: Planning,Performance 1

| October 22, 2018

Student ID: 21504026

Exam:
061683RR – PLANNING, PERFORMANCE
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Questions
1 to 20:Select the best answer to each question. Note that a question
and its answers may be split across a pagebreak, so be sure that you
have seen the entire question and all the answers before choosing
an answer.

1.Which of the
following willnotresult in an increase in return on
investment (ROI), assuming otherfactors remain the same?

A. An
increase in net operating income

B. An
increase in operating assets

C. An increase in sales

D.
A reduction in expenses

Use the following information to answer this
question.

Moorhouse
Clinic uses client visits as its measure of activity. During December, the
clinic budgeted for 3,700 client visits, but its actual level of activity was
3,690 client visits. The clinic has provided the following data concerning the
formulas used in its budgeting and its actual results for December:

Data used in budgeting:

Fixed element

Variable element

per month

per client-visit

Revenue

____-____

$25.10

Personnel
expenses

$27,100

$7.10

Medical
supplies

1,500

4.50

Occupancy
expenses

6,000

1.00

Administrative
expenses

3,000

0.10

Total
expenses

$37,600

$12.70

Actual
results

for
December:

Revenue

$96,299

Personnel
expenses

$51,009

Medical
supplies

$17,425

Occupancy
expenses

$9,240

Administrative
expenses

$3,239

2.The
activity variance for personnel expenses in December would beclosest
to

A. $2,361 U.

B. $71 F.

C. $71 U.

D.$2,361 F.

3.Last year,
the House of Orange had sales of $826,650, net operating income of $81,000, and
operatingassets of $84,000 at the beginning of the year and $90,000 at
the end of the year. What was the company’s turnover rounded to the nearest
tenth?

A. 9.5

B.
10.2

C. 9.2

D.
9.8

4.Coles Company, Inc. makes and
sells a single product, Product R. Three yards of Material K are neededto
make one unit of Product R. Budgeted production of Product R for the next five
months is as follows:

14,000
August
units
14,500
September
units
15,500
October
units
12,600
November
units
11,900
December
units

The company wants to maintain monthly ending inventories of
Material K equal to 20% of the following month’s production needs. On July 31,
this requirement wasn’t met because only 2,500 yards of Material K were on
hand. The cost of Material K is $0.85 per yard. The company wants to prepare a
Direct Materials Purchase Budget for the rest of the year.

The total cost of Material
K to be purchased in August is

A. $48,200.

B.
$40,970.

C. $33,840.

D.
$42,300.

5.The
Charade Company is preparing its Manufacturing Overhead budget for the fourth
quarter of theyear. The budgeted variable factory overhead is $5.00 per
direct-labor hour; the budgeted fixed factory overhead is $75,000 per month, of
which $15,000 is factory depreciation. If the budgeted direct-labor time for
December is 8,000 hours, then total budgeted factory overhead per direct-labor
hour (rounded) is

A. $9.38.

B.
$16.25.

C. $14.38.

D.
$12.50.

6.Vandall Corporation
manufactures and sells a single product. The company uses units as the measure
ofactivity in its budgets and performance reports. During April, the
company budgeted for 7,300 units, but its actual level of activity was 7,340
units. The company has provided the following data concerning the

formulas
used in its budgeting and its actual results for April: Data used in budgeting:

Fixed element

Variable element

per month

per unit

Revenue

___-___

$35.40

Direct
labor

0

$3.30

Direct
materials

0

15.90

Manufacturing
overhead

49,200

1.20

Selling
and

administrative
expenses

26,600

0.10

Total
expenses

$75,800

$20.50

Actual results

for
April:

Revenue

$254,146

Direct
labor

$24,722

Direct
materials

$116,496

Manufacturing
overhead

$59,608

Selling
and

administrative
expenses

$26,494

The
overall revenue and spending variance (i.e., the variance for net operating
income in the revenue and spending variance column on the flexible budget
performance report) for April would be closest to

A. $6,740 F.

B.
$6,144 F.

C. $6,740 U.

D.
$6,144 U.

Use the following
information to answer this question.

