19. The Fantastic Tool Company (Mexico Division) produced 100,000 saw blades dur

Question

19. The Fantastic Tool Company (Mexico Division) produced 100,000 saw blades during the year. It took 2 hours of labor per blade at a rate of $5.50 per hour. However, its standard labor rate is $5.00. Its labor efficiency variance was a favorable $55,000.

What is Fantastic’s standard hours allowed for a volume of 100,000 blades?

a. 211,000 hours
b. 189,000 hours
c. 210,000 hours
d. 190,000 hours

20. What is Fantastic’s labor rate variance?

a. $96,875 U
b. $105,500 U
c. $100,000 U
d. $95,000 U

21. Lawn Professionals Corporation wants to produce a new lawnmower. he financial data is as follows:

Target price: $350
Target profit: $75
Estimated cost given current product and process designs: $300
Other information:
(1) Through reverse engineering, Lawn Professionals found a design improvement that would save $20 per unit.
(2) It also found that it could purchase a similar component of a different brand at a lower price, which would save $10 per unit.

What is Lawn Professionals’ target cost?

a. $275
b. $300
c. $225
d. $350


22. What is Lawn Professionals’ new expected profit?

a. $75
b. $105
c. $80
d. $50


23. Which budget is used to assesses managerial efficiency?

a. operational budget
b. capital budget
c. static budget
d. flexible budget
e. cash budget


24. The major differences between activity-based budgeting and traditional budgeting are found in:

a. the materials and labor categories.
b. the sales and production budgets.
c. the cash budget.
d. the overhead and selling and administrative categories.
e. none of these

Explanation / Answer

19.Optiion "A" is the correct answer. = [200000-SH ]*5= 55000 SH= 211000 HOURS 20.Option "C'" is the correct answer. =[5.50-5]*200000 =$100000 U 21.Option " a" is the correct answer. = 275+(75) = taraget price 350 22. option "d" is the correct answer. Profit = Target Price -Estimated cost = $350 -300 = $50 23.option "c " is the correct answer. 24.option "d" is the correct answer.

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