Questions 1 20: Select the one best answer to each question.1. The purpose of a

Questions 1 20: Select the one best answer to each question.1. The purpose of a flexible budget is toA. allow management some latitude in meeting goals.B. eliminate cyclical fluctuations in production reports by ignoring variable costs.C. compare actual and budgeted results at virtually every level of production.D. reduce the total time in preparing the annual budget.2. Woodside Company manufactures tables with vinyl tops. The standard material cost for the vinyl used per Style R table is $7.20 based on 8 square feet of vinyl at a cost of $.90 per square foot. A production run of 1000 tables in January resulted in usage of 8300 square feet of vinyl at a cost of $.85 per square foot a total cost of $7055. The quantity variance resulting from this production run wasA. $255 favorable. C. $270 favorable.B. $255 unfavorable. D. $270 unfavorable.3. RHO Company which began its operations on January 1 produces a single product that sells for $10.25 per unit. Standard capacity is 80000 units per year. This year 80000 units were produced and 70000 units were sold.Manufacturing costs and selling and administrative expenses follow: Fixed costs Variable costsRaw materials $2.00 per unit producedDirect labor $1.50 per unit producedFactory overhead $120000 1.00 per unit producedSelling and administrative 80000 0.50 per unit soldWhat is the standard cost of manufacturing a unit of product?A. $4.50 C. $5.50B. $5.00 D. $6.004. Which one of the following items is ignored when establishing an ideal standard?A. Cost of materials C. Vacation timeB. Cost of electricity D. Sick time5. Belo Inc. uses a standard cost system. Overhead cost information for Product CO for the month of October follows:Total actual overhead incurred $14750Fixed overhead budgeted $1800Total standard overhead rate per direct labor hour $4.25Variable overhead rate per direct labor hour $3.75Standard hours allowed for actual production 3400What is the overall (net) overhead variance?A. $100 favorable C. $300 favorableB. $100 unfavorable D. $300 unfavorable6. What type of direct material variances for price and quantity will arise if the actual number of pounds of materials used exceeds standard pounds allowed but actual cost is less than standard cost?Quantity PriceA. Favorable FavorableB. Unfavorable UnfavorableC. Favorable UnfavorableD. Unfavorable Favorable7. Beres Corporation has developed the following flexible budget formula for annual indirect labor cost:Total costs = $9600 + $0.75 per machine hourOperating budgets for the current month are based on 30000 hours of planned machine time. The amount of indirect labor costs included in this planned budget isA. $2425. C. $23300.B. $22500. D. $32100.8. Carlson Co. has a standard material price of $2.80 per unit. During the month of August the cost of direct materials was $2.50 per unit for the 500 units produced. The formula ($2.50 $2.80) 500 yields the _______ variance for Carlson Co.A. combined price-quantity C. volumeB. materials price D. mix9. Donellan Company has a standard and flexible budgeting system and uses a two variance method of analysis of overhead variances. Selected data for the February production activity follows:Budgeted fixed factory overhead costs $70000Actual factory overhead incurred $250000Variable overhead rate per direct labor hour $7Standard direct labor hours 25000Actual direct labor hours 26006The controllable variance for February isA. $5000 favorable. C. $7000 favorable.B. $5000 unfavorable. D. $7000 unfavorable.10. If the total materials variance (actual cost of materials used compared with the standard cost of the standard amount of materials required) for a given operation is favorable why must this variance be further evaluated as to price and usage?A. There s no need to further evaluate the total materials variance if it s favorable.B. Generally accepted accounting principles require that all variances be analyzed in three stages.C. All variances must appear in the annual report to equity owners for proper disclosure.D. Evaluating a favorable variance helps management determine why the variance occurred. 11. The Johns Company budgeted overhead at $125000 for the period for Department A based on a budgeted volume of 50000 direct labor hours. At the end of the period the factory overhead control account for Department A had a balance of $126000. The actual (and allowed) direct labor hours were 52000. What was the overapplied (underapplied) overhead for the period?A. $(4000) C. $(6500)B. $4000 D. $650012. Ben s Climbing Gear Inc. has direct material costs as follows:Actual units of direct materials used 20000Standard price per unit of direct materials $2.50Direct material quantity variance favorable $5000What was Ben s standard quantity of material A. $18000 C. $22000B. $20000 D. $2400013. Overapplied factory overhead would result ifA. the plant was operated at greater than normal capacity.B. the plant was operated at less than normal capacity.C. factory overhead costs incurred were greater than overhead costs charged to production.D. factory overhead costs incurred were less than overhead costs charged to production.14. The direct labor costs for Boundary Company follow:Standard direct labor hours 34000Actual direct labor hours 33500Direct labor efficiency variance favorable $12000Direct labor rate variance favorable $15075Total payroll $252925What was Boundary s standard direct labor rate A. $3.87 C. $10.50B. $8.00 D. $12.0015. Elgin Company s budgeted fixed factory overhead costs are $50000 per month plus a variable factory overhead rate of $4.00 per direct labor hour. The standard direct labor hours allowed for October production were 20000. An analysis of the factory overhead indicates that in October Elgin had an unfavorable budget (controllable)variance of $1500 and a favorable volume variance of $500. Elgin uses a two-variance analysis of overhead variances.The actual factory overhead that Elgin incurred in October isA. $126500. C. $128500.B. $128000. D. $131500.16. Thomas Company uses a standard cost system. Information for raw materials for product RBI for the month of October follows:Standard unit price $1.75Actual purchase price per unit $1.60Actual quantity purchased 4000 unitsActual quantity used 3900 unitsStandard quantity allowed for actual production 3800 unitsWhat is the materials purchase price variance for Thomas Company?A. $15 favorable C. $600 favorableB. $15 unfavorable D. $600 unfavorable17. What type of standard cost is the absolute minimum cost possible under the best conceivable operating conditions?A. Practical C. AttainableB. Ideal D. Normal18. The fixed overhead application rate is a function of a predetermined normal activity level. If standard hours allowed for good output equal this normal activity level for a given period the volume variance will beA. zero.B. favorable.C. unfavorable.D. either favorable or unfavorable depending on the budgeted overhead.19. Alyisa Corporation uses a standard cost system. Direct labor information for product CER for the month of May is as follows: Standard rate $8.00 per hour Actual rate paid $8.20 per hour Standard hours allowed for actual production 1200 hours Labor efficiency variance $800 unfavorableWhat are actual hours worked A. 1100 C. 1330B. 1300 D. 140020. A company experienced $21000 in actual factory overhead incurred. During the same period budgeted factory overhead based on actual hours worked was $19300. The difference between these two amounts $1700 is called the _______ variance.A. volume C. efficiencyB. budget D. quantity