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M12

The document provides information about standard costing and budget variances for two companies, Sta. Ana Company and RTW Co. For Sta. Ana Company, the standard costs and flexible budget at normal capacity of 5,000 units per month are given, including direct materials, direct labor, fixed and variable overhead costs. The cost per unit at 60% capacity is also stated. For RTW Co., standard costs for materials and labor per unit are given for a ready-to-wear outfit. No other information is provided about RTW Co.

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Kendrew Sujide
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236 views1 page

M12

The document provides information about standard costing and budget variances for two companies, Sta. Ana Company and RTW Co. For Sta. Ana Company, the standard costs and flexible budget at normal capacity of 5,000 units per month are given, including direct materials, direct labor, fixed and variable overhead costs. The cost per unit at 60% capacity is also stated. For RTW Co., standard costs for materials and labor per unit are given for a ready-to-wear outfit. No other information is provided about RTW Co.

Uploaded by

Kendrew Sujide
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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a. $32,000 unfavorable. c. $32,000 favorable. b. $120,000 unfavorable. d. $120,000 favorable. 77.

The
PRIMARY reason for low operating profits was (M) a. the variable-cost variance. b. increased fixed costs.
c. a poor management accounting system. d. lower sales volume than planned. STATIC BUDGET VS.
FLEXIBLE BUDGET THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 78 THROUGH 82. Horngren
Peters’ Company manufacturers tires. Some of the company's data was misplaced. Use the following
information to replace the lost data: Actual Results Flexible-Budget Variances Flexible Budget Sales-
Volume Variances Static Budget Units sold #225,000 #225,000 #206,250 Revenues $84,160 $2,000 F (A)
$2,800 U (B) Variable costs (C) $400 U $31,720 $4,680 F $36,400 Fixed costs $16,560 $1,720 F $18,280 0
$18,280 Operating income $35,480 (D) $32,160 (E) $30,280 78. What amounts are reported for
revenues in the flexible-budget (A) and the static-budget (B), respectively? (E) a. $82,160; $79,360 c.
$84,960; $88,960 b. $82,160; $84,960 d. $84,960; $83,360 79. What are the actual variable costs (C)? (E)
a. $36,400 c. $31,320 b. $32,120 d. $27,040 80. What is the total flexible-budget variance (D)? (E) a.
$120 unfavorable c. $680 favorable b. $0 d. $3,320 favorable 81. What is the total sales-volume variance
(E)? (E) a. $7,480 unfavorable c. $1,880 favorable b. $2,800 unfavorable d. $7,480 favorable 82. What is
the total static-budget variance? (E) a. $5,200 favorable c. $1,880 unfavorable b. $3,320 favorable d.
$1,880 favorable STANDARD COST Unit Cost *. Based on normal capacity operations, Sta. Ana Company
employs 25 workers in its Refining Department, working 8 hours a day, 20 days per month at a wage
rate of P6 per hour. At normal capacity, production in the department is 5,000 units per month. Indirect
materials average P0.25 per direct labor hour; indirect labor cost is 12½% of direct labor cost; and other
overhead are P0.15 per direct labor hour. The flexible budget at the normal capacity activity level
follows: Direct materials P 4,000 Direct labor 24,000 Fixed factory overhead 1,200 Indirect materials
1,000 Indirect labor 3,000 Other overhead 600 Total P 33,800 Cost per unit P 6.76 The cost per unit at
60% capacity is (M) a. P6.00 c. P6.82 b. P6.50 d. P6.92 RPCPA 1082 Standard Total Cost 6. Cascade
Company, which has a $3 standard cost per unit and budgeted production at 1,000 units, actually
produced 1,200 units. Total standard cost for the period is a. $3,000 b. $3,600 c. An amount that cannot
be determined without knowing the variances for the period. d. None of the above. D, L & H 9E
MATERIALS VARIANCE Standard DM Cost per Unit 21. RTW Co. manufactures a “one-size-fits-all” ready-
to-wear outfit and uses a standard cost system. Each unit of finished outfit contain

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