71. Colina Production Company uses a standard costing system. The following information pertains to 2014. Direct labor hours is the driver used to assign overhead costs to products. Actual production 5,500 units
Actual factory overhead costs ($16,500 is fixed) $40,125
Actual direct labor costs (11,250 hours) $131,625
Standard direct labor for 5,500 units:
Standard hours allowed 11,000 hours
Labor rate $12.00
The factory overhead rate is based on an activity level of 10,000 direct labor hours. Standard cost data for 5,000 units is as follows:
Variable factory overhead $22,500
Fixed factory overhead 13,500
Total factory overhead $36,000
What is the fixed overhead volume variance for Colina Production Company?
a. $3,600 (F)
b. $4,125 (U)
c. $1,350 (F)
d. $1,350 (U)
Fixed overhead budget - FO applied
FO applie = SH x FR - SH x (budgeted fixed overhead/budgeted hours)
13,500 (11,000 x (13,500/10,000)) = 1,350 (F)
72. The A divisionalized company uses transfer pricing as part of its management information system. Each manager is assessed on their divisional profit. Division A makes a unit for $10 variable cost and $3 of fixed cost is absorbed. Division B takes these units, incurs incremental $8 variable cost and absorb S4. It then sells them for $21. The transfer price is set at $12. There are no capacity constraints and all fixed costs are unavoidable in the short run. Which of the above statements is true?
a. The manager of division A does not produce the units
b. The transfer price goal congruent
c. From the company's perspective, production should not occur
d. The manager of division B does not produce the units
73. To improve customer profitability, companies should:
a. Measure and monitor discounts by both customer and sales person
b. Be in an industry with high growth potential
c. Strictly enforce their policy that orders must be handled efficiently
d. Show that the costs assigned to individual customers are variable and can be eliminated short-run
74. Which of the following is the advantage of just-in-time control system?
a. It is easier to switch suppliers
b. Labour becomes less important
c. The quality of production improves
d. There is a reduced reliance on suppliers
75. Which of the following statements is/ are true? (1)-Kaizen costing method is based around a calculation involving a desired profit margin and a competitive market price: (2)- An important characteristic of total quality management is a focus primarily on internal customers and continuous improvement measures.
a. Both statements are false
b. Statement (2) is true and statement (1) is false
c. Both statements are true
d. Statement (1) is true and statement (2) is false
76. Budgeted sales of Y for June are 20,000 units. At the end of the production process for Y, 10% of the production units are scrapped as defective. Opening inventories of Y for June are budgeted to be 11,000 units and closing inventories will be 9,000 units. All inventories of finished goods must have successfully passed the quality control check. What is the production budget for Y in June?
What is the production budget for Y in June?
a. 19,800 units
b. 16,200 units
c. 18,000 units
d. 20,000 units
Budgeted sales 20000
Budgeted reduction in finished goods (2000) = 11000 - 9000
Budgeted production of completed units 18000
Allowance for defective units
(10% of output 1/9 of Input) 18000 x 1/9 - 2000
Production budget 18000 + 2000 - 20000
77. The sales budget shows the expected sales quantity and price of each product or service
a. True
b. False
78. Tasty Pty is a distributes pizza ingredients. Its ABC system has five activities...
The line-item ordering cost for R Pizza is:
a. $48
b. $528
c. $33
d. $336
79. The master budget is composed of the operations budget and the future budget.
a. True
b. False
80. Alana Company manufactures books. Manufacturing a book takes 10 units of A1 and 1 unit of A2. Scheduled production of books for the next two months is 1,000 and 1,200 units, respectively. Beginning inventory is 4,000 units of al and 30 units of a2. The ending inventory of Al is planned to decrease 500 units in each of the next two months, and the A2 inventory is expected to increase 5 units in each of the next two months.
