Q1. In the standard cost formula Y = a + bX, what does the "b" represent?
1. total cost
2. total fixed cost
3. total variable cost
4. variable cost per unit
Q2. Milnes Corporation has provided the following data concerning its direct labor costs for November:
|
Standard wage rate
|
$13.40 per DLH
|
|
Standard hours
|
5.0 DLHs per unit
|
|
Actual wage rate
|
$14.00 per DLH
|
|
Actual hours
|
20,120 DLHs
|
|
Actual output
|
4,200 units
|
The journal entry to record the incurrence of direct labor costs in November would include the following for Work in Process:
1. Debit of $281,400
2. Credit of $281,680
3. Credit of $281,400
4. Debit of $281,680
Q3. A company produces a single product. The following volume and average cost data for two accounting periods have been provided by management:
|
Number of units
|
500
|
$800
|
|
Direct materials
|
$2.00
|
$2.00
|
|
Direct labor
|
$1.50
|
$1.50
|
|
Manufacturing overhead
|
$2.50
|
$1.75
|
|
Other overhead
|
$1.00
|
$0.625
|
The best estimate for the cost formula for the total cost of producing and selling the product (where X is the number of units produced and sold in a period) is:
1. $1,000 + $1.125 X
2. $1,000 + $3.50 X
3. $1,500 + $3.50 X
4. $1,500 + $4.00 X