Intermediate Management Accounting
1. Carpe Diem Co. reported the following variances for the period:
|
Direct materials price variance
|
$1,700
|
U
|
|
Direct labour efficiency variance
|
23,600
|
U
|
|
Fixed overhead volume variance
|
10,200
|
U
|
|
Fixed overhead budget variance
|
20,000
|
F
|
|
Direct materials quantity variance
|
6,500
|
F
|
|
Direct labour rate variance
|
2,000
|
F
|
Based on this information, which of the following statements is true?
a) Spending on fixed overhead was greater than planned.
b) Carpe Diem produced more units than planned.
c) The direct labour static budget variance is favourable.
d) The direct material flexible budget variance is favourable.
2. Raven Enterprises planned to manufacture 28,000 units of its product in April, but instead only manufactured 25,000 units. It actually used 290,000 kilograms of direct materials and 41,000 direct labour hours.
During the month, the company purchased 315,000 kilograms of direct materials for
$586,800, and factory wages for direct labour were $430,500.
Raven uses the following standards for one unit of product to assist in controlling its costs:
Cost Quantity
Direct materials $X per kilogram 12 kilograms
Direct labour $10.00 per hour X hours
The price variance for direct materials was $45,000 U. The efficiency variance for direct labour was 90,000 F.
What is the standard direct materials cost per kilogram and the standard number of direct labour hours per unit? Round your answer to the nearest cent.
a) Direct materials: $1.72; Direct labour hours: 1.79
b) Direct materials: $1.72; Direct labour hours: 2.00
c) Direct materials: $1.87; Direct labour hours: 1.79
d) Direct materials: $1.87; Direct labour hours: 2.00
3. Jessie's Jams is well known for its Black N' Blue Jam, which consists of a mix of blueberries, blackberries and raspberries. The standard ingredients and cost for 80 kilograms of jam are as follows:
|
|
Kilograms
|
Price/kg
|
|
Blueberries
|
15
|
$0.48
|
|
Blackberries
|
60
|
$0.42
|
|
Raspberries
|
25
|
$0.36
|
During the month of July, Jessie's produced 240,000 kilograms of jam using the following inputs and prices:
|
|
Kilograms
|
Price/kg
|
|
Blueberries
|
58,000
|
$0.45
|
|
Blackberries
|
176,000
|
$0.42
|
|
Raspberries
|
86,000
|
$0.33
|
What were the total mix and yield variances for the month of July?
a) Mix variance: 240 U; Yield variance: 0
b) Mix variance: 240 U; Yield variance: 8,280 U
c) Mix variance: 2,245 F; Yield variance: 8,280 U
d) Mix variance: 2,245 F; Yield variance: 8,520 U
4. A company has the following data from the most recent financial period: Static budget variance $980,000 U
Sales mix variance $161,500 F
Market share variance $100,000 U
Sales volume variance $105,000 F Which of the following statements is correct?
a) The market size variance is $43,500 F.
b) The flexible budget variance is $875,000 F.
c) The sales quantity variance is $266,500 U.
d) The sales quantity variance is $818,500 F.
5. Frames For You Inc. sells frames for eyewear. The company has three basic styles: A113, B243 and C112. The budgeted sales and contribution margins along with the actual activity for the last period are as follows:
|
|
Actual
|
Budgeted
|
|
Style
|
Unit sales
|
Unit CM
|
Unit sales
|
Unit CM
|
|
A113
|
25,200
|
$ 56.00
|
24,000
|
$ 60.00
|
|
B243
|
35,400
|
$ 78.00
|
37,000
|
$ 80.00
|
|
C112
|
26,000
|
$ 90.00
|
28,000
|
$ 95.00
|
|
|
86,600
|
|
89,000
|
|
Frames For You had budgeted based on capturing a 5% share of the predicted market of 1,780,000 frames. The actual market size was 1,790,000 frames.
What are the market size and market share variances for Frames For You Inc.? Use unrounded numbers for intermediate calculations.
a) Market share variance: $191,452 U; market size variance: $39,663 F
b) Market share variance: $215,373 U; market size variance: $37,600 F
c) Market share variance: $217,269 U; market size variance: $37,931 F
d) Market share variance: $230,045 U; market size variance: $39,663 F