Question 25 Figure 10-1. Jason, Inc. produces leather purses. Jason has develope
ID: 2441813 • Letter: Q
Question
Question 25
Figure 10-1.
Jason, Inc. produces leather purses. Jason has developed a static budget for the first quarter, based on 20,000 direct labor hours. During the quarter, the actual activity was 22,000 direct labor hours. Data for the first quarter are summarized as follows:
Static budget
(20,000 hours)
Actual costs
(22,000 hours)
Direct Materials
$ 80,000
$ 87,000
Direct labor
160,000
174,000
Rent
48,000
50,000
Total
$288,000
$311,000
Refer to Figure 10-1. Comparing the static budget to the actual outcomes, we can say the following:
Answer
the manager had more direct labor hours.
the variances are all unfavorable.
the comparison is not useful for assessing managerial efficiency.
a flexible budget should be used for assessing efficiency.
all of these.
Question 26
Figure 10-1.
Jason, Inc. produces leather purses. Jason has developed a static budget for the first quarter, based on 20,000 direct labor hours. During the quarter, the actual activity was 22,000 direct labor hours. Data for the first quarter are summarized as follows:
Static budget
(20,000 hours)
Actual costs
(22,000 hours)
Direct Materials
$ 80,000
$ 87,000
Direct labor
160,000
174,000
Rent
48,000
50,000
Total
$288,000
$311,000
Refer to Figure 10-1. what is the flexible budget variance for the first quarter?
Answer
$1,000 U
$23,000 U
$1,000 F
$23,000 U
none of these
Question 27
Figure 10-1.
Jason, Inc. produces leather purses. Jason has developed a static budget for the first quarter, based on 20,000 direct labor hours. During the quarter, the actual activity was 22,000 direct labor hours. Data for the first quarter are summarized as follows:
Static budget
(20,000 hours)
Actual costs
(22,000 hours)
Direct Materials
$ 80,000
$ 87,000
Direct labor
160,000
174,000
Rent
48,000
50,000
Total
$288,000
$311,000
Refer to Figure 10-1. What is the flexible budget amount for the first quarter?
Answer
$288,000
$311,000
$312,000
$261,000
Cannot be determined
Question 28
During the year, Hawkings a subsidiary of Jason Inc. produced 10,000 units, used 20,000 direct labor hours, and incurred variable overhead of $90,000. Budgeted variable overhead for the year was $88,000. The hours allowed per unit are 2.1. The standard variable overhead rate is $4.00 per direct labor hour. The variable overhead spending variance is:
Answer
$2,000 F.
$6,000 U.
$10,000 U.
$2,000 U.
none of these.
Explanation / Answer
Question 25 All of these Question 26 Flexible Budget Variance 311,000-288,000 = 23,000 (U ) Question 27 Cannot be determined. The data is insufficient as regards material. Question 28 Variable Over Head Spending Variance (90,000 - 88,000 ) = 2000 (U )
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