39.

The flexible budget for factory overhead would show that the variable overhead per direct labor-
hour is: A. $1.90. C. $0.90. B. $1.60. D. $0.70. 40. At an activity level of 70,000 direct labor-hours, the
flexible budget would show the budgeted amount for utilities as: A. $35,000. C. $80,000. B. $70,000. D.
$50,000. 41. If Wicks Company plans to operate at 90,000 direct labor-hours during the next period, the
flexible budget would show indirect labor costs of: A. $144,000. C. $90,000. B. $63,000. D. $81,000.
Manufacturing Cost Variance 18 . A defense contractor for a government space project has incurred
$2,500,000 in actual design costs to date for a guidance system whose total budgeted design cost is
$3,000,000. If the design phase of the project is 60% complete, what is the amount of the contractor's
current overrun or savings on this design work? (M) A. $300,000 savings. C. $500,000 savings. B.
$500,000 overrun. D. $700,000 overrun. CIA 0596 III-87 19 . A manufacturing firm planned to
manufacture and sell 100,000 units of product during the year at a variable cost per unit of $4.00 and a
fixed cost per unit of $2.00. The firm fell short of its goal and only manufactured 80,000 units at a total
incurred cost of $515,000. The firm’s manufacturing cost variance was (D) a. $85,000 favorable. c.
$5,000 favorable. b. $35,000 unfavorable. d. $5,000 unfavorable. CMA 1293 3-25 Operating Income
Questions 116 and 117 are based on the following information. CMA 0695 3-26 & 27 Clear Plus, Inc.
manufactures and sells boxes of pocket protectors. The static master budget and the actual results for
May 1995 appear below. Actual Static Budget Unit sales 12,000 10,000 Sales $132,000 $100,000
Variable costs of sales 70,800 60,000 Contribution margin 61,200 40,000 Fixed costs 32,000 30,000
Operating income $ 29,200 $ 10,000 20 . The operating income for Clear Plus, Inc. using a flexible budget
for May 1995 is a. $12,000 c. $30,000 b. $19,200 d. $18,000 21 . Which one of the following statements
concerning Clear Plus, Inc.’s actual results for May 1995 is correct? a. The flexible budget variance is
$8,000 favorable. b. The sales price variance is $32,000 favorable. c. The sales volume variance is $8,000
favorable. d. The fixed cost flexible budget variance is $4,000 favorable. Comprehensive THE
FOLLOWING INFORMATION APPLIES TO QUESTIONS 74 THROUGH 77. Horngren The actual information
pertains to the month of August. As part of the budgeting process Alloway’s Fencing Company
developed the following static budget for August. Alloway is in the process of preparing the flexible
budget and understanding the results. Actual Results Flexible Budget Static Budget Sales volume (in
units) # 20,000 # 25,000 Sales revenues $1,000,000 $ $1,250,000 Variable costs 512,000 $ 600,000
Contribution margin 488,000 $ 650,000 Fixed costs 458,000 $ 450,000 Operating profit $ 30,000 $ $
200,000 22 . The flexible budget will report __________ for variable costs. (E) a. $512,000 c. $480,000 b.
$600,000 d. $640,000 23 . The flexible budget will report __________ for the fixed costs. (E) a. $458,000
c. $360,000 b. $450,000 d. $572,500 24 . The flexible-budget variance for variable costs is (E)