(Solution) 106. Information On Sunny Company's Direct Labor Costs For The Month Of April Is As Follows: Actual Direct Labor-hours......................... | Snapessays.com


(Solution) 106. Information on Sunny Company's direct labor costs for the month of April is as follows: Actual direct labor-hours.........................


Hi, I have some accounting questions that I need help explaining, thanks!106. Information on Sunny Company's direct labor costs for the month of April is as follows:

 

Actual direct labor-hours.

 

........................

 

69,000

 

Standard direct labor-hours.

 

......................

 

70,000

 

Total direct labor payroll.

 

.......................

 

$483,000

 

Standard direct labor rate per hour.

 

..............

 

$ 6.40

 

What is the company's direct labor rate variance?

 

A. $34,500 (unfavorable)

 

B. $40,000 (unfavorable)

 

C. $42,000 (unfavorable)

 

D. $42,000 (favorable)

 

E. none of the above

 

104. The Vallejo Company expects purchases for 2016 to be $160,000 in the first quarter,

 

$240,000 in the second quarter, $190,000 in the third quarter, and $300,000 in the last

 

quarter. All purchases are made on credit. 90% of purchases are paid for in the quarter

 

purchased; 10% are paid for in the quarter following purchase. Other cash expenses paid

 

each quarter are: taxes, $40,000; wages, $120,000; rent, $16,000; interest, $4,000; and

 

miscellaneous, $3,000. If the company plans to pay off $20,000 in notes in the fourth

 

quarter of 2016, planned cash disbursements in the fourth quarter will be:

 

A. $472,000

 

B. $473,000

 

C. $453,000

 

D. $492,000

 

E. none of the above

 

103. Crandell Co. forecasts monthly production of 20,000 units at a cost of $20 each. The cost

 

breakdown is as follows:

 

Labor.

 

..............

 

2 hours per unit at $4 per hour

 

Material.

 

...........

 

3 pounds per unit at $2 per pound

 

Fixed overhead.

 

.....

 

$2 per direct labor hour

 

Variable overhead.

 

..$1 per direct labor hour

 

In September, Crandell produced 18,000 units at a cost of $397,500. If payroll for

 

September amounted to $150,000 at an hourly rate of $5, compute the labor budget

 

variance.

 

A. $6,000 favorable

 

B. $6,000 unfavorable

 

C. $30,000 favorable

 

D. $24,000 unfavorable

 

E. none of the above

 

99. The Roger Company is planning to purchase a new machine at a cost of $660,000, which

 

will depreciate on a straight-line basis over a 10-year period with $60,000 salvage value

 

and a full year's depreciation taken in the year of acquisition. The new machine is

 

expected to produce average annual before-tax net cash inflows of $132,000 a year in

 

each of the next 10 years. The tax rate is 40%. The unadjusted rate of return would be:

 

A. 12%.

 

B. 13.8%.

 

C. 13.4%.

 

D. 12%.

 

E. none of the above

 


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This question was answered on: May 23, 2022

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