Six Accounting Questions - MCQs

Question 1

A company established a direct material standard of 2 pounds of material at a cost of $6 per pound for unit produced. During August the company produced 6,000 units of product. 10,000 pounds of direct material which cost $6.50 per pound were used in the production process. Compute the direct material quantity variance for August.

Answers:

a.  $5,000 unfavorable.

b.  $12,000 unfavorable.

c. $5,000 favorable.

d. $12,000 favorable.

e. $7,000 favorable.

Question 2

Product A has a sales price of $10 per unit. Based on a 10,000-unit production level, the variable costs are $6 per unit and the fixed costs are $3 per unit. Using a flexible budget for 12,500 units, what is the budgeted operating income from Product A?

Selected Answer:d. 

$30,000

Answers:a. 

$12,500

b. 

$25,000

c.   $20,000

d. 

$30,000

e. 

$35,000

Question 3

Bartels Corp. produces woodcarvings. It takes 2 hours of direct labor to produce a carving. Bartels' standard labor cost is $12 per hour. During August, Bartels produced 10,000 carvings and used 21,040 hours of direct labor at a total cost of $250,376. What is Bartels' total labor variance for August?

Answers:

a.  $10,376 unfavorable.

b.  $2,104 unfavorable.

c.  $2,104 favorable.

d.  $12,480 unfavorable.

e. $12,480 favorable.

Question 4

Bartels Corp. produces woodcarvings. It takes 2 hours of direct labor to produce a carving. Bartels' standard labor cost is $12 per hour. During August, Bartels produced 10,000 carvings and used 21,040 hours of direct labor at a total cost of $250,376. What is Bartels' labor rate variance for August?

Question 5

Actual fixed overhead for Kapok Company during March was $92,780. The flexible budget for fixed overhead this period is $89,000 based on a production level of 5,000 units. If the company actually produced 4,200 units what is the fixed overhead volume variance for March?

Answers:a.  $3,780 favorable.

b. $18,020 unfavorable.

c. $14,240 unfavorable.

d. $3,780 unfavorable.

e. $14,240 favorable.

•Question 6

A company's flexible budget for 12,000 units of production showed sales, $48,000; variable costs, $18,000; and fixed costs, $16,000. The operating income expected if the company produces and sells 16,000 units is:

Answers:a. $2,667

b. $14,000

c. $18,667

d. $24,000

e. $35,000