Homework answers / question archive / Question 1 4 / 4 pts The direct labor budget is based on:   the required production for the period

Question 1 4 / 4 pts The direct labor budget is based on:   the required production for the period

Accounting

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Question 1

4 / 4 pts

The direct labor budget is based on:

 

the required production for the period.

  

the beginning inventory of finished goods.

 

the required materials purchases for the period.

 

the desired ending inventory of finished goods.

 

 

Question 2

4 / 4 pts

For July, White Corporation has budgeted production of 6,000 units. Each unit requires
0.10 direct labor-hours at a cost of $8.50 per direct labor-hour. How much will White
Corporation budget for labor in July?

  

$51,000

   

$600

  

$5,100

  

$5,160

 

 

Question 3

4 / 4 pts

Fab Manufacturing Corporation manufactures and sells stainless steel coffee mugs.
Expected mug sales at Fab (in units) for the next three months are as follows:

	October	November	December
Budgeted unit sales	28,000	25,000	31,000

Fab likes to maintain a finished goods inventory equal to 30% of the next month's estimated sales. How many mugs should Fab plan on producing during the month of November?

  

25,900 mugs

  

26,800 mugs

  

34,300 mugs

  

23,200 mugs

 

 

Question 4

0 / 4 pts

Comparing actual results to a budget based on the actual activity for the period is possible with the use of a:

  

master budget.

  

rolling budget.

  

flexible budget.

  

monthly budget.

 

 

Question 5

0 / 4 pts

The variance that is usually most useful in assessing the performance of the purchasing department manager is:

  

the materials price variance.

  

the materials quantity variance.

  

the labor efficiency variance.

  

the labor rate variance.

 

 

Question 6

4 / 4 pts

The usual starting point for a master budget is:

  

the budgeted income statement.

  

the sales forecast or sales budget.

  

the direct materials purchase budget.

  

the production budget.

 

 

Question 7

4 / 4 pts

Parwin Corporation plans to sell 23,000 units during August. If the company has 8,000 units on hand at the start of the month, and plans to have 9,000 units on hand at the end of the month, how many units must be produced during the month?

  

22,000

  

24,000

  

31,000

  

32,000

 

 

Question 8

4 / 4 pts

Gipple Corporation makes a product that uses a material with the quantity standard of 7.3 grams per unit of output and the standard price of $6.00 per gram. During the month the company purchased 27,400 grams of the direct material at $6.10 per gram. The direct materials purchases variance is computed when the materials are purchased.

 

$2,482 U

  

$2,740 F

  

$2,740 U

 

$2,482 F

 

 

Question 9

4 / 4 pts

The WRT Corporation makes collections on sales according to the following schedule:

25% in month of sale

65% in month following sale

5% in second month following sale

5% uncollectible

The following sales have been budgeted:

	Sales
April	$120,000
May	$100,000
June	$110,000

Budgeted cash collections in June would be:

  

$98,500

  

$27,500

  

$71,000

  

$115,500

 

 

Question 10

4 / 4 pts

When preparing a production budget, the required production equals:

  

budgeted sales − beginning inventory + desired ending inventory.

  

budgeted sales + beginning inventory + desired ending inventory.

  

budgeted sales + beginning inventory − desired ending inventory.

  

budgeted sales − beginning inventory − desired ending inventory.

 

 

Question 11

4 / 4 pts

Which of the following budgets are prepared before the production budget?

	Direct Materials Budget	Sales Budget
A)	Yes	Yes
B)	Yes	No
C)	No	Yes
D)	No	No

  

Option D

  

Option B

  

Option A

  

Option C

 

 

Question 12

4 / 4 pts

Which of the following would produce a labor rate variance?

  

Use of persons with high hourly wage rates in tasks that call for low hourly wage rates.

  

An unfavorable variable overhead rate variance.

  

Poor quality materials causing breakage and work interruptions.

  

Excessive number of hours worked in completing a job.

 

 

Question 13

4 / 4 pts

Paradise Corporation budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels (in units) are planned for next year.

	Beginning Inventory	Ending Inventory
Raw material (in pounds)	40,000	50,000
Finished goods	80,000	50,000

If Paradise Corporation plans to sell 480,000 units during next year, the number of units it would have to produce during the year would be:

  

480,000 units

  

510,000 units

  

450,000 units

  

440,000 units

 

 

Question 14

4 / 4 pts

An unfavorable materials quantity variance indicates that:

  

actual usage of material exceeds the standard material allowed for output.

  

standard material allowed for output exceeds the actual usage of material.

  

standard material price exceeds actual price.

  

actual material price exceeds standard price.

 

 

Question 15

4 / 4 pts

The following information relates to the direct labor at Padmaja Manufacturing, Inc. for March:

	Actual	Standard
Labor cost per hour	$ 18.00	$ 17.50
Labor hours per unit produced	1.5	1.4

During March, Padmaja produced 2,100 units. What is Padmaja's labor efficiency variance for March?

  

$3,780 Unfavorable

   

$3,675 Unfavorable

   

$1,575 Favorable

   

$2,625 Unfavorable

 

 

Question 16

25 / 25 pts

Tsosie Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations:

• The budgeted selling price per unit is $103.
• Budgeted unit sales are:
  • April - 9,300 units
  • May - 11,300 units
  • June - 9,800 units
• The ending finished goods inventory equals 10% of the following month's sales.
• The ending raw materials inventory equals 10% of the following month's raw materials production needs. Each unit of finished goods requires 2 pounds of raw materials. The raw materials cost $4.00 per pound.
• June's total pounds required for production is 20,200. (Hint: you need this to compute desired ending inventory for Direct Materials Budget)

Prepare a sales budget, production budget, direct materials budget for the month of May. (Use $ for amounts in dollars, and do not use a $ for amounts in units. And use only whole dollars, no cents. Also, include the comma for to separate the thousands, i.e. 20,000)

Sales Budget
		May
Expected Sales (units)
Sales Price per Unit
Total Sales Revenue

 

Production Budget
		May
Expected Sales (in units)
Desired Ending Inventory
Total Required Units
Beginning Inventory
Required Production

 

Direct Materials Budget
		May
Units to Be Produced
Direct Material per Unit
Total Pounds Needed for Production
Desired Ending Inventory
Total Material Required
Beginning Inventory
Pounds of Direct Material Purchase Requirements
Cost per Pound
Total Cost of Direct Material Purchase

 

 

 

Question 17

15 / 15 pts

Zee Corporation has developed the following cost standards for the production of its leather backpacks:

	Standard Quantity	Standard Cost
Leather	0.9 yards	$22 per yard
Direct Labor	1.3 hours	$9 per hour

 

Actual amounts
Number of backpacks produced	15,000
Direct labor hours incurred	18,800
Yards of leather used	14,500
Cost of leather purchased	$20.50 per yard
Direct labor cost	$10.65 per hour

What are the following variances (You do not need to say Unfavorable or Favorable, if it is Unfavorable it is a positive amount, if it is Favorable be sure to show it as a negative amount. Also, include the comma for to separate the thousands, i.e. $20,000.)

Materials price variance - 

Materials quantity variance - 

Labor rate variance - 

Labor efficiency variance -