41. The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are as follows: Standard Costs Direct materials 2,600 kilograms @ $8.00 Actual Costs Direct materials 2,500 kilograms @ $8.75 The amount of the direct materials quantity variance is: a. $875 favorable b. $800 unfavorable c. $800 favorable d. $875 unfavorable
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
____ 41. The
|
Standard Costs |
|
|
Direct materials |
2,600 kilograms @ $8.00 |
|
|
|
|
|
|
|
Actual Costs |
|
|
Direct materials |
2,500 kilograms @ $8.75 |
The amount of the direct materials quantity variance is:
|
a. |
$875 favorable |
|
b. |
$800 unfavorable |
|
c. |
$800 favorable |
|
d. |
$875 unfavorable |
____ 42. Which of the following conditions would cause the break-even point to increase?
|
a. |
Total fixed costs increase |
|
b. |
Unit selling price increases |
|
c. |
Unit variable cost decreases |
|
d. |
Total fixed costs decrease |
____ 43. The management of Breuer Corporation is considering the purchase of a new machine costing $375,000. The company's desired
|
Year |
Income from Operations |
Net Flow |
|
1 |
$18,750 |
$93,750 |
|
2 |
18,750 |
93,750 |
|
3 |
18,750 |
93,750 |
|
4 |
18,750 |
93,750 |
|
5 |
18,750 |
93,750 |
The
|
a. |
Negative $118,145 |
|
b. |
Positive $118,145 |
|
c. |
Positive $19,875 |
|
d. |
Negative $19,875 |
____ 44. Which of the following is NOT a cost concept commonly used in applying the cost-plus approach to product pricing?
|
a. |
Total cost concept |
|
b. |
Product cost concept |
|
c. |
Variable cost concept |
|
d. |
Fixed cost concept |
____ 45. If the expected sales volume for the current period is 7,000 units, the desired ending inventory is 300 units, and the beginning inventory is 200 units, the number of units set forth in the production budget, representing total production for the current period, is:
|
a. |
7,000 |
|
b. |
6,900 |
|
c. |
7,100 |
|
d. |
7,200 |
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