quiz-ma7-5

Management Accounting Chapter 7, Part 5

The following data for item 1 - 6 (8 points)

Ozzy Company produces and sells a single product. The budgeted income statement for the month of August, 2026 is as follows:

Sales (7,000 units)	$11,970,000
Variable costs	8,246,000
Contribution margin	3,724,000
Fixed overhead	1,995,000
Operating income	$1,729,000

During the year, the company produced and sold 6,800 units of goods at a selling price of $1,695 per unit . Variable manufacturing costs amounted to $8,017,200 and fixed manufacturing costs amounted to $1,996,500.

1. What is the total static-budget variance? (2 points)

$215,700 favorable $215,700 unfavorable $216,700 favorable $216,700 unfavorable None of the above responses is correct.

2. What is the total variable cost on the flexible budget? (1 point)

$8,030,400 $8,020,400 $8,010,400 $8,000,400 None of the above responses is correct.

3. What is the selling price variance? (1 point)

$101,700 favorable $$101,700 unfavorable $$ 102,700 favorable $102,700 unfavorable None of the above responses is correct.

4. What is the operating income on the flexible budget? (2 points)

$1,620,600 $1,621,600 $1,622,600 $1,623,600 None of the above responses is correct.

5. What is the total flexible-budget variance? (1 point)

$110,300 unfavorable $110,300 favorable $110,900 unfavorable $110,900 favorable None of the above responses is correct.

6. What is the total sales-volume variance? (1 point)

$106,100 favorable $106,100 unfavorable $106,400 favorable $106,400 unfavorable None of the above responses is correct.

The following data for items 7 - 15 (7 points)

Black Sabbath Company produces single product. The company has established the following standard costs per finished unit for direct materials and direct manufacturing labor:

Direct materials (80 gallons) ฿32
Direct labor (60 hours) ฿216

During year 2025, the company produced 503 units of product, and incurred the following costs:
Direct materials purchased and used (40,743 gallons) ฿ 15,482.34
Direct labor (29,677 hours) ฿108,321.05

7. What is the standard price for direct materials? (0.5 point)

฿0.34 per gallon ฿0.36 per gallon ฿0.38 per gallon ฿0.40 per gallon None of the above responses is correct.

8. What is the standard rate for direct labor? (0.5 point)

฿3.80 per hour ฿3.60 per hour ฿3.40 per hour ฿3.20 per hour None of the above responses is correct.

9. What is the actual price for direct materials? (0.5 point)

฿0.40 per gallon ฿0.34 per gallon ฿0.36 per gallon ฿0.38 per gallon None of the above responses is correct.

10. What is the actual rate (price) for direct labor? (0.5 point)

฿3.65 per hour ฿3.70 per hour ฿3.75 per hour ฿3.80 per hour None of the above responses is correct.

11. What is the price variance of the direct materials? (1 point)

฿814.86 unfavorable ฿814.86 favorable ฿818.19 unfavorable ฿818.19 favorable None of the above responses is correct.

12. What is the efficiency (quantity) variance of the direct materials? (1 point)

฿201.20 unfavorable ฿201.20 favorable ฿203.50 unfavorable ฿203.50 favorable None of the above responses is correct.

13. What is the rate (price) variance of the direct manufacturing labor? (1 point)

฿1,483.85 unfavorable ฿1,483.85 favorable ฿1,481.60 unfavorable ฿1,481.60 favorable None of the above responses is correct.

14. What is the efficiency variance of the direct manufacturing labor? (1 point)

฿1,790.25 unfavorable ฿1,790.25 favorable ฿1,778.50 unfavorable ฿1,778.50 favorable None of the above responses is correct.

15. What is the flexible-budget variance of the direct manufacturing labor? (1 point)

฿296.90 unfavorable ฿296.90 favorable ฿326.95 unfavorable ฿326.95 favorable None of the above responses is correct.

The following data for item 16 - 20 (10 points)

Nirvana Company manufactures lenses for the rear lamps (taillights) of automobiles in batches. To manufacture a batch of the lenses, the company must setup the machines and molds. Setup overhead costs consist of some costs that are variable and some costs that are fixed with respect to the number of setup-hours. The following information is available for April 2026:

	Static budget	Actual results
Units of lens produced and sold	60,000	630,000
Batch size (number of units per batch)	250	225
Setup hours per batch	3	2
Variable overhead cost per setup hour	150	163

16. What is the spending variance for variable setup overhead costs? (2 points)

$7,280 unfavorable $7,280 favorable $6,650 unfavorable $6,650 favorable None of the above responses is correct.

17. What is the efficiency variance for variable setup overhead costs? (3.5 points)

$29,400 unfavorable $29,400 favorable $28,200 unfavorable $28,200 favorable None of the above responses is correct.

18. What is the flexible-budget variance for variable setup overhead costs? (1 point)

$21,640 unfavorable $21,640 favorable $22,120 unfavorable $22,120 favorable None of the above responses is correct.

19. What is the spending variance for fixed setup overhead costs? (0.5 point)

$160 favorable $160 unfavorable $80 favorable $80 unfavorable None of the above responses is correct.

20. What is the production-volume variance for fixed setup overhead costs? (3 points)

$3,250 favorable $3,250 unfavorable $2,250 favorable $2,250 unfavorable None of the above responses is correct.