22. The following data is given for the Stringer Company: Budgeted production 917 units Actual production...
22.
The following data is given for the Stringer Company:
| Budgeted production | 917 units |
| Actual production | 1,002 units |
| Materials: | |
| Standard price per ounce | $1.75 |
| Standard ounces per completed unit | 11 |
| Actual ounces purchased and used in production | 11,353 |
| Actual price paid for materials | $23,274 |
| Labor: | |
| Standard hourly labor rate | $14.38 per hour |
| Standard hours allowed per completed unit | 5.0 |
| Actual labor hours worked | 5,160.3 |
| Actual total labor costs | $78,695 |
| Overhead: | |
| Actual and budgeted fixed overhead | $1,124,000 |
| Standard variable overhead rate | $28.00 per standard labor hour |
| Actual variable overhead costs | $144,488 |
| Overhead is applied on standard labor hours. | |
The direct materials quantity variance is
a.3,406.25 favorable
b.3,406.25 unfavorable
c.579.25 unfavorable
d.579.25 favorable
35.
Below is a table for the present value of $1 at compound
interest.
| Year | 6% | 10% | 12% |
| 1 | 0.943 | 0.909 | 0.893 |
| 2 | 0.890 | 0.826 | 0.797 |
| 3 | 0.840 | 0.751 | 0.712 |
| 4 | 0.792 | 0.683 | 0.636 |
| 5 | 0.747 | 0.621 | 0.567 |
Below is a table for the present value of an annuity of $1 at
compound interest.
| Year | 6% | 10% | 12% |
| 1 | 0.943 | 0.909 | 0.893 |
| 2 | 1.833 | 1.736 | 1.690 |
| 3 | 2.673 | 2.487 | 2.402 |
| 4 | 3.465 | 3.170 | 3.037 |
| 5 | 4.212 | 3.791 | 3.605 |
Using the tables above, if an investment is made now for $20,000
that will generate a cash inflow of $7,000 a year for the next 4
years, what would be the present value of the investment cash
inflows, assuming an earnings rate of 12%?
a.$22,190
b.$20,352
c.$21,259
d.$3,969
41.
A setup is the time required to prepare an operation for a new production run.
True
False
Homework Answers
22.
Material quantity variance = (Actual quantity used – Standard quantity allowed) x Standard price
= [Actual quantity used – (Actual units x Standard ounce per unit)] x Standard price/ounce
= [11,353 – (1,002 x 11)] x $ 1.75
= (11,353– 11,022) x $ 1.75
=331 x $ 1.75 = $ 579.25 (U)
Material quantity variance is unfavorable as actual quantity used is more than standard quantity allowed.
Hence option “c. $ 579.25 Unfavorable” is correct answer.
35.
Present value of the cash inflows = Annual cash inflow x PVIFA (i, n)
i is Rate of interest and n is the number of periods.
Present value of the cash inflows = $ 7,000 x PVIFA (12 %, 4)
= $ 7,000 x 3.037 = $ 21,259
Hence option “c. $ 21,259” is correct answer.
41.
Setup time is the duration needed to set up a device, machine or process to get ready for the desired function. It is the time required to prepare the manufacturing process and system for production. Whereas the time taken to alter the production line for manufacturing of dissimilar or new batches of production, is known as changeover time. Time required to prepare an operation for a new production run is changeover time.
Hence the statement is False.
Add Answer to:
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