1) Humphreys, Inc. manufactures widgets for distribution. The standard costs for the
manufacture of widgets follow:
Standard CostsActual Costs
Direct materials3 lbs. per widget at31,000 lbs. at $33
$35 per poundper pound
Direct labor2.5 hours per widget22,500 hours at
at $11 per hour$11.80 per hour
Factory overheadVariable cost, $24/widget$241,500 variable cost
Fixed cost, $40/widget$381,250 fixed cost
Budgeted factory overhead was $640,000. Overhead applied is based on widgets
produced. The company estimated that 10,000 widgets would be produced; however,
only 9,600 were produced.
Instructions
Calculate the following amounts.
1>Rate at which total factory overhead is applied
2>Materials price variance
3>Total materials variance
4>Overhead volume variance
5>Overhead controllable variance
2) The cash effects of selling goods and services appears in the ______________
activities section of a statement of cash flows.
3) Cost of goods sold for the year amounted to $130,000, and during the year, accounts
payable ______________ by $9,000 and inventory ______________ by $5,000
resulting in cash paid to suppliers of $116,000.
4) The adjusted trial balance columns of a worksheet are obtained by subtracting the
adjustment columns from the trial balance columns.
5) The entries in the Accounts Receivable Credit column of the cash receipts journal
must be posted _______________ to the accounts in the accounts receivable subsidiary
ledger and in _______________ to the control account in the general ledger.
6) Michele’s Cabinets has fixed costs totaling $132,000. Its contribution margin per unit
is $1.20, and the selling price is $5.50 per unit.
Instructions
Compute the break-even point in units.