Based on this information, the number of units of Al that needs to be purchased by Alana during the first month is
a. 1,000 units
b. 10,500 units
c. 9,500 units
d. 10,000 units
the number of units purchased budget sales + ending - beginning - (1,000 x 10) - 3,500 - 4,000
Actual factory overhead costs ($16,500 is fixed) $40,125
Actual direct labor costs (11,250 hours) $131,625
Standard direct labor for 5,500 units:
Standard hours allowed 11,000 hours
Labor rate $12.00
The factory overhead rate is based on an activity level of 10,000 direct labor hours. Standard cost data for 5,000 units is as follows:
Variable factory overhead $22,500
Fixed factory overhead 13,500
Total factory overhead $36,000
What is the fixed overhead volume variance for Colina Production Company?
a. $3,600 (F)
b. $4,125 (U)
c. $1,350 (F)
d. $1,350 (U)
Fixed overhead budget - FO applied
FO applie = SH x FR - SH x (budgeted fixed overhead/budgeted hours)
13,500 (11,000 x (13,500/10,000)) = 1,350 (F)
72. The A divisionalized company uses transfer pricing as part of its management information system. Each manager is assessed on their divisional profit. Division A makes a unit for $10 variable cost and $3 of fixed cost is absorbed. Division B takes these units, incurs incremental $8 variable cost and absorb S4. It then sells them for $21. The transfer price is set at $12. There are no capacity constraints and all fixed costs are unavoidable in the short run. Which of the above statements is true?
a. The manager of division A does not produce the units
b. The transfer price goal congruent
c. From the company's perspective, production should not occur
d. The manager of division B does not produce the units
73. To improve customer profitability, companies should:
a. Measure and monitor discounts by both customer and sales person
b. Be in an industry with high growth potential
c. Strictly enforce their policy that orders must be handled efficiently
d. Show that the costs assigned to individual customers are variable and can be eliminated short-run
74. Which of the following is the advantage of just-in-time control system?
a. It is easier to switch suppliers
b. Labour becomes less important
c. The quality of production improves
d. There is a reduced reliance on suppliers
75. Which of the following statements is/ are true? (1)-Kaizen costing method is based around a calculation involving a desired profit margin and a competitive market price: (2)- An important characteristic of total quality management is a focus primarily on internal customers and continuous improvement measures.
a. Both statements are false
b. Statement (2) is true and statement (1) is false
c. Both statements are true
d. Statement (1) is true and statement (2) is false
76. Budgeted sales of Y for June are 20,000 units. At the end of the production process for Y, 10% of the production units are scrapped as defective. Opening inventories of Y for June are budgeted to be 11,000 units and closing inventories will be 9,000 units. All inventories of finished goods must have successfully passed the quality control check. What is the production budget for Y in June?
What is the production budget for Y in June?
a. 19,800 units
b. 16,200 units
c. 18,000 units
d. 20,000 units
Budgeted sales 20000
Budgeted reduction in finished goods (2000) = 11000 - 9000
Budgeted production of completed units 18000
Allowance for defective units
(10% of output 1/9 of Input) 18000 x 1/9 - 2000
Production budget 18000 + 2000 - 20000
77. The sales budget shows the expected sales quantity and price of each product or service
a. True
b. False
78. Tasty Pty is a distributes pizza ingredients. Its ABC system has five activities...
The line-item ordering cost for R Pizza is:
a. $48
b. $528
c. $33
d. $336
79. The master budget is composed of the operations budget and the future budget.
a. True
b. False
80. Alana Company manufactures books. Manufacturing a book takes 10 units of A1 and 1 unit of A2. Scheduled production of books for the next two months is 1,000 and 1,200 units, respectively. Beginning inventory is 4,000 units of al and 30 units of a2. The ending inventory of Al is planned to decrease 500 units in each of the next two months, and the A2 inventory is expected to increase 5 units in each of the next two months.
Based on this information, the number of units of Al that needs to be purchased by Alana during the first month is
a. 1,000 units
b. 10,500 units
c. 9,500 units
d. 10,000 units
the number of units purchased budget sales + ending - beginning - (1,000 x 10) - 3,500 - 4,000
