Choose the best answer from the given choices(g points total) 1. The materials q
ID: 2397096 • Letter: C
Question
Choose the best answer from the given choices(g points total) 1. The materials quantity variance should be computed: A. when materials are purchased. B. based upon the amount of materials used in production. C. based upon the difference between the actual and standard prices per unit times the actual quantity used. D. only when there is a difference between standard and actual cost per unit for the materials. 2. Ohme Framing's cost formula for its supplies cost is $1,620 per month plus $13 per frame. For the month of April, the company planned for activity of 882 frames, but the actual level of activity was 878 frames. The actual supplies cost for the month was $13,500. The supplies cost in the flexible budget for April would be closest to: A. $13,086 B. $13,500 C. $13,034 D, $13,027 3. Given the following data: Average operating assets Total liabilities Sales Contribution margin Net operating income $250,000 $100,000 5600,000 $150,000 530,000 Retun on investment (RO) would be: A. 5% ?. 12% C. 25% D. 60% 4. Fudala Snow Removal's cost formula for its vehicle operating cost is $1,480 per month plus $308 per smow-day. For the month of March, the company planned for activity of 11 snow-days, but the actual level of activity was 16 snow-days. The actual vehicle operating cost for the month was $6,130. The spending variance for vehicle operating cost in March would be closest to: A. $1,262 U B. $278 F C. $278 U D. $1,262 FExplanation / Answer
1. Option B. Based on amount of materials used for production
2. Option C. Supplies cost = $1620 + $13 * No. of Frames = $1620 + $13*878 = $13034
3. Option B. ROI = Net Income / Assets = $30000 / $250000 = 12%
4. Option B. Spending Variance = Standard Cost - Actual Cost = $1480 + $308 * 16 - $6130
Spending Variance = $6408 - $6130 = $278 favorable