$95,910
Actual output	1,900	units

What is the variable overhead efficiency variance for the month?

$2,832 U

$7,293 F

$5,082 U

$7,293 U

Answer 1

6) O’Farrell Corporation, a company that produces and sells a single product, has provided its contribution format income statement for March.

Answer: $ 48,500

Selling Price per unit ( 400400/7700)	$ 52 Per unit
Variable expenses per unit ( (246400/7700)	$ 32 Per unit
Sales ( 7600*52)               =    $395200 Less: variable(7600*32)   =    $( 243200) Contribution                       =   $ 152000 Less: fixed expenses          =    $ 103500
Net operating Income	$ 48500

8)   Data concerning Wang Corporation's single product appear below: (Do not round your intermediate calculations.)

Answer: $ 210,000  

Contribution Margin    ( sales – variable expenses)                                           ( 180 – 68.40)	$ 111.6
Contribution margin Ratio = Unit contribution margin / unit selling prise                                                  = ( 111.6 / 180 )	$ 0.62
Dollar sales to break even   = fixed expenses / contribution margin ratio                                                      = ( 130200 / 0.62 )	$ 210,000

    

16) Rehmer Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.05 direct labor-hours. The direct labor rate is $9.20 per direct labor-hour. The production budget calls for producing 4,400 units in June and 4,900 units in July.

Construct the direct labor budget for the next two months, assuming that the direct labor work force is fully adjusted to the total direct labor-hours needed each month. (Round your answers to 2 decimal places.)

Answer:

	July	June
Required production in units	4900	4400
Direct labor hours per unit	0.05	0.05
Total direct labor hours needed	245	220
Direct labor hours cost per hour	9.20	9.20
Total direct labor cost	2245	2024

Note: - Total direct labor cost = Total direct labor hours needed x Direct labor hours cost per hour

17) A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. Variable manufacturing overhead standards are based on machine-hours.

What is the variable overhead efficiency variance for the month?

Answer: $ 5082 U

variable overhead efficiency = Standard overhead rate ( Actual hours - Standard hours )                                                        = 11.55 ( 8800 – 8360 )	$ 5082 U
Standard hours = 1900*4.40	$8360