Chapter 4 Essay

1983 Words Apr 1st, 2012 8 Pages
AC505 week 8 final exam numbers 18-45
18. Avril Company makes collections on sales according to the following schedule:

30% in the month of sale

60% in the month following sale

8% in the second month following sale

The following sales are expected:

Expected Sales

January $100,000

February 120,000

March 110,000

Cash collections in March should be budgeted to be:

A) $110,000.

B) $110,800.

C) $105,000.

D) $113,000.

Answer: D
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overhead 0.1 hours .40

The company had no beginning inventories of any kind on Jan. 1. Variable manufacturing overhead is applied to production on the basis of direct labor hours. During January, the following activity was recorded by the company:

Production of Fastgro: 4,000 bags

Direct materials purchased: 85,000 pounds at a cost of $32,300

Direct labor worked: 390 hours at a cost of $4,875

Variable manufacturing overhead incurred: $1,475

Inventory of direct materials on Jan. 31: 3,000 pounds

22. The materials price variance for January is:

A) $1,640 F.

B) $1,640 U.

C) $1,700 F.

D) $1,300 U.
Answer: C MPV = (.38 - .40) 85,000 = 1,700 F

AP = 32,300/85,000, SP = 8.00/20 lbs

23. The materials quantity variance for January is:

A) $800 U.

B) $300 U.

C) $300 F.

D) $750 F.
Answer: A MQV = (82,000 – 80,000) .4 = 800

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