Auditing

Tommy’s Toys produces two types of toys: trains and dolls. Tommy’s uses stainless steel to manufacture the trains and plastic to manufacture the dolls. Information regarding the usage of steel and plastic for the past year follows:

Product Names Steel Plastic
Direct materials information
Standard pounds per unit 1 lb. 0.5 lb.
Standard price per pound $1.50 ?
Actual quantity used per unit 1.5 lbs. 0.75 lbs.
Actual price paid for material $1.25 $2.00
Actual quantity purchased and used 2,500 lbs. 1,200 lbs.
Price variance ? $900 F
Quantity variance $206 U ?
Flexible budgent variance ? $522 F
Number of units produced 275 550

What is the direct materials flexible budget variance for steel used to manufacture the trains?

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A) $419 unfavorable

B) $419 favorable

C) $831 unfavorable

D) $831 favorable

18.            The standard cost card for a product shows that the product should use 4 kilograms of material B per finished unit and that the standard price of material B is $4.50 per kilogram. During April, when the budgeted production level was 1,000 units, 1,040 units were actually made. A total of 4,100 kilograms of material B were used in production and the inventories of material B were reduced by 300 kilograms during April. The total cost of material B purchased during April was $14,400. The material variances for material B during April were:

A. Option A
B. Option B
C. Option C
D. Option D

19.            The Porter Company has a standard cost system. In July the company purchased and used 22,500 pounds of direct material at an actual cost of $53,000; the materials quantity variance was $1,875 Unfavorable; and the standard quantity of materials allowed for July production was 21,750 pounds. The materials price variance for July was:
A. $2,725 F
B. $2,725 U
C. $3,250 F
D. $3,250 U

20.             Cox Company uses standard costing. The following data are available for April:

 

The standard quantity of material allowed for April production is:
A. 14,200 gallons
B. 12,700 gallons
C. 11,700 gallons
D. 10,200 gallons

21.            The Reedy Company uses a standard costing system. The following data are available for November:

The actual direct labor rate for November is:
A. $8.80
B. $8.90
C. $9.00
D. $9.20

Answer the following questions using the information below:

Russo Corporation manufactured 16,000 air conditioners during November. The overhead cost-allocation base is $31.50 per machine-hour. The following variable overhead data pertain to November:

Actual    Budgeted

Production                                   16,000 units 18,000 units

Machine-hours                             7,875 hours 9,000 hours

Variable overhead cost per machine-hour: $31.00   $31.50

22.            What is the variable overhead spending variance?

A) $4,500 unfavorable

B) $3,937.50 unfavorable

C) $4,500 favorable

D) $3,937.50 favorable

23.            What is the total variable overhead variance?

A) $7,875 unfavorable

B) $3,937.50 f unfavorable

C) $7,875 favorable

D) $3,937.50 f favorable

24.            Dosier Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company has provided the following data for the most recent month:

 

What was the fixed manufacturing overhead spending variance for the month?
A. $2,000 unfavorable
B. $2,000 favorable
C. $610 unfavorable
D. $610 favorable

 

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