Chapter 22 – Multiple Choice
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Linwood Industries prepared a flexible budget which revealed total production costs of $79,000 at an anticipated 10,000 unit activity level. Variable production costs were (per unit) $1.50 for direct materials, $3.50 for direct labor, and $0.75 for variable factory overhead. How much are total anticipated production costs in Linwood’s flexible budget for an activity level of 10,800 units?CorrectIncorrect
Actual direct labor at Subramaniam Tire during the month of June amounted to 14,000 hours. This compares to the standard direct labor hours for the actual output of 15,000 hours. During June, total actual variable overhead was $32,000. The standard total variable overhead application rate per standard direct labor hour was $2.25. How much was the variable overhead spending variance for June?CorrectIncorrect
If a unit manager made a decision to purchase raw materials that were of superior quality to that which was anticipated, and this decision resulted in less spoilage than normal, the effect on the quantity and price variances, respectively, would be:CorrectIncorrect
Quillen uses a single raw material in its production process. The standard price for a unit of material is $7.00. During October the company purchased and used 10,000 units of this material. The actual purchase price was $8.00 per unit. The standard quantity required per finished product is 3 units. Quillen produced 3,000 finished units of the final product in October. How much was the material price variance for October?CorrectIncorrect
Finch produced 3,000 units of output. The production process normally requires 3 hours of labor per unit of output. The standard labor rate is $7.00 per hour, but Finch paid $6.00 per hour. Actual hours needed to complete the production process were 8,500. How much was the labor efficiency variance?CorrectIncorrect