Maple Compary, which uses a standard costing system applies variable mamufacturi
ID: 2562607 • Letter: M
Question
Maple Compary, which uses a standard costing system applies variable mamufacturing overhead (VMOH) costs to prohucts using machine bours (MHs). Additional information for the yearjust ended is: Standard MHs per unit of the prouct Standard VMOHrate Actual Results: 2 hours $520 per standard MH $ 68,034 5 936 Favorable $ 1,006 Unfavorable Total VMOH cost VMOH Efficiency Variance VMOH Rate Variance 15 What were theactual machine hours they used during the year? A. B. C. D. E. None of the above 6,445 MH 13.277 MHs 12,890 MHs 13,070 MHs Spruce Corporation has budgeted sales and finished good iventory purchases over the next quarter as followS July August September October Sales in Units Purchase units 0000 52,000 53,500 42,400 52,300 56,650 The company has 8,000 units of the product on hand on Julyl. Finished goods inventory ending balance required as a percent of next months sales: 20% 16 Budgeted sales for October in units would be 69,250 units 53,500 units 56,650 units 52,000 units A. C. E. None of the aboveExplanation / Answer
15) VMOH rate variance = VMOH cost-AMH*Standard VMH rate Substituting values in the above equation, we have 1006 = 68034-AMH*5.2 12890 = AMH Answer: Option [C] 12,890 MHs 16) July August September Sales in units 40000 52000 53500 Beginning stock of finished goods 8000 10400 10700 Purchases 42400 52300 56650 Total units available 50400 62700 67350 Sales - units 40000 52000 53500 Ending stock of finished goods 10400 10700 13850 Sales for october = Ending finished goods units /20% = 13850/20% = 69250 units Answer: Option [A] 69,250 units 13) November Sales 400000 Cost of goods sold 240000 Bad debts (3%) 12000 Cash expenses 25000 Depreciation 15000 Net Income 108000 Answer: Option [A] $108,000 14) November December January Sales 400000 375000 420000 COGS [60%] 240000 225000 252000 Desired ending inventory 45000 50400 Total inventory needed 285000 275400 Beginning inventory 48000 45000 Purchases needed in units 237000 230400 Payments for purchases: 60% of the month (230400*60%) 138240 40% of the previous month (237000*40%) 94800 Total cash disbursement for purchases 233040 Answer: Option [C] $233,040