Question

1.Scarlett Company has a direct material standard of 3 gallons of input at a cost of $13 per gallon. During July, Scarlett Company purchased and used 7,540 gallons. The direct material quantity variance was $1,170 unfavorable and the direct material price variance was $3,770 favorable. What price per gallon was paid for the purchases?

$12.50

$10.40

$13.00

$13.40

2.Connor Company has a direct material standard of 2 gallons of input at a cost of $14.00 per gallon. During July, Conor Company purchased and used 6,600 gallons, paying $46,800. The direct materials quantity variance was $1,960 unfavorable. How many units were produced?

3,137 units

6,600 units

3,230 units

3,330 units

3.Delaware Corp. prepared a master budget that included $16,200 for direct materials, $28,900 for direct labor, $20,250 for variable overhead, and $38,800 for fixed overhead. Delaware Corp. planned to sell 4,050 units during the period, but actually sold 4,360 units. What would Delaware’s variable overhead cost be if it used a flexible budget for the period based on actual sales? (Do not round intermediate calculation.)

$38,800

$21,800

$20,250

$19,204

4.Delaware Corp. prepared a master budget that included $20,000 for direct materials, $64,000 for direct labor, $15,700 for variable overhead, and $39,000 for fixed overhead. Delaware Corp. planned to sell 4,000 units during the period, but actually sold 4,300 units. What would Delaware’s direct labor cost be if it used a flexible budget for the period based on actual sales?

$50,740

$62,047

$64,000

$68,800

Answer 1

Answer 1.

Direct Materials Price Variance = Actual Quantity * (Actual Rate - Standard Rate)
-$3,770 = 7,540 * (Actual Rate - $13)
-0.50 = Actual Rate - $13
Actual Rate = $12.50

Answer 2.

Direct Material Quantity Variance = Standard Rate * (Actual Quantity - Standard Quantity)
$1,960 = $14.00 * (6,600 - Standard Quantity)
140 = 6,600 - Standard Quantity
Standard Quantity = 6,460 gallon

Standard Quantity = 2 gallon * Number of units
6,460 = 2 * Number of units
Number of units = 3,230

Answer 3.

Budgeted Sales Volume = 4,050
Budgeted Variable Overhead = $20,250

Variable Overhead per unit = Budgeted Variable Overhead / Budgeted Sales Volume
Variable Overhead per unit = $20,250 / 4,050
Variable Overhead per unit = $5.00

Actual Sales Volume = 4,360

Flexible Budget:

Variable Overhead Cost = Variable Overhead per unit * Actual Sales Volume
Variable Overhead Cost = $5.00 * 4,360
Variable Overhead Cost = $21,800

Answer 4.

Budgeted Sales Volume = 4,000
Budgeted Direct Labor = $64,000

Direct Labor per unit = Budgeted Direct Labor / Budgeted Sales Volume
Direct Labor per unit = $64,000 / 4,000
Direct Labor per unit = $16.00

Actual Sales Volume = 4,300

Flexible Budget:

Direct Labor Cost = Direct Labor per unit * Actual Sales Volume
Direct Labor Cost = $16.00 * 4,300
Direct Labor Cost = $68,800