Question

p Be Careful The following information is for direct material cost for X Company for 2018 Budgeted pounds per unit of product Actual pounds per unit of product Budgeted cost per pound Actual cost per pound Budgeted production Actual production 2.2 $12.40 $12.70 4,510 units 5,000 units Assuming X Company used production as the activity measure, what was the direet material statie budget for 2018 1. AO S114,554 BO S123,033 CO $127,000 DO $136,400 EO S184,549 FO $263,400 8 pt Be Careful X Company's 2018 budgeted cost function for variable overhead was C $8.30X, where X is the mnumber of units pa and its budgeted cost function for fixed overhead was C-$207,900. The following information is also available for 2 Master Budget 10,700 units $88,810 S207,900 Actual Results 11,600 units Production Total variable costs Total fixed costs $95,932 $208,302 itive number means a favorable variance and number means an unfavorable variancel? 2. АО $7,524 BOs7122cO s-59 FO s348 EO 8-49 DOg-54 pX Company plans to prepare annual financial statements. After the company's first year of operation, t inancial statement information is available: Balance Sheet Total assets Total liabilities Total Paid-In Capital 8,043 4,341 Income Statement $21,192 Total revenue hat were total expenses for the year? FOs38,884 EOs26,816 DO $18,494 сО$12,754 BO$8,796 AO s6,066

Answer 1

a) Direct material Static Budget = Budgeted Production * Budgeted Pounds per unit * Budgeted Cost per pounds

= 4,510 units *2.2 pounds *$12.40

= $123,033

The Correct Option is (B) $123,033.

b)

	Master Budget (a)	Flexible Budget (b)	Actual Results (c)	Variance (d=b-c)
Production Units	10,700 units	11,600 units	11,600 units
Total variable Overhead Cost	$88,810	$96,280 [($88,810/10,700 units)*11,600 units]	$95,932	$ 348
Total Fixed Overhead Cost	$207,900	$207,900	$208,302	$-402
Total Overhead Flexible Budget Variance				$-54

The Correct Option is (D) $-54

c) Total Retained Earnings = Total Assets -Total Liabilities and Paid in Capital

=$15,082 - ($8,043 +$4,341)

= $2,698

Assuming that Retained Earnings are Equal to Profits for the year, we can calculate Expenses

Expenses for the year = Revenue - Profits

= $21,192 - $2,698

= $18,494

The Correct option is (D) $18,494.