Accounting Chapter 17 Which The Following Factors Should Not

Document Type
Test Prep
Book Title
Fundamentals of Cost Accounting 5th Edition
Authors
Michael Maher, Shannon Anderson, William Lanen
17-81
91.
The Becton Enterprises (BE) produces a gasoline additive, Charger Power. This product
increases engine efficiency and improves gasoline mileage by creating a more complete
burn in the combustion process. Careful controls are required during the production
process to insure that the proper mix of input chemicals is achieved and that evaporation
is controlled. Loss of output and efficiency may result if the controls are not effective.
The standard cost of producing a 500-liter batch of Charger Power is $135. The standard
materials mix and related standard cost of each chemical used in a 500-liter batch are:
Chemical
Std input
quantity
Std cost
per liter
Total
cost
Echol
200
$0.200
$40.00
Protex
100
0.425
42.50
Benz
250
0.150
37.50
CT-40
50
0.300
15.00
600
$135.00
The quantities of chemicals purchased and used during the current production period are
shown in the schedule below. A total of 140 batches of Charger Power were manufactured
during the current production period. The controller of BE has determined its costs and
chemical usage variations at the end of the production period.
Chemical
Quantity
Purchased
Quantity
Used
Echol
25,000
26,600
Protex
13,000
12,880
Benz
40,000
37,800
CT-40
7,500
7,140
85,500
84,420
17-83
92.
The Becton Enterprises (BE) produces a gasoline additive, Charger Power. This product
increases engine efficiency and improves gasoline mileage by creating a more complete
burn in the combustion process. Careful controls are required during the production
process to insure that the proper mix of input chemicals is achieved and that evaporation
is controlled. Loss of output and efficiency may result if the controls are not effective.
The standard cost of producing a 500-liter batch of Charger Power is $135. The standard
materials mix and related standard cost of each chemical used in a 500-liter batch are:
Chemical
Std input
quantity
Std cost
per liter
Total
cost
Echol
200
$0.200
$40.00
Protex
100
0.425
42.50
Benz
250
0.150
37.50
CT-40
50
0.300
15.00
600
$135.00
The quantities of chemicals purchased and used during the current production period are
shown in the schedule below. A total of 140 batches of Charger Power were manufactured
during the current production period. The controller of BE has determined its costs and
chemical usage variations at the end of the production period.
Chemical
Quantity
Purchased
Quantity
Used
Echol
25,000
26,600
Protex
13,000
12,880
Benz
40,000
37,800
CT-40
7,500
7,140
85,500
84,420
17-85
93.
The Becton Enterprises (BE) produces a gasoline additive, Charger Power. This product
increases engine efficiency and improves gasoline mileage by creating a more complete
burn in the combustion process. Careful controls are required during the production
process to insure that the proper mix of input chemicals is achieved and that evaporation
is controlled. Loss of output and efficiency may result if the controls are not effective.
The standard cost of producing a 500-liter batch of Charger Power is $135. The standard
materials mix and related standard cost of each chemical used in a 500-liter batch are:
Chemical
Std input
quantity
Std cost
per liter
Total
cost
Echol
200
$0.200
$40.00
Protex
100
0.425
42.50
Benz
250
0.150
37.50
CT-40
50
0.300
15.00
600
$135.00
The quantities of chemicals purchased and used during the current production period are
shown in the schedule below. A total of 140 batches of Charger Power were manufactured
during the current production period. The controller of BE has determined its costs and
chemical usage variations at the end of the production period.
Chemical
Quantity
Purchased
Quantity
Used
Echol
25,000
26,600
Protex
13,000
12,880
Benz
40,000
37,800
CT-40
7,500
7,140
85,500
84,420
94.
A company makes a product using two materials, one of which is interchangeable with a
third material. The standards for producing one 200-pound batch are presented below.
The last 200-pound batch was produced using 140 pounds of M and 90 pounds of O. The
price of M was $0.03 per pound and the actual price of O was $0.10.
