#9 Lenci Corporation manufactures and sells a single product. The company uses u
ID: 2437364 • Letter: #
Question
#9
Lenci Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 5,100 units, but its actual level of activity was 5,050 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May:
Data used in budgeting:
Actual results for May:
The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for May would be closest to:
Garrison 16e Rechecks 2018-06-07
$2,750 F
$3,595 F
$3,595 U
$2,750 U
#10
Neubert Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During December, the company budgeted for 5,300 units, but its actual level of activity was 5,340 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for December:
Data used in budgeting:
Actual results for December:
The direct labor in the planning budget for December would be closest to:
Garrison 16e Rechecks 2018-06-07
$18,690
$18,550
$17,845
$17,980
#16
Pippin Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.
The company has reported the following actual results for the product for June:
The labor rate variance for the month is closest to:
$1,020 U
$920 U
$1,020 F
$920 F
Fixed element per month Variable element per unit Revenue - $ 39.60 Direct labor $ 0 $ 5.50 Direct materials 0 15.70 Manufacturing overhead 41,500 1.30 Selling and administrative expenses 22,700 0.20 Total expenses $ 64,200 $ 22.70Explanation / Answer
Solution 9:
The overall revenue and spending variance for may = $2,750 U
Hence last option is correct.
Solution 10:
Direct labor in planning budget = Planned units * Direct labor cost per unit = 5300 * $3.50 = $18,550
Hence 2nd option is correct.
Solution 11:
labor rate variance = (SR - AR) * AH
= ($21.30 - $21.70) * 2300 = $920 U
Hence 2nd option is correct.
Freemont corporation Flexible Budget Performance Report For the month ended June 30 Particulars Actual results Revenue and spending variances Flexible Budget Nos of units 5050 5050 Revenue $197,810.00 $2,170.00 U $199,980.00 Costs: Direct labor $28,565.00 $790.00 U $27,775.00 Direct material $80,265.00 $980.00 U $79,285.00 Manufacturing overhead $47,905.00 $160.00 F $48,065.00 Selling and administrative expenses $22,680.00 $1,030.00 F $23,710.00 Total expenses $179,415.00 $580.00 U $178,835.00 Net Income $18,395.00 $2,750.00 U $21,145.00Related Questions
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