Professional Documents
Culture Documents
Which of the following factors should not be considered when deciding whether to investigate a
variance?
a. magnitude of the variance
b. trend of the variances over time
c. likelihood that an investigation will reduce or eliminate future occurrences of the variance
d. whether the variance is favorable or unfavorable
Forrest Company uses a standard cost system for its production process and applies overhead based
on direct labor hours. The following information is available for August when Forrest made 4,500
units:
Standard:
DLH per unit
Variable overhead per DLH
Fixed overhead per DLH
Budgeted variable overhead
Budgeted fixed overhead
2.50
P 1.75
P 3.10
P 21,875
P 38,750
Actual:
Direct labor hours
Variable overhead
Fixed overhead
10,000
P 26,250
P 38,000
5.
d. P 6,562.50 U
6.
d. P 4,375 F
P 2.50
1.75
3.10
21,875
38,750
Actual:
Direct labor hours
Variable overhead
Fixed overhead
1.
2.
3.
4.
5.
1.
10,000
P 26,250
38,000
a.
b.
c.
d.
a.
b.
c.
d.
a.
b.
c.
d.
a.
b.
c.
d.
a.
b.
c.
d.
Apple Shoe Shop is preparing its cash budget for the month of May. Apple pays 60% of purchases
in the month of purchase and the remainder the next month. Operational information follows:
Beginning inventory, May 1
P 20,000
Estimated May cost of goods sold
100,000
Estimated May ending inventory
35,000
April purchases
90,000
What are Apples estimated cash payments for shoes in May?
a. P 115,000
b. P 105,000
c. P 87,000
d. P 70,000
2.
Lemons inventory increased during the year. On the basis of this information, income reported
under absorption costing
a. Will be the same as that reported under variable costing
b. Will be higher than that reported under variable costing
c. Will be lower than that reported under variable costing
d. Will differ from that reported under variable costing, the direction of which cannot be
determined from the information given
3.
b.
4.
Orange Company produced 4,000 units product. Each unit requires 30 minutes to produce. The
standard labor rate is P 12 per hour. The direct labor payroll for the period was P 22,000, based on
an hourly rate of P 10. What is the direct labor rate variance?
a. P 4,400 favorable
c. P 2,000 unfavorable
b. P 3,750 unfavorable
d. P 2,400 unfavorable
5.
Cost Driver
Number of children
Staff hours
Number of Children
60
40
Staff Hours
1,000
200
6.
If the traditional costing system were used and nursery fee was computed at 300%
of the cost of service per child, Tiny Tony Nursery could have charged each child a fee of
a. P 166.67
b. P 500
c. P 650
d. P 1,500
7.
If the ABC system were used, nursery fee per child should have been
a. P 1,850 for the babies, P975 for the kiddies.
b. P 616.67 for the babies, P325 for the kiddies.
c. P 1,500 for both the babies and kiddies.