Material
Standard
Quantity
(lbs)
LBS
Standard
Cost/lb.
Total
Cost
O
0
$.10
$0
H
80
.08
6.40
M
120
.02
2.40
200
$8.80
95.
A company makes a product using two materials, one of which is interchangeable with a
third material. The standards for producing one 200-pound batch are presented below.
The last 200-pound batch was produced using 140 pounds of M and 90 pounds of O. The
price of M was $0.03 per pound and the actual price of O was $0.10.
Material
Standard
Quantity
(lbs)
LBS
Standard
Cost/lb.
Total
Cost
O
0
$.10
$0
H
80
.08
6.40
M
120
.02
2.40
200
$8.80
Is the materials mix variance favorable or unfavorable?
96.
A company makes a product using two materials, one of which is interchangeable with a
third material. The standards for producing one 200-pound batch are presented below.
The last 200-pound batch was produced using 140 pounds of M and 90 pounds of O. The
price of M was $0.03 per pound and the actual price of O was $0.10.
Material
Standard
Quantity
(lbs)
LBS
Standard
Cost/lb.
Total
Cost
O
0
$.10
$0
H
80
.08
6.40
M
120
.02
2.40
200
$8.80
97.
A company makes a product using two materials, one of which is interchangeable with a
third material. The standards for producing one 200-pound batch are presented below.
The last 200-pound batch was produced using 140 pounds of M and 90 pounds of O. The
price of M was $0.03 per pound and the actual price of O was $0.10.
Material
Standard
Quantity
(lbs)
LBS
Standard
Cost/lb.
Total
Cost
O
0
$.10
$0
H
80
.08
6.40
M
120
.02
2.40
200
$8.80
98.
Bonner Company's direct labor cost for March was as follows:
Actual direct labor hours
30,000
Standard direct labor hours
31,500
Rate variance
$4,500
U
Total payroll
$189,000
Labor mix variance
$4,225
U
99.
Bonner Company's direct labor cost for March was as follows:
Actual direct labor hours
30,000
Standard direct labor hours
31,500
Rate variance
$4,500
U
Total payroll
$189,000
Labor mix variance
$4,225
U
Is the direct labor yield variance favorable or unfavorable?
100.
Prince Inc. has the following information:
Total payroll
$165,300
Standard direct labor hours
45,000
Labor rate variance
$8,700
F
Labor mix variance
$4,000
F
Labor yield variance
$2,000
F
101.
Prince Inc. has the following information:
Total payroll
$165,300
Standard direct labor hours
45,000
Labor rate variance
$8,700
F
Labor mix variance
$4,000
F
Labor yield variance
$2,000
F
17-95
102.
The following data for April has been provided by Cowle Corporation.
Level of activity
8,800
machine-
hours
Budgeted fixed
manufacturing overhead
costs
$178,640
Actual level of activity
9,200
machine-
hours
Standard machine-hours
allowed for the actual
output
9,300
machine-
hours
Actual fixed manufacturing
overhead costs
$172,980
103.
The following data for April has been provided by Cowle Corporation.
Level of activity
8,800
machine-
hours
Budgeted fixed
$178,640
manufacturing overhead
costs
Actual level of activity
9,200
machine-
hours
Standard machine-hours
allowed for the actual
output
9,300
machine-
hours
Actual fixed manufacturing
overhead costs
$172,980
machine-
hours
104.
Yellon Company uses a standard cost system in which it applies manufacturing overhead
to units of product on the basis of standard direct labor-hours (DLHs). The following data
pertain to last month's operations:
Budgeted fixed manufacturing
overhead costs
$5,000
Actual fixed manufacturing
overhead costs
$5,500
Standard hours allowed for output
2,400
DLHs
Predetermined overhead rate ($2
variable + $3 fixed)
$5
per
DLH
105.
106.
107.
Which of the following factors should not be considered when deciding whether to
investigate a variance?
17-100
108.
There are several reasons why actual results differ from standards. Which of the following
does not represent a reason why a variance might occur?
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