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1. Hettinger Hospital bases its budgets on patient-visits. The hospital's static budget for March appears below:

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1. Hettinger Hospital bases its budgets on patient-visits. The hospital's static budget for March appears below:

 

Budgeted number of patient-visits

8,500  

  Budgeted variable costs:

 

  Supplies (@ $9.60 per patient-visit)

$ 81,600  

  Laundry (@ $9.30 per patient-visit)

79,050  

  Total variable cost

160,650  

  Budgeted fixed costs:

 

  Wages and salaries

99,800  

  Occupancy costs

107,800  

  Total fixed cost

207,600  

  Total cost

$368,250  

 

The total variable cost at the activity level of 8,600 patient-visits per month should be:

            A. $160,650

            B. $209,930

            C. $207,600

            D. $162,540

 

2. Epley Corporation makes a product with the following standard costs:

 

Standard Quantity or Hours

Standard Price or Rate

  Direct materials

                 2.0 pounds

           $7.00 per pound

  Direct labor

                 1.2 hours

           $12.00 per hour

  Variable overhead

                 1.2 hours

           $2.00 per hour

 

In July the company produced 4,900 units using 10,300 pounds of the direct material and 2,280 direct labor-hours. During the month, the company purchased 10,870 pounds of the direct material at a cost of $76,750. The actual direct labor cost was $38,240 and the actual variable overhead cost was $11,941.

 

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

 

The materials quantity variance for July is:

            A. $520 U

            B. $660 F

            C. $3,500 U

            D. $520 F

 

 

 

 

3. Epley Corporation makes a product with the following standard costs:

 

Standard Quantity or Hours

Standard Price or Rate

  Direct materials

10.5 pounds

$10.0 per pound

  Direct labor

0.8 hours

$33.00 per hour

  Variable overhead

0.8 hours

$15.50 per hour

 

In July the company produced 3,440 units using 13,760 pounds of the direct material and 2,872 direct labor-hours. During the month, the company purchased 14,520 pounds of the direct material at a cost of $35,100. The actual direct labor cost was $94,363 and the actual variable overhead cost was $42,684.

 

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

 

The labor rate variance for July is:

            A. $413 F

            B. $413 U

            C. $3,547 U

            D. $3,547 F

 

4. Pardoe, Inc., manufactures a single product in which variable manufacturing overhead is assigned on the basis of standard direct labor-hours. The company uses a standard cost system and has established the following standards for one unit of product:

 

Standard Quantity

Standard Price or Rate

Standard Cost

  Direct materials

2.0 pounds

$6.25 per pound

$12.50

  Direct labor

0.5 hours

$19 per hour

$9.5

  Variable manufacturing overhead

0.5 hours

$4.50 per hour

$2.25

 

During March, the following activity was recorded by the company:

 

  • The company produced 5,600 units during the month.
  • A total of 14,700 pounds of material were purchased at a cost of $41,160.
  • There was no beginning inventory of materials on hand to start the month; at the end of the month, 2,940 pounds of material remained in the warehouse.
  • During March, 3,000 direct labor-hours were worked at a rate of $19.50 per hour.
  • Variable manufacturing overhead costs during March totaled $6,950

 

The direct materials purchases variance is computed when the materials are purchased.

 

The materials price variance for March is:

A. $50,715 U

            B. $22,960 F

            C. $22,960 U

            D. $50,715 F

5. Oddo Corporation makes a product with the following standard costs:

 

Standard Quantity or Hours

Standard Price or Rate

Standard Cost Per Unit

  Direct materials

3.0 ounces

   $7.10 per ounce

$21.30          

  Direct labor

0.6 hours

   $21.00 per hour

$12.60          

  Variable overhead

0.6 hours

   $6.00 per hour

$3.60

 

The company reported the following results concerning this product in December.

Originally budgeted output

4,410  

  units

  Actual output

4,210  

  units

  Raw materials used in production

13,000  

  ounces

  Actual direct labor-hours

14,690  

  hours

  Purchases of raw materials

2,896  

  ounces

  Actual price of raw materials

 $6.90  

  per ounce

  Actual direct labor rate

$18.40  

  per hour

  Actual variable overhead rate

$6.10  

  per hour

 

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

 

The materials quantity variance for December is:

A. $2,627 U

            B. $2,553 F

            C. $2,627 F

            D. $2,553 U

 

6. Oddo Corporation makes a product with the following standard costs:

 

Standard Quantity or Hours

Standard Price or Rate

Standard Cost Per Unit

  Direct materials

3.0 ounces

$8.50 per ounce

$25.50

  Direct labor

0.8 hours

$14.50 per hour

$11.60

  Variable overhead

0.8 hours

$7.00 per hour

$5.60

 

The company reported the following results concerning this product in December.

 Originally budgeted output

8,400 

 units

  Actual output

8,200 

 units

  Raw materials used in production

24,360 

 ounces

  Actual direct labor-hours

6,760 

 hours

  Purchases of raw materials

25,960 

 ounces

  Actual price of raw materials

8.25 

 per ounce

  Actual direct labor rate

15.60 

 per hour

  Actual variable overhead rate

7.10 

 per hour

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

 

The materials price variance for December is:

A. $8,130 U

            B. $8,130 F

            C. $6,490 F

            D. $6,490 U

 

7. Oddo Corporation makes a product with the following standard costs:

 

Standard Quantity or Hours

Standard Price or Rate

Standard Cost Per Unit

  Direct materials

3.0 ounces

   $7.10 per ounce

$21.30

  Direct labor

0.6 hours

   $21.00 per hour

$12.60

  Variable overhead

0.6 hours

   $6.00 per hour

$3.60

 

The company reported the following results concerning this product in December.

Originally budgeted output

4,410  

  units

  Actual output

4,210  

  units

  Raw materials used in production

13,000  

  ounces

  Actual direct labor-hours

2,896  

  hours

  Purchases of raw materials

14,690  

  ounces

  Actual price of raw materials

$6.90  

  per ounce

  Actual direct labor rate

$18.40  

  per hour

  Actual variable overhead rate

$6.10  

  per hour

 

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

 

The variable overhead efficiency variance for December is:

A. $2,257 F

            B. $2,220 U

            C. $2,220 U

            D. $2,257 F

 

8. Oddo Corporation makes a product with the following standard costs:

 

Standard Quantity or Hours

Standard Price or Rate

Standard Cost Per Unit

  Direct materials

3.0 ounces

   $8.90 per ounce

$26.70

  Direct labor

0.7 hours

   $25.00 per hour

$17.50

  Variable overhead

0.6 hours

   $4.00 per hour

$2.40

 

 

 

The company reported the following results concerning this product in December.

 Originally budgeted output

4,590  

  units

  Actual output

4,390  

  units

  Raw materials used in production

13,490  

  ounces

  Actual direct labor-hours

15,360  

  hours

  Purchases of raw materials

2,954  

  ounces

  Actual price of raw materials

$8.70  

  per ounce

  Actual direct labor rate

$20.20  

  per hour

  Actual variable overhead rate

$4.10  

  per hour

 

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.                                                                                    

 

The variable overhead rate variance for December is:

A. $295 U

            B. $295 F

            C. $263 F

            D. $263 U

 

9. Midgley Corporation makes a product whose direct labor standards are 0.6 hours per unit and $20 per hour. In April the company produced 6,950 units using 3,670 direct labor-hours. The actual direct labor cost was $77,070.

 

The labor efficiency variance for April is:

A. $10,000 U

            B. $10,000 F

            C. $6,330 F

            D. $6,330 U

 

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