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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.
the beginning inventory of finished goods.
the required materials purchases for the period.
the desired ending inventory of finished goods.
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
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
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.
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.
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.
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
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
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
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.
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
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.
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
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.
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
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:
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 |
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 -
Question 1
4 / 4 pts
The direct labor budget is based on:
Correct!
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.
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
Correct!
$5,100
$5,160
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
Correct!
26,800 mugs
34,300 mugs
23,200 mugs
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.
You Answered
rolling budget.
Correct answer
flexible budget.
monthly budget.
0 / 4 pts
The variance that is usually most useful in assessing the performance of the purchasing department manager is:
Correct answer
the materials price variance.
You Answered
the materials quantity variance.
the labor efficiency variance.
the labor rate variance.
4 / 4 pts
The usual starting point for a master budget is:
the budgeted income statement.
Correct!
the sales forecast or sales budget.
the direct materials purchase budget.
the production budget.
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
Correct!
24,000
31,000
32,000
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
Correct!
$2,740 U
$2,482 F
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:
Correct!
$98,500
$27,500
$71,000
$115,500
4 / 4 pts
When preparing a production budget, the required production equals:
Correct!
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.
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
Correct!
Option C
4 / 4 pts
Which of the following would produce a labor rate variance?
Correct!
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.
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
Correct!
450,000 units
440,000 units
4 / 4 pts
An unfavorable materials quantity variance indicates that:
Correct!
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.
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
Correct!
$3,675 Unfavorable
$1,575 Favorable
$2,625 Unfavorable
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:
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 |
Answer 1:
Correct!11,300
Correct answer
11300
Answer 2:
Correct!$103
Correct answer
103
Correct answer
$103.00
Answer 3:
Correct!$1,163,900
Correct answer
1,163,900
Correct answer
$1163900
Correct answer
1163900
Answer 4:
Correct!11,300
Correct answer
11300
Answer 5:
Correct!980
Answer 6:
Correct!12,280
Correct answer
12280
Answer 7:
Correct!(1,130)
Correct answer
1,130
Correct answer
-1,130
Correct answer
1130
Correct answer
(1130)
Correct answer
-1130
Answer 8:
Correct!11,150
Correct answer
11150
Answer 9:
Correct!11,150
Correct answer
11150
Answer 10:
Correct!2
Answer 11:
Correct!22,300
Correct answer
22300
Answer 12:
Correct!2,020
Correct answer
2020
Answer 13:
Correct!24,320
Correct answer
24320
Answer 14:
Correct!(2,230)
Correct answer
2,230
Correct answer
-2,230
Correct answer
2230
Correct answer
(2230)
Correct answer
-2230
Answer 15:
Correct!22,090
Correct answer
22090
Answer 16:
Correct!$4
Correct answer
$4.00
Correct answer
4
Correct answer
4.00
Answer 17:
Correct!$88,360
Correct answer
88,360
Correct answer
$88360
Correct answer
88360
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 -
Answer 1:
Correct!(21,750)
Correct answer
-$21,750
Correct answer
-$21750
Correct answer
($21,750)
Correct answer
($21750)
Correct answer
-21,750
Correct answer
-21750
Correct answer
(21750)
Answer 2:
Correct!22,000
Correct answer
22000
Correct answer
$22,000
Correct answer
$22000
Answer 3:
Correct!31,020
Correct answer
31020
Correct answer
$31,020
Correct answer
$31020
Answer 4:
Correct!(6,300)
Correct answer
-6,300
Correct answer
-6300
Correct answer
(6300)
Correct answer
-$6,300
Correct answer
-$6300
Correct answer
($6,300)
Correct answer
($6300)
