Exam 19: Controlling Cost and Profit

Exhibit 19-2 The following information relates to Bergen Corporation: - Refer to Exhibit 19-2. Based on the information above, the journal entry to record the purchase of materials and the materials price variance would include a debit to:

To produce one unit of PL734 requires 1.5 direct labor hours at a standard cost of $15.00 per hour. During the month of April, 41,000 units were produced using 63,450 direct labor hours of labor at a cost of $926,370.

Which of the following is NOT an advantage of standard costing?

Residual income is equal to:

A favorable materials price variance would occur when the:

Circle Corporation's president would like to have an analysis of variable and fixed manufacturing overhead costs budgeted and incurred for the month of August. Three machine hours per unit is the standard allowed for machine hours and 15,500 units were projected to be produced in August. Budgeted variable and fixed manufacturing overhead costs for the month were $93,000 and $186,000, respectively. During August, 49,000 machine hours were actually used to produce 17,500 units of product. Actual variable and fixed manufacturing overhead for the month were $112,000 and $194,000, respectively.

Exhibit 19-6 Kentucky Corporation has the following operating data for 2011: - Refer to Exhibit 19-6. Given the information above, if Kentucky's net income increased to $306,000, the return on investment would be:

Exhibit 19-10 The following information is given for Roe Company: Fixed manufacturing overhead is applied to production based on direct labor hours. Refer to Exhibit 19-10. Using the data above, compute the fixed manufacturing overhead budget variance.

Frank Company, which has total assets of $300,000, has an opportunity to invest $80,000 in a new project that will generate a return of $16,000 per year. Given this information, if Frank Company was earning 25% before, then accepts this project, its new return on investment will be approximately:

Exhibit 19-2 The following information relates to Bergen Corporation: - Refer to Exhibit 19-2. Based on the information above, the journal entry to record the use of materials and the materials quantity variance would include a debit to:

Exhibit 19-7 The following figures represent 100% capacity for Starr Manufacturing: Starr Manufacturing normally produces at 100% capacity. During the month of October, the company started and completed 10,000 units of product, using variable manufacturing overhead costs of $20,000. The company used 6,400 direct labor hours in October instead of the 6,000 hours expected for the activity level achieved. -Refer to Exhibit 19-7. Based on the information above, the manufacturing overhead efficiency variance is:

The following information is given for Reardan Company: Fixed manufacturing overhead is applied to production based on direct labor hours.

Which type of center is usually found at the lowest levels in a firm?

Which of the following would NOT cause a material quantity variance?

Given the following information, if the minimum rate of return on average total assets is 15%, what is the residual income?

Which variance is NOT considered to be an input variance?

When other factors remain constant, an increase in average total assets:

A favorable labor efficiency variance would occur when the:

Which of the following compares actual inputs at standard prices with standard quantity of inputs at standard prices?

Profit margin is equal to: