ACCT 2301 FA 2012: Practice Exam 3

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ACCT 2301 FA 2012: Practice Exam 3 Moreland Manufacturing Inc (use for Qs 1 through 4) Moreland Manufacturing Inc. produces and sells stainless steel faucets. In the current year, the company had budgeted for the production and sale of 6,000 faucets but, due to unexpected demand, 7,000 faucets were actually produced and sold. Each faucet has a standard requiring 15 ounces of direct material at a cost of $.40 per ounce and 15 minutes of assembly time at a cost of $.20 per minute. Actual costs for the production of 7,000 faucets were $41,359.50 for materials (106,050 ounces purchased and used @ $.39 per ounce) and $21,560 for labor (98,000 minutes @ $.22 per minute). 1. Moreland's direct materials price variance is: a. $1,050.00 F. b. $1,050.00 U. c. $1,060.50 F. d. $1,060.50 U. 2. Moreland's direct materials usage variance is: a. $ 420 U. b. $ 420 F. c. $6,420 U. d. $6,420 F. 3 . Moreland's direct labor rate variance is: a. $2,100 F. b. $1,800 F. c. $1,960 U. d. $ 560 U. 4. Moreland's direct labor efficiency variance is: a. $1,600 U. b. $1,400 F. c. $2,100 U. d. $2,100 F. Mystic Falls Inc (Q 5 & 6) Mystic Falls Inc. bottles and sells a popular soft drink. In 2011, the company had expected to sell 1,000,000 bottles but actually bottled and sold 900,000 bottles. The standard direct materials cost for each bottle is $.40 comprised of 10 ounces at a cost of $.04 per ounce. During 2011, 10,000,000 ounces of material were purchased out of which 9,200,000 ounces were used at a cost of $.05 per ounce. 5 . The direct materials price variance for 2011 was: a. $ 92,000 U. b. $ 92,000 F. c. $100,000 U. d. $100,000 F. 6 . The direct materials usage variance for 2011 was: a. $ 8,000 U.
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