Question 1: Temme Inc., a retail establishment, expects to sell $450,000 of a particular item in October. Its gross profit percentage is 70 percent. The ending inventory in September of this item cost $18,000 and the company wants an ending inventory of $22,000. How much needs to be purchased?
A) $131,000
B) $139,000
C) $446,000
D) $454,000
Question 2: Salvant's records for March show the following information from its standard costing system:
Standard price per pound of direct material $5
Actual price per pound of direct material $4.75
Direct material purchase price variance $3,500 favorable
Actual output 4,500 units
Standard pounds allowed for actual production 13,500 pounds
Standard cost of direct material purchased $66,500
How much direct material was purchased in March?
A) 14,000 pounds
B) 13,500 pounds
C) 14,500 pounds
D) 13,000 pounds
Question 3: Funke Manufacturing uses a standard cost system for its guitar boxes. The standard labor rate per box is $1 per box. This standard was established on the basis of producing 8 boxes per hour. This month, Funke produced 1,500 boxes using 580 direct labor hours at an actual direct labor cost of $5,800. The direct labor rate variance was
A) $ 1,600 favorable
B) $ 1,160 favorable
C) $ 1,600 unfavorable
D) $ 1,160 unfavorable
Question 4: XYZ Corp. produced 26,000 units of its only product. Machine hours per unit are 2.8. The budget planned for 23,000 units. What are the budgeted machine hours and the flexible-budget machine hours, respectively?
A) 64,400 machine hours; 72,800 machine hours
B) 72,800 machine hours; 64,400 machine hours
C) 68,000 machine hours; 75,000 machine hours
D) 75,000 machine hours; 68,000 machine hours
Use the following to answer questions 5-6:
Grachev Co. manufactures hedge clippers, its only product. The following information relates to the company's manufacturing overhead
for an output of 20,000 clippers:
Budgeted output units 20,000 clippers
Budgeted machine hours 15,000 hours
Budgeted variable manufacturing overhead $ 90,000
Actual output units produced 35,000 clippers
Actual machine hours 25,000 hours
Actual variable manufacturing overhead $166,250
Question 5: What is the variable manufacturing overhead static budget variance (i.e. a flexible budget is not used)?
A) $ 8,750 unfavorable
B) $ 8,750 favorable
C) $76,250 favorable
D) $76,250 unfavorable
Question 6: What is the variable manufacturing overhead total variance?
A) $76,250 unfavorable
B) $16,250 unfavorable
C) $47,500 unfavorable
D) $47,500 favorable
Question 7: Which of the following is a true statement regarding performance evaluation?
A) Managers should be evaluated on those things over which they have influence.
B) Managers should be evaluated on the performance of the entire organization.
C) Sales personnel do not have complete control over the level of sales.
D) Managers should not be evaluated on those things over which they have influence, if they do not have complete control over them.