QUESTION 1
On the Direct Materials Budget, the total number of direct materials needed is computed as:
a. |
Quantity needed for production + desired ending inventory of DM - beginning inventory of DM |
|
b. |
Units to be produced + desired ending inventory of DM - beginning inventory of DM |
|
c. |
Quantity needed for production - desired ending inventory of DM + beginning inventory of DM |
|
d. |
Units to be produced - desired ending inventory of DM + beginning inventory of DM |
2.5 points
QUESTION 2
Loyal Pet Company expects to sell 5,000 dog treats in Januray, and 9,000 treats in February for $3 each. What would be the total Sales Revenue reflected in the Sales Budget for those months?
a. |
January $27,000; February $15,000 |
|
b. |
January $15,000; February $27,000 |
|
c. |
January $3,000; February $1,667 |
|
d. |
January $1,667; February $3,000 |
2.5 points
QUESTION 3
Kuttrit Company has beginning inventory of 15,000 units, and expected Sales of 23,000 units. If the desired ending inventory is 18,000 units, how many units should be produced?
a. |
10,000 |
|
b. |
20,000 |
|
c. |
56,500 |
|
d. |
26,000 |
2.5 points
QUESTION 4
Totts company produces Jump Ropes. It has the following Sales Projections for the upcoming year:
First Quarter Budgeted Jump Rope Sales in Units: 25,000
Second Quarter Budgeted Jump Rope Sales in Units: 80,000
Third Quarter Budgeted Jump Rope Sales in Units: 16,000
Fourth Quarter Budgeted Jump Rope Sales in Units: 26,000
Inventory at the beginning of the year was 4,400 Jump Ropes. Totts Company wants to have 10% of the next quarter's sales in units on hand at the end of each quarter. How many Jump Ropes should the company produce during the first quarter?
a. |
25,000 |
|
b. |
20,600 |
|
c. |
28,600 |
|
d. |
37,400 |
2.5 points
QUESTION 5
Jackson Industries has collected the following data for one of its products:
Direct Materials Standard (6 pounds per unit @ 55 cents per pound)
Actual Direct Materials Purchased was 38,000 pounds
Actual Direct Materials Used was 35,000 pounds
Actual Price paid per pound was 60 cents
How much is the Direct Materials Price Variance?
a. |
$1,900 (Unfavorable) |
|
b. |
$1,750 (Favorable) |
|
c. |
$1,900 (Favorable) |
|
d. |
$1,750 (Unfavorable) |
Answer:
1. Option (A)is correct.
direct materials utilisation for a period= produced goods- ending inventory + closing inventory
2. january sales revenue= 5000*$3= $15,000 and
february sales= 9000*$3= $27,000
Option B is correct (January $15,000; February $27,000)
3. Option D is correct i.e 26,000 units
Beginning inventory | 15,000 Units |
Expected Sales | 23,000 Units |
Desired ending inventory | 18,000 units |
Units to be produced = Desired ending inventory – Beginning inventory + Expected Sales | |
= 18,000 – 15,000 + 23,000 = 26,000 units |
4. Option C is correct i.e 28,600 jump ropes
Beginning inventory | 4,400 jump ropes |
Expected Sales (1st qtr) | 25,000 jump ropes |
Desired ending inventory | 8,000 jump ropes |
(10% of 2nd qtrs.exp sales) – 80,000 * (10/100) | |
Units to be produced (During the First Qtr)= Desired ending inventory – Beginning inventory + Expected Sales | |
= 8000 – 4400 + 25000 = 28,600 jump ropes |
5.Option A is correct i.e $ 1,900 unfavorable.
Direct materials price variance = ( Standard price per unit - Actual price per unit) x Actual quantity purchased |
= $ ( 0.55 - 0.60) x 38,000 pounds = |
= $ 1,900 unfavorable. |
. |
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