Question

7. Scorpion Production Company planned to use 1 yard of plastic per uinit made 3900 nits, althoute However, the plastic actually cost $80 per yard. The company actually mate 3.960. How m had planned to make only 3,300 units. Total yards used for production total materials variance? A) $48,600 U B) $3,960 F 313,000 - (ASP $900 U 3900 x 8 31 5,9 30 C D) $4,860 U 313.009 319.ooo . - 34 7,3od ε 44. 100 38. Benson Inc.'s accounting records reflect the following inventories: Dec. 31. 2016 $ 80,000 104,000 100,000 Raw materials inventory Work in process inventory Finished goods inventory 3900x 3 S 64,000 116,000 92,000 During 2017, Benson purchased s1,450,000 of raw materials, incurred direct labor costs of $250,000, and incurred manufacturing overhead totaling $160,000 How much raw materials were transferred to production during 2017 for Benson? A) $1,434,000 B) $1,466,000 C) $1,386,000 D) $1,450,000 Fixed costs are $900,000 and the variable costs are 75% of the unit selling price, what is the break even point in dollars? 39. A) $3,600,000 B) $2,700,000 C) $1,200,000 D) $2,100,000 40. The following information is taken from the production budget for the first quarter: 1,200 426,000 472,000 Beginning inventory in units Sales budgeted for the quarter Capacity in units of production facility How many finished goods unjits should be produced during the quarter if the company desires units available to start the next quarter? A) 424,000 B) 474,000 C) 428,000 D) 429,200

3200

Answer 1

37.

Total material variance = (Standard price x Standard quantity for actual output) – (Actual price x Actual Quantity)

= 81 x 3,900 - 80 x 3,960

= 315,900 - 316,800

= $900 (Unfavorable)

Correct option is (C)

38.

Raw material transferred to production = Beginning raw material + Raw material purchases - Ending raw material

= 80,000 + 1,450,000 - 64,000

= $1,466,000

Correct option is (B)

39.

Since variable costs are 75% of sales, hence Contribution margin ratio is 25%

Break even point ($) = Fixed cost/Contribution margin ratio

= 900,000/25%

= $3,600,000

Correct option is (A)

40.

Units produced = Units sold + Ending inventory of finished goods - Beginning inventory of finished goods

= 426,000 + 3,200 - 1,200

= 428,000

Correct option is (C)

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