59) A company’s flexible budget for 12,000 units of production showed sales, $48,000; variable
costs, $18,000; and fixed costs, $16,000. The sales expected if the company produces and sells
16,000 units is:
A) $48,000.
B) $64,000.
C) $40,000.
D) $24,000.
E) $18,000.
60) A company’s flexible budget for 12,000 units of production showed sales, $48,000; variable
costs, $18,000; and fixed costs, $16,000. The variable costs expected if the company produces
and sells 16,000 units is:
A) $48,000.
B) $64,000.
C) $40,000.
D) $24,000.
E) $18,000.
61) A company’s flexible budget for 12,000 units of production showed sales, $48,000; variable
costs, $18,000; and fixed costs, $16,000. The contribution margin expected if the company
produces and sells 16,000 units is:
A) $48,000.
B) $64,000.
C) $40,000.
D) $24,000.
E) $18,000.
62) A company’s flexible budget for 12,000 units of production showed sales, $48,000; variable
costs, $18,000; and fixed costs, $16,000. The fixed costs expected if the company produces and
sells 16,000 units is:
A) $16,000.
B) $64,000.
C) $48,000.
D) $24,000.
E) $18,000.
63) A company’s flexible budget for 12,000 units of production showed sales, $48,000; variable
costs, $18,000; and fixed costs, $16,000. The operating income expected if the company
produces and sells 16,000 units is:
A) $2,667.
B) $14,000.
C) $18,667.
D) $24,000.
E) $35,000.
64) A company’s flexible budget for 12,000 units of production showed total contribution margin
of $24,000 and fixed costs, $16,000. The operating income expected if the company produces
and sells 15,000 units is:
A) $34,000.
B) $10,000.
C) $18,667.
D) $8,000.
E) $14,000.
65) A company’s flexible budget for 12,000 units of production showed per unit contribution
margin of $3.00 and fixed costs, $20,000. The operating income expected if the company
produces and sells 18,000 units is:
A) $34,000.
B) $10,000.
C) $18,667.
D) $16,000.
E) $24,000.
66) Based on predicted production of 12,000 units, a company anticipates $150,000 of fixed
costs and $123,000 of variable costs. The flexible budget amounts of fixed and variable costs for
10,000 units are:
A) $125,000 fixed and $102,500 variable.
B) $125,000 fixed and $123,000 variable.
C) $102,500 fixed and $150,000 variable.
D) $150,000 fixed and $123,000 variable.
E) $150,000 fixed and $102,500 variable.
67) Product A has a sales price of $10 per unit. Based on a 10,000-unit production level, the
variable costs are $6 per unit and the fixed costs are $3 per unit. Using a flexible budget for
12,500 units, what is the budgeted operating income from Product A?
A) $12,500.
B) $25,000.
C) $20,000.
D) $30,000.
E) $35,000.
68) A company’s flexible budget for 10,000 units of production reflects sales of $200,000;
variable costs of $40,000; and fixed costs of $75,000. Calculate the expected level of operating
income if the company produces and sells 13,000 units.
A) $110,500.
B) $85,000.
C) $133,000.
D) $100,000.
E) $50,500.
69) Based on a predicted level of production and sales of 12,000 units, a company anticipates
reporting operating income of $26,000 after deducting variable costs of $72,000 and fixed costs
of $10,000. Based on this information, the budgeted amounts of fixed and variable costs for
15,000 units would be:
A) $10,000 of fixed costs and $72,000 of variable costs.
B) $10,000 of fixed costs and $90,000 of variable costs.
C) $12,500 of fixed costs and $90,000 of variable costs.
D) $12,500 of fixed costs and $72,000 of variable costs.
E) $10,000 of fixed costs and $81,000 of variable costs.
70) Based on a predicted level of production and sales of 22,000 units, a company anticipates
total variable costs of $99,000, fixed costs of $30,000, and operating income of $36,000. Based
on this information, the budgeted amount of sales for 20,000 units would be:
A) $165,000.
B) $150,000.
C) $117,272.
D) $181,500.
E) $141,900.
71) Based on a predicted level of production and sales of 22,000 units, a company anticipates
total variable costs of $99,000, fixed costs of $30,000, and operating income of $36,000. Based
on this information, the budgeted amount of variable costs for 20,000 units would be:
A) $99,000.
B) $90,000.
C) $66,000.
D) $30,000.
E) $150,000.
72) Based on a predicted level of production and sales of 22,000 units, a company anticipates
total variable costs of $99,000, fixed costs of $30,000, and operating income of $36,000. Based
on this information, the budgeted amount of contribution margin for 20,000 units would be:
A) $99,000.
B) $90,000.
C) $66,000.
D) $150,000.
E) $60,000.
73) Based on a predicted level of production and sales of 22,000 units, a company anticipates
total variable costs of $99,000, fixed costs of $30,000, and operating income of $36,000. Based
on this information, the budgeted amount of fixed costs for 20,000 units would be:
A) $99,000.
B) $90,000.
C) $66,000.
D) $30,000.
E) $150,000.
74) Based on a predicted level of production and sales of 22,000 units, a company anticipates
total variable costs of $99,000, fixed costs of $30,000, and operating income of $36,000. Based
on this information, the budgeted amount of operating income for 20,000 units would be:
A) $30,000.
B) $60,000.
C) $69,000.
D) $150,000.
E) $32,727.
75) Based on a predicted level of production and sales of 30,000 units, a company anticipates
total contribution margin of $105,000, fixed costs of $40,000, and operating income of $65,000.
