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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) $72,500. B) $52,000. C) $135,333. D) $105,000. E) $58,000.
76) Which department is often responsible for the direct materials price variance?
A) The accounting department.
B) The budgeting department.
C) The purchasing department.
D) The finance department.
E) The production department.
77) Georgia, Inc. has collected the following data on one of its products. The actual cost of the 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) $106,250. B) $120,000. C) $150,000. D) $158,750. E) $133,750.
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 unfavorable.
B) $13,750 favorable.
C) $30,000 favorable.
D) $16,250 favorable.
E) $13,750 unfavorable.
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) $16,250 unfavorable.
B) $16,250 favorable.
C) $30,000 unfavorable.
D) $33,000 favorable.
E) $13,750 unfavorable.
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 lbs.
A) $50,000 unfavorable.
B) $22,500 unfavorable.
C) $27,500 unfavorable.
D) $22,500 favorable.
E) $50,000 favorable.
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) $50,000 unfavorable.
B) $22,500 favorable.
C) $50,000 favorable.
D) $27,500 unfavorable.
E) $22,500 unfavorable.
48
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) $2,000 unfavorable.
C) $2,104 unfavorable.
D) $2,104 favorable.
49
E) $4,160 favorable.
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) $14,584 unfavorable.
C) $10,376 unfavorable.
D) $12,480 unfavorable.
E) $4,160 favorable.
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. @ $7/hr.) $ 28 per unit
Actual hours worked 12,250
Actual rate per hour $ 7.50
A) $12,250 favorable.
B) $7,000 unfavorable.
C) $6,125 favorable.
D) $7,000 favorable.
E) $6,125 unfavorable.
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. @ $7/hr.) $ 28 per unit
Actual hours worked 12,250
Actual rate per hour $ 7.50
A) $7,000 unfavorable.
B) $7,000 favorable.
C) $6,125 unfavorable.
D) $12,250 favorable.
E) $6,125 favorable.
86) Use the following data to find the direct labor efficiency variance if the company produced 3,500
units during the period.
Direct labor standard (4 hrs. @ $7/hr.) $ 28 per unit
Actual hours worked 12,250
Actual rate per hour $ 7.50
A) $12,250 favorable.
B) $6,125 unfavorable.
C) $6,125 favorable.
D) $7,000 unfavorable.
E) $7,000 favorable.
87) Use the following data to find the direct labor rate variance if the company produced 7,000 units of
product during the period.
Standard:
Direct labor (3.2 hrs. per unit @ $7/hr.)
Actual cost incurred:
$ 22.40
per unit
Direct labor (24,500 hrs. @ $7.50/hr.)
$ 183,750
A) $14,700 unfavorable.
B) $14,700 favorable.
C) $26,950 favorable.
D) $12,250 unfavorable.
E) $12,250 favorable.
88) The following company information is available for March. The direct materials price variance is:
Direct materials purchased and used 2,500 feet @ $55 per foot
Standard costs for direct materials for March production 2,600 feet @ $53 per foot
A) $5,000 favorable.
B) $5,200 unfavorable.
C) $5,000 unfavorable.
D) $300 favorable.
E) $5,200 favorable.
89) The following company information is available. The direct materials quantity variance is:
Direct materials used for production 36,000 gallons
Standard quantity for units produced 34,400 gallons
Standard cost per gallon of direct material $ 6.00
Actual cost per gallon of direct material $ 6.10
A) $13,200 favorable.
B) $10,000 unfavorable.
C) $10,000 favorable.
D) $13,200 unfavorable.
E) $9,600 unfavorable.
90) Summerlin Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000
units. The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units.
What is the direct materials quantity variance?
A) $450 unfavorable.
B) $400 unfavorable.
C) $2,500 unfavorable.
D) $2,950 unfavorable.
E) $2,550 unfavorable.
91) Summerlin Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000
units. The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units.
What is the direct materials price variance?
A) $2,500 unfavorable.
B) $400 unfavorable.
C) $2,550 unfavorable.
D) $2,950 unfavorable.
E) $450 unfavorable.
60
92) A company has established 5 pounds of Material J at $2 per pound as the standard for the material
in its Product Z. The company has just produced 1,000 units of this product, using 5,200 pounds of
Material J that cost $9,880. The direct materials quantity variance is:
A) $120 favorable.
B) $400 unfavorable.
C) $520 unfavorable.
D) $520 favorable.
E) $400 favorable.
