# summerlin company budgeted 4 B u s i n e s s F i n a n c e

summerlin company budgeted 4 B u s i n e s s F i n a n c e

1. Summerlin Company budgeted 4,700 pounds of material costing \$4.00 per pound to produce 2,400 units. The company actually used 5,200 pounds that cost \$4.10 per pound to produce 2,400 units. What is the direct materials price variance?

Multiple Choice

• \$520 unfavorable.
• \$2,000 unfavorable.
• \$2,520 unfavorable.
• \$470 unfavorable.
• \$2,050 unfavorable.

2. At the beginning of the month, the Forming department of Martin Manufacturing had 10,000 units in inventory, 30% complete as to materials, and 10% complete as to conversion. During the month the department started 60,000 units and transferred 62,000 units to the next manufacturing department. At the end of the month, the department had 8,000 units in inventory, 80% complete as to materials and 60% complete as to conversion. How many units did the Forming department start and complete in the current month?

Multiple Choice

• 62,000
• 60,000
• 58,000
• 68,000
• 52,000

3. A company produced 200 units of Product L and 150 units of Product M during the current period and incurred joint costs of \$660. Product L sells for \$8 per unit and Product M sells for \$16 per unit. Compute the cost to be allocated to Product M for this period’s joint costs if the value basis is used.

4. A company budgets production of 15,000 solar panels in July. Each unit requires 4 hours of direct labor at a rate of \$20 per hour. The cost of direct labor for July is:

5. Gordon Corporation produced 10,000 digital watches in the current year. Variable costs are \$8 per watch. Overhead assigned is \$2.25 per watch. A supplier offers the watches for \$9.50 each. Gordon’s production manager reports the incremental overhead is \$1.25 per watch. Gordon should:

Multiple Choice

• Continue making the watches as an additional \$1.50 per watch would be incurred if bought from the supplier.
• Continue making the watches as an additional \$0.25 per watch would be incurred if bought from the supplier.
• Buy the watches as they would save \$0.75 per watch.
• Buy the watches as they would save \$1.50 per watch.
• Buy the watches as they would save \$1.75 per watch.