1) Manatee Corp. has developed standard costs based on a predicted operating level of
352,000 units of production, which is 80% of capacity. Variable overhead is $281,600 at
this level of activity, or $0.80 per unit. Fixed overhead is $440,000. The standard costs
per unit are:
Manatee actually produced 330,000 units at 75% of capacity and actual costs for the
period were:
Calculate the following variances and indicate whether each variance is favorable or
unfavorable:
(1) Direct labor efficiency variance:
$__________________
(2) Direct materials price variance:
$__________________
(3) Controllable overhead variance:
$__________________
2) The budget that lists the dollar amounts to be both received from plant asset
disposals and spent to purchase additional plant assets to carry out the budgeted
business activities is the _________________________.
3) Distinguish between selling expenses and general and administrative expenses.
4) _______________________ depreciation recognizes equal amounts of annual
depreciation over the life of an asset.
5) The total amount of cash and other assets the corporation receives from its
stockholders in exchange for common stock is called ________________________.
6) Held-to-maturity securities are ____________ securities a company intends and is
able to hold until maturity.
7) If partners agree on how to share income, but say nothing about losses, then losses
are shared ________________.
8) At the beginning of the year, a company had $120,000 worth of liabilities. During the
year, assets increased by $160,000 and at year-end they equaled $360,000. Liabilities
decreased $20,000 during the year. Calculate the beginning and ending values of equity.
9) Hal Burton began a Web Consulting practice and completed these transactions during
September of the current year:
Show the effects of the above transactions on the accounting equation of Halley Burton,
Consultant. Use the following format for your answers. The first item is shown as an
example.
Increase = I Decrease = D No effect = N
10) A company is looking into two alternative methods of producing its product. The
following information about the two alternatives is available. If the company’s expected
sales volume is 35,000 units, which alternative should be selected? Prepare forecasted
income statements and compute degree of operating leverage to assess the alternatives.