Question - Bexley Company produces retractable pens. November budgeted production costs are given below:
Pens to be produced 100,000
Direct material (variable) $33,000
Direct Labor (variable) $48,000
Supplies (variable) $27,500
Supervision (fixed) $40,000
Depreciation (fixed) $20,000
Other (fixed) $10,000
1. In December, Bexley expects to produce 90,000 pens. Assuming no structural changes, what is Bexley's budgeted production cost per pen for December?
A) $1.72
B) $1.85
C) $1.89
D) $1.93
2. Use the cost information in (1) above. In November, the actual direct labor costs were $46,000 and Bexley produced and sold 90,000 pens. The direct labor performance variance (difference) is:
A) $5,000 unfavorable.
B) $2,800 unfavorable.
C) $1,000 unfavorable.
D) $5,000 favorable.
3. Bubba's steakhouse has budgeted the following costs for a month in which 1,600 steak dinners will be sold: Materials, $4,080; hourly labor (variable), $5,200; rent (fixed), $1,720; depreciation, $600; and other fixed costs, $550. Each dinner sells for $12.60. How much would Bubba's profit increase if 10 more dinners were sold?
A) $68.
B) $72.
C) $52.
D) $126.