The difference between actual quantity used and the standard quantity allowed re
ID: 2499604 • Letter: T
Question
The difference between actual quantity used and the standard quantity allowed results in a:
Standard variance.
Budget variance.
Quantity variance.
Price variance.
Cameroon Corp. manufactures and sells electric staplers for $16 each. If 10,000 units were sold in December, and management forecasts 4% growth in sales each month, the number of electric stapler sales budgeted for March should be:
10,000
11,249
10,816
11,000
Bengal Co. provides the following sales forecast for the next three months:
July
August
September
Sales units
5,000
5,700
5,560
The company wants to end each month with ending finished goods inventory equal to 25% of the next month’s sales. Finished goods inventory on June 30 is 1,250 units. The budgeted production units for July are:
6,250 units.
6,425 units.
2,500 units.
5,175 units.
Standard variance.
Budget variance.
Quantity variance.
Price variance.
Explanation / Answer
The difference between actual quantity used and standard quantity allowed results in a QUANTITY VARIANCE December January February March Units sold 10000 10400 10816 11249 Sale Growth of 4 % every month = previous month sale * 104% Hence , the budgeted sale in March would be 11249 closing inventory for July ( 25 % of 5700) 1425 Add : Sales for the month 5000 Less : opening inventory for July 1250 Production for the month 5175
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