problem 1: Guido Guitar (GG) planned to sell 280,000 guitars at $400 each but actually sold 250,000 at $425 each. Which of the following is TRUE of GG's sales quantity variances?
a) $12 million U
b) $5.75 million F
c) $5.75 million U
d) $6.25 million U
problem 2: Which if the following statements is FALSE of Total Quality Management (TQM)?
a) TQM is focused on improving product and customer service quality.
b) TQM is expensive to initiate.
c) TQM requires top management support.
d) TQM requires ISO 9000 certification.
problem 3: The _________ perspective of the balanced scorecard focuses on the infrastructure of the organization.
c) internal business process
d) innovation and learning
problem 4: _________ provides consumer name recognition, which lowers the information cost of introducing new products.
a) Business capital
b) Brand-name capital
c) Marketing capital
d) Pricing capital
problem 5: Budgeted, standard, and actual volume measures differ in terms of when they are _________.
problem 6: Cost of quality data for Zach's Zambonis (ZZ) appears below.
Engineering tests at supplier's factory 18
Field testing new product 12
Inspection cost 42
Process re-engineering 50
Product redesign 42
Sales returns (at cost) 105
Training employees on a new system 6
Warranty repairs 60
For Zach's Zambonis, which of the following statements is TRUE?
a) Prevention costs are $116,000.
b) Prevention costs are $116,000.
c) Internal failure costs amount to $186,000.
d) External failure cost ZZ $105,000.
problem 7: CarloffCremes (CC) planned to sell 40,000 Queen size at $20 each and 20,000 King size at $15 each. Actual sales of the former were 45,000 and 25,000 of the latter, at $19 and $16 respectively. Which of the following is TRUE of CC's sales mix variance?
b) $175,000 F
c) $28,333 F
d) $8,333 U
problem 8: Which of the following is TRUE?
a) Budgeted fixed factory overheads = Budgeted overheads per unit × actual volume
b) Budgeted fixed factory overheads = Budgeted overheads per unit × standard volume
c) Budgeted factory overheads = Budgeted fixed overheads per unit × budgeted volume + variable overheads
d) Budgeted factory overheads = Budgeted fixed overheads + planned variable overhead per unit × planned volume
problem 9: Which of the following statements is FALSE of Just-In-Time (JIT) manufacturing systems?
a) Demand pull means a closer relationship with the customer.
b) The power of suppliers is reduced.
c) Warehousing space and equipment needs are reduced.
d) After process re-engineering, time to complete the product is reduced.
problem 10: CarloffCremes (CC) planned to sell 40,000 Queen size at $20 each and 20,000 King size at $15 each. Actual sales of the former were 45,000 and 25,000 of the latter, at $19 and $16 respectively. Which of the following is TRUE of CC?
a) The sales price variance is $20,000 F
b) The sales variance is $175,000 F
c) The sales price variance is $20,000 U
d) The sales variance is $20,000 U
problem 11: The following information is for the third quarter of this year:
Production 92,000 units 87,000 units
Direct labor hours 506,800 DL hrs 380,000 DL hrs
Fixed manufacturing overhead $205,000 $182,400
Variable manufacturing overhead $910,000 $841,500
Standard direct labor hour per unit 5.5
find out the following three overhead variances.
a) Overhead volume variance
b) ?Overhead efficiency variance ?
c) Overhead spending variance
problem 12: The purchasing department of Bradley Inc. is responsible for companywide purchasing. Its total costs are assigned to each division based on the number of purchase orders the purchasing department processes for each division. The purchasing department's fixed costs are $300,000 per year, and it expects to process15, 000 purchase orders (POs) at a variable cost of $50 per purchase order. Purchasing costs do not include the cost of the items purchased.
Purchasing processed 16,000 POs during the year and incurred total costs (excluding the cost of the items purchased) of $1,180,000.
Answer all the problems below in full detail:
a) Design a performance evaluation report for the purchasing department.
b) Describe what each item in the report measures.
c) Evaluate the performance of the purchasing department.
d) What other performance measures would you want to collect and report for the purchasing department?