Variable manufacturing support45
Fixed manufacturing support100
Total manufacturing costs900
Targeted selling price$1440
Grant’s Kitchens has excess capacity. Ms. Wang wants the cabinets in cherry rather than oak, so direct material costs will increase by $30 per unit.
72.For Grant’s Kitchens, what is the minimum acceptable price of this one-time-only special order?
$455 + $300 + $45 + $30 = $830
73.Other than price, what other items should Grant’s Kitchens consider before accepting this one-time-only special order?
a.Reaction of shareholders
b.Reaction of existing customers to the lower price offered to Ms. Wang
c.Demand for cherry cabinets
d.Price is the only consideration.
74.If Ms. Wang wanted a long-term commitment for supplying this product, this analysis
a.would definitely be different.
b.may be different.
c.would not be different.
d.does not contain enough information to determine if there would be a difference.
75.If there was limited capacity, all of the following amounts would change EXCEPT
d.the minimum acceptable price.
THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 48 THROUGH 51. White Corporation manufactures football jerseys and uses budgeted machine-hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data.
Budgeted output units20,000 units
Budgeted machine-hours30,000 hours
Budgeted variable manufacturing overhead costs for 20,000 units$360,000
Actual output units produced18,000 units
Actual machine-hours used28,000 hours
Actual variable manufacturing overhead costs$342,000
48.What is the budgeted variable overhead cost rate per output unit?
$360,000/20,000 = $18.00
49.What is the flexible-budget amount for variable manufacturing overhead?
d.none of the above
18,000 x ($360,000/20,000)] = $324,000
50.What is the flexible-budget variance for variable manufacturing overhead?
d.none of the above
$342,000 – [18,000 x ($360,000/20,000)] = $18,000 unfavorable
51.Variable-manufacturing overhead costs were __________ for actual output.
a.higher than expected
b.the same as expected
c.lower than expected
d.unable to be determined
THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 57 AND 58.
Kellar Corporation manufactured 1,500 chairs during June. The following variable overhead data pertain to June.
Budgeted variable overhead cost per unit $ 12.00
Actual variable manufacturing overhead cost $16,800
Flexible-budget amount for variable manufacturing overhead$18,000
Variable manufacturing overhead efficiency variance$360 unfavorable
57.What is the variable overhead flexible-budget variance?
$16,800 - $18,000 = $1,200 (F)
58.What is the variable overhead spending variance?
$1200 (F) - $360 (U) = $1,560 (F)
THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 39 THROUGH 42. Yakima Manufacturing purchases trees from Cascade Lumber and processes them up to the splitoff point where two products (paper and pencil casings) are obtained. The products are then sold to an independent company that...