Question

4. The direct material budget is prepared on the basis of the d. cash budget b. master budget. C. capital expenditure budget. d. production budget. 5. The direct materials budget shows: Units to be produced Total RG needed for production Total materials required 3,000 12,000 13,200 What are the direct materials per unit? 0.44 KG 4.0 KG 4.4 KG Cannot be determined from the data provided 6. The production budget shows expected unit sales of 32,000. Beginning finished goods units are 5,600. Required production units are 33.600. What is the desired ending finished goods units? 4.000 5,600 6,400 7,200 7. Variable cost per unit, within the relevant range, will: a increase as production decreases. b. decrease as production decreases. c remain the same as production levels change. d. decrease as production increases. 8. Sales volume variance is the difference between the: a actual amounts and the flexible budget due to differences in price and costs. h flexible budget and static budget due to differences in fixed costs. c static budget and actual amounts due to differences in selling price. d. expected results in the flexible budget for the actual units sold and the static budget. 2. The formula for the materials cost variance is (AQ XAP) - (AQ SP) (AQ X AP) - (SQ * SP). (AQ X AP) - (SQ AP). (AQ - SP) - (SQ x AP).

answer with an explanation please

Answer 1

(4) Direct material is prepared on the basis of Production Budget

Because we need to find the units to be produced first. In the basis of units produced we make the budget of Direct Materials

Option (d) is correct

(5) Direct material per unit = Total KG needed/Units to be produced

          = 12000/3000 = 4 KG

Option (b) is correct

(6) Desired ending finished goods = Beginning finished goods + Production – Expected sales

                 = 5600 + 33600 – 32000 = 7200 units

(7) As the production increases Variable cost should be increases in total

But Variable cost per unit always remain same with in the relevant range

Hence option (c) is correct

(8) Sales volume variance is the difference between Flexible budget and static budget

Hence option (b) is correct

(9) Material cost variance = Actual Cost – Standard cost

(AQ * AP) – (SQ * SP)

Option (b) is correct

(10) Total Direct Labor variance :-

(A Hrs * AR) – (S Hrs * SR)

S Hrs = 1000 units * 2 = 2000

(1850 * $9.60) – (2000 * $9) = $240 F

Option (d) is correct