Based on this information, the budgeted operating income for 28,000 units would be:
A) $52,000.
B) $135,333.
C) $58,000.
D) $72,500.
E) $105,000.
76) Which department is often responsible for the direct materials price variance?
A) The accounting department.
B) The production department.
C) The purchasing department.
D) The finance department.
E) The budgeting department.
32
77) Georgia, Inc. has collected the following data on one of its products. The actual cost of direct
materials used is:
Direct materials standard (4 lbs. @ $1/lb.)
4
per finished unit
Total direct materials cost variance—unfavorable
13,750
Actual direct materials used
150,000
lbs.
Actual finished units produced
30,000
units
A) $133,750.
B) $150,000.
C) $106,250.
D) $158,750.
E) $120,000.
Budgeted direct materials (30,000 units × $4 each)
$
Unfavorable direct materials variance
Actual cost of direct materials used
$
78) Georgia, Inc. has collected the following data on one of its products. The direct materials
quantity variance is:
Direct materials standard (4 lbs. @ $1/lb.)
4
per finished unit
Total direct materials cost variance—unfavorable
13,750
Actual direct materials used
150,000
lbs.
Actual finished units produced
30,000
units
A) $30,000 favorable.
B) $13,750 unfavorable.
C) $16,250 favorable.
D) $30,000 unfavorable.
E) $13,750 favorable.
AQ × SP
150,000 lbs. × $1/lb. =
$
150,000
SQ × SP
30,000 units × 4 lbs./unit * $1/lb. =
120,000
Direct materials quantity variance
$
30,000
U
79) Georgia, Inc. has collected the following data on one of its products. The direct materials
price variance is:
Direct materials standard (4 lbs. @ $1/lb.)
$
4
per finished unit
Total direct materials cost variance—unfavorable
$
13,750
Actual direct materials used
150,000
lbs.
Actual finished units produced
30,000
units
A) $13,750 unfavorable.
B) $16,250 unfavorable.
C) $16,250 favorable.
D) $30,000 unfavorable.
E) $33,000 favorable.
Budgeted direct materials (30,000 units × $4 each)
120,000
Unfavorable direct materials variance
13,750
Actual cost of direct materials used
133,750
AQ × SP (150,000 lbs. × $1/lb.) =
150,000
Direct materials price variance
16,250
F
80) Parallel Enterprises has collected the following data on one of its products. During the period
the company produced 25,000 units. The direct materials price variance is:
Direct materials standard (7 kg. @ $2/kg)
14
per finished unit
Actual cost of materials purchased
322,500
Actual direct materials purchased and used
150,000
kgs.
A) $27,500 unfavorable.
B) $50,000 unfavorable.
C) $50,000 favorable.
D) $22,500 unfavorable.
E) $22,500 favorable.
Actual cost (AQ × AP)
$
322,500
AQ × SP = 150,000 × $2
300,000
Direct materials price variance
$
U
81) Parallel Enterprises has collected the following data on one of its products. During the period
the company produced 25,000 units. The direct materials quantity variance is:
Direct materials standard (7 kg. @ $2/kg)
$
14
per finished unit
Actual cost of materials purchased
$
322,500
Actual direct materials purchased and used
150,000
kg
A) $27,500 unfavorable.
B) $50,000 unfavorable.
C) $50,000 favorable.
D) $22,500 unfavorable.
E) $22,500 favorable.
AQ × SP = 150,000 × $2
300,000
SQ × SP = (7kg × 25,000) × $2
350,000
Direct materials quantity variance
F
82) Hassock Corp. produces woven wall hangings. It takes 2 hours of direct labor to produce a
single wall hanging. Hassock’s standard labor cost is $12 per hour. During August, Hassock
produced 10,000 units and used 21,040 hours of direct labor at a total cost of $250,376. What is
Hassock’s labor rate variance for August?
A) $2,000 favorable.
B) $2,104 unfavorable.
C) $2,104 favorable.
D) $4,160 favorable.
E) $2,000 unfavorable.
83) Hassock Corp. produces woven wall hangings. It takes 2 hours of direct labor to produce a
single wall hanging. Hassock’s standard labor cost is $12 per hour. During August, Hassock
produced 10,000 units and used 21,040 hours of direct labor at a total cost of $250,376. What is
Hassock’s labor efficiency variance for August?
A) $12,480 favorable.
B) $10,376 unfavorable.
C) $14,584 unfavorable.
D) $4,160 favorable.
E) $12,480 unfavorable.
84) Use the following data to find the total direct labor cost variance if the company produced
3,500 units during the period.
Direct labor standard (4 hrs. @ $12/hr.)
$
48
per unit
Actual hours worked
12,250
Actual rate per hour
$
12.50
A) $6,125 unfavorable.
B) $7,000 unfavorable.
C) $7,000 favorable.
D) $21,000 favorable.
E) $14,875 favorable.
AH × AR
(12,250) × $12.50/hr.
$
SH × SR
(3,500 units × 4 hours/unit) × $12/hr.
Total direct labor variance
$
F
85) Use the following data to find the direct labor rate variance if the company produced 3,500
units during the period.
Direct labor standard (4 hrs. @ $12/hr.)
$
48
per unit
Actual hours worked
12,250
Actual rate per hour
$
12.50
A) $6,125 unfavorable.
B) $7,000 unfavorable.
C) $7,000 favorable.
D) $21,000 favorable.
E) $14,875 favorable.
AH × AR
(12,250) × $12.50/hr.
$
AH × SR
(12,250) × $12/hr.
Total direct labor variance
$
U