Dillon has a standard of 2 hours of labor per unit, at $18 per hour. In producin
ID: 2377034 • Letter: D
Question
Dillon has a standard of 2 hours of labor per unit, at $18 per hour. In producing 2,000 units, Dillon used 3,850 hours of labor at a total cost of $70,455. Dillon's labor price variance is
$1,555 F.
$1,200 U.
$2,895 F.
$1,155 U
Dillon has a standard of 2 hours of labor per unit, at $18 per hour. In producing 2,000 units, Dillon used 3,850 hours of labor at a total cost of $70,455. Dillon's labor quantity variance is
$1,555 F.
$1,155 U.
$2,700 F.
$2,895 F.
Budgeted overhead for Cinnabar Industries at normal capacity of 30,000 direct labor hours is $4.50 per hour variable and $3 per hour fixed. In May, $232,500 of overhead was incurred in working 31,500 hours when 32,000 standard hours were allowed. The overhead controllable variance is
$1,500 favorable.
$7,500 favorable.
$7,500 unfavorable.
$3,750 favorable.
Budgeted overhead for Cinnabar Industries at normal capacity of 30,000 direct labor hours is $4.50 per hour variable and $3 per hour fixed. In May, $232,500 of overhead was incurred in working 31,500 hours when 32,000 standard hours were allowed. The overhead volume variance is
$7,500 favorable.
$8,250 favorable.
$6,000 favorable.
$3,750 favorable
Which of the following is true if a company can accept a special order without affecting its regular sales and is within plant capacity?
Additional fixed costs will probably be incurred.
Net income will decrease.
Net income will not be affected.
Net income will increase if the special sales price per unit exceeds the unit variable costs.
Cara Industries incurred the following costs for 50,000 units:
Variable costs
$90,000
Fixed costs
120,000
Cara has received a special order from a foreign company for 5,000 units. There is sufficient capacity to fill the order without jeopardizing regular sales. Filling the order will require spending an additional $4,250 for shipping.
If Cara wants to earn $4,000 on the order, what should the unit price be?
$1.65
$5.85
$2.60
$3.45
A company has a process that results in 15,000 pounds of Product A that can be sold for $16 per pound. An alternative would be to process Product A further at a cost of $200,000 and then sell it for $28 per pound. Should management sell Product A now or should Product A be processed further and then sold? What is the effect of the action?
Process further, the company will be better off by $20,000.
Sell now, the company will be better off by $200,000.
Sell now, the company will be better off by $20,000.
Process further, the company will be better off by $180,000.
Tram Manufacturing is starting business and is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $160 and Tram would sell it for $360. The cost to assemble the product is estimated at $72 per unit and Tram believes the market would support a price of $464 on the assembled unit. What is the correct decision using the sell or process further decision rule?
Process further, the company will be better off by $32 per unit.
Sell before assembly, the company will be better off by $72 per unit.
Sell before assembly, the company will be better off by $104 per unit.
Process further, the company will be better off by $104 per unit.
A company is considering replacing old equipment with new equipment. Which of the following is a relevant cost for incremental analysis?
Annual depreciation charge on the old equipment
Book value of the old equipment
Estimated annual depreciation of the new equipment
Cost of the new equipment
$1,555 F.
Explanation / Answer
Dear student, only one question is allowed at a time. I am answering the first question
Direct labor price variance
= Actual Quantity x Actual Rate -? Actual Quantity x Standard Rate
= Actual cost - Actual Quantity x Standard Rate
= $70,455 – 3,850 x $18
= $70,455 - $69,300
= $1,155 Unfavorable
The variance is unfavorable as the actual rate is more than the standard rate
So, as per above calculations, option D is the correct option
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