80.2K

Verified Solution

Link Copied!

1. Dancause Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During October, the company budgeted for 5,100 units, but its actual level of activity was 5,090 units. The company has provided the following data concerning the formulas to be used in its budgeting:

Fixed amount Variable amount per month per unit

Revenue........................ -0- $39.20

Direct labor................... $ - 0 - $ 5.40

Direct materials............ -0- 13.20

Manufacturing overhead....... 45,800 1.70

Selling and administrative expenses.. 22,800 .50

Total expenses $68,600 $20.80

The net operating income in the flexible budget for October would be closest to:

A.

$33,869

B.

$25,240

C.

$34,003

D

$25,056

2.

If the actual labor rate exceeds the standard labor rate and the actual labor hours exceed the number of hours allowed, the labor rate variance and labor efficiency variance will be

A.

Labor rate variance - favorable & Labor efficiency variance - favorable

B.

Labor rate variance - favorable & Labor efficiency variance - unfavorable

C.	Labor rate variance - unfavorable & Labor efficiency variance - favorable

D.	Labor rate variance - unfavorable & Labor efficiency variance - unfavorable

Answer & Explanation Solved by verified expert

See Answer