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When 10,000 units are produced, fixed costs are $14 per unit. Therefore, when 20,000 units are produced fixed costs will
A remain at $14 per unit
B increase to $28 per unit
C total $280,000
D decrease to $7 per unit
ANSWER – D decrease to $7 per unit
If the Manufacturing Overhead account has a debit balance at the end of a period, it means that
A Actual overhead costs were less than overhead costs applied to jobs
B Actual overhead costs were greater than overhead costs applied to jobs
C Actual overhead costs were equal to overhead costs applied to jobs
D No jobs have been completed
ANSWER – B Actual overhead costs were greater than overhead costs applied to jobs
The formula for the materials price variance is
A (AQ × SP) – (SQ × SP)
B (AQ × AP) – (AQ × SP)
C (AQ × AP) – (SQ × SP)
D (AQ × SP) – (SQ × AP)
ANSWER – B (AQ × AP) – (AQ × SP)
Sutton Company produces head sets for computers, which it sells for $20 each. The variable cost to make each head set is $6. During April, 700 sets were sold. Fixed costs for April were $2 per unit for a total of $1,400 for the month. How much is the monthly break-even level of sales in dollars for Sutton Company?
A $100
B $2,000
C $7,000
D $4,200
ANSWER – B $2,000
The standard number of hours that should have been worked for the output attained is 6,000 direct labor hours and the actual number of direct labor hours worked was 6,300. If the direct labor price variance was $3,150 unfavorable, and the standard rate of pay was $9 per direct labor hour, what was the actual rate of pay for direct labor?
A $8.50 per direct labor hour
B $7.50 per direct labor hour
C $9.50 per direct labor hour
D $9.00 per direct labor hour
ANSWER – C $9.50 per direct labor hour
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Gulick Company developed the following data for the current year:
| Beginning work in process inventory | $120,000 |
| Direct materials used | 72,000 |
| Actual overhead | 144,000 |
| Overhead applied | 108,000 |
| Cost of goods manufactured | 132,000 |
| Total manufacturing costs | 360,000 |
Gulick Company’s ending work in process inventory is
A $348,000
B $240,000
C $228,000
D $108,000
ANSWER – A $348,000
Meyerhoff Company has the following budgeted sales: