$30.00 Please help with this assignment - accounting!
1. A materials quantity variance is calculated as the difference between the standard direct
materials price and the actual direct materials price multiplied by the actual quantity of
direct materials used. ________
2. Standard cost + price variance + quantity variance = Budgeted cost. ________
3. The overhead controllable variance relates primarily to fixed overhead costs. ________
4. The flexible budget report evaluates a manager's performance in two areas: (1)
production and (2) costs. ________
5. The manager of an investment center can improve ROI by reducing average operating
6. The comparison of differences between actual and planned results
a. is done by the external auditors.
b. appears on the company's external financial statements.
c. is usually done orally in departmental meetings.
d. appears on periodic budget reports.
7. A static budget report
a. shows costs at only 2 or 3 different levels of activity.
b. is appropriate in evaluating a manager's effectiveness in controlling variable costs.
c. should be used when the actual level of activity is materially different from the master
budget activity level.
d. may be appropriate in evaluating a manager's effectiveness in controlling costs when the
behavior of the costs in response to changes in activity is fixed.
8. Top management's reaction to a difference between budgeted and actual sales often
a. whether the difference is favorable or unfavorable.
b. whether management anticipated the difference.
c. the materiality of the difference.
d. the personality of the top managers.
9. A standard which represents an efficient level of performance that is attainable under
expected operating conditions is called
a. ideal standard.
b. loose standard.
c. tight standard.
d. normal standard.
10. A manufacturing company would include setup and downtime in their direct
a. materials price standard.
b. materials quantity standard.
c. labor price standard.
d. labor quantity standard.
Problems (80 Points)
11. Lloyd Inc. manufactures and sells a nutrition drink for children. It wants to develop a
standard cost per gallon. The following are required for production of a 100 gallon batch:
1,960 ounces of lime Kool-Drink at $.10 per ounce
40 pounds of granulated sugar at $.60 per pound
63 kiwi fruit at $.50 each
100 protein tablets at $.90 each
4,000 ounces of water at $.002 per ounce
Lloyd estimates that 2% of the lime Kool-Drink is wasted, 20% of the sugar is lost, and 10% of the kiwis cannot be used.
Compute the standard cost of the ingredients for one gallon of the nutrition drink.
12. Kwik Repair Service, Inc. is trying to establish the standard labor cost of a typical engine tune-up. The following data have been collected from time and motion studies conducted over the past month.
Actual time spent on the tune-up 1.0 hour
Hourly wage rate $12
Payroll taxes 10% of wage rate
Setup and downtime 10% of actual labor time
Cleanup and rest periods 20% of actual labor time
Fringe benefits 25% of wage rate
(a) Determine the standard direct labor hours per tune-up
(b) Determine the standard direct labor hourly rate.
(c) Determine the standard direct labor cost per tune-up.
(d) If a tune-up took 1.5 hours at the standard hourly rate, what was the direct labor?
13. Data concerning manufacturing overhead for Barkley Company are presented below. The Mixing Department is a cost center.
An analysis of the overhead costs reveals that all variable costs are controllable by the manager of the Mixing Department and that 50% of supervisory costs are controllable at the department level.
The flexible budget formula and the cost and activity for the months of July and August
are as follows:
Flexible Budget Per
Direct Labor Hour Actual Costs and Activity
Direct labor hours 6,000 7,000
Indirect materials $3.50 $ 20,500 $ 25,100
Indirect labor 6.00 39,500 40,700
Factory supplies 1.00 7,600 8,200
Depreciation $20,000 15,000 15,000
Supervision 25,000 23,000 26,000
Property taxes 10,000 12,000 12,000
Total costs $117,600 $127,000
(a) Prepare the responsibility reports for the Mixing Department for each month.
(b) Comment on the manager's performance in controlling costs during the two month
14. The East Division, a profit center of Baden Engineering Company, reported the following
data for the first quarter of 2011:
Variable costs 4,200,000
Controllable direct fixed costs 800,000
Noncontrollable direct fixed costs 530,000
Indirect fixed costs 200,000
(a) Prepare a performance report for the manager of the East Division.
(b) What is the best measure of the manager's performance? Why?
(c) How would the responsibility report differ if the division was an investment center?
15. Ramirez Manufacturing Inc. has three divisions which are operated as profit centers.
Actual operating data for the divisions listed alphabetically are as follows.
Operating Data Women's Shoes Men's Shoes Children's Shoes
Contribution margin $210,000 (3) $200,000
Controllable fixed costs 100,000 (4) (5)
Controllable margin (1) $ 90,000 96,000
Sales 600,000 480,000 (6)
Variable costs (2) 330,000 250,000
(a) Compute the missing amounts. Show computations.
(b) Prepare a responsibility report for the Women's Shoe Division assuming (1) the data are
for the month ended June 30, 2011, and (2) all data equal budget except variable costs
which are $15,000 over budget.
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