Cole
Laboratories makes and sells a lawn fertilizer called Fastgro. The company has
developed standard costs for one bag of Fastgro as follows:

Standard

Standard Cost

Quantity

per bag

Direct
material

20 pounds

$8.00

Direct
labor

0.1 hours

$1.10

Variable
overhead

0.1 hours

$0.40

The company had no beginning inventories of any kind on
January 1. Variable overhead is applied to production on the basis of standard
direct-labor hours. During January, the company recorded the following
activity:


Production
of Fastgro: 4,000 bags

Direct materials purchased: 85,000 pounds at a
cost of $32,300

Direct-labor worked: 390 hours at a cost of $4,875


Variable overhead incurred: $1,475

Inventory of direct materials on January 31: 3,000
pounds

7.The total variance (both
rate and efficiency) for variable overhead for January is

A.
$85 F.

B.
$100 U.

C. $40 F.

D.
$125 F.

Use the following
information to answer this question.

Moorhouse
Clinic uses client visits as its measure of activity. During December, the
clinic budgeted for 3,700 client visits, but its actual level of activity was
3,690 client visits. The clinic has provided the following data concerning the
formulas used in its budgeting and its actual results for December:

Data used in budgeting:

Fixed element

Variable element

per month

per client-visit

Revenue

____-____

$25.10

Personnel
expenses

$27,100

$7.10

Medical
supplies

1,500

4.50

Occupancy
expenses

6,000

1.00

Administrative
expenses

3,000

0.10

Total
expenses

$37,600

$12.70

Actual results

for
December:

Revenue

$96,299

Personnel
expenses

$51,009

Medical
supplies

$17,425

Occupancy
expenses

$9,240

Administrative
expenses

$3,239

8.The spending variance for
medical supplies in December would beclosestto

A. $680 U.

B.
$680 F.

C. $725 U.

D.
$725 F.

Use the
following information to answer this question.

Cole Laboratories makes and sells a lawn fertilizer called
Fastgro. The company has developed standard costs for one bag of Fastgro as
follows:

Standard

Standard
Cost

Quantity

per bag

Direct
material

20 pounds

$8.00

Direct
labor

0.1 hours

$1.10

Variable
overhead

0.1 hours

$0.40

The company had no
beginning inventories of any kind on January 1. Variable overhead is applied to

production on the basis of
standard direct-labor hours. During January, the company recorded the following
activity:


Production
of Fastgro: 4,000 bags

Direct materials purchased: 85,000 pounds at a
cost of $32,300

Direct-labor worked: 390 hours at a cost of $4,875


Variable overhead incurred: $1,475

Inventory of direct materials on January 31: 3,000
pounds

9.The labor rate variance
for January is

A. $475 U.

B.
$585 F.

C. $585 U.

D.
$475 F.

10.There are
various budgets within the master budget. One of these budgets is the
production budget.Which of the following best describes the
production budget?

A. It details the required
direct-labor hours.

B.
It summarizes the costs of producing units for the budget
period.

C. It details the required
raw materials purchases.

D.
It’s calculated based on the sales budget and the desired
ending inventory.

11.Lyons
Company consists of two divisions, A and B. Lyons Company reported a
contribution margin of$50,000 for Division A and had a contribution
margin ratio of 30% in Division B, when sales in Division B were $200,000. Net
operating income for the company was $25,000, and traceable fixed expenses were
$40,000. Lyons Company’s common fixed expenses were

A. $70,000.

B.
$45,000.

C. $40,000.

D.
$85,000.

Use the
following information to answer this question.

The Adams
Company, a merchandising firm, has budgeted its activity for November according
to the following information:


Sales were at $450,000, all for cash.


Merchandise inventory on October 31 was $200,000.

The cash balance on November 1 was $18,000.

Selling and administrative expenses are budgeted
at $60,000 for November and are paid for in cash.

Budgeted depreciation for November is $25,000.

The planned merchandise inventory on November 30
is $230,000.

The cost of goods sold is 70% of the selling price.


All purchases are paid for in cash.

12.The budgeted cash
disbursements for November are

A.
$405,000.

B.
$375,000.

C. $345,000.

D.
$530,000.

Use the following
information to answer this question.

Cole Laboratories
makes and sells a lawn fertilizer called Fastgro. The company has developed
standard costs for one bag of Fastgro as follows:

Standard

Standard
Cost

Quantity

per bag

Direct
material

20 pounds

$8.00

Direct
labor

0.1 hours

$1.10

Variable
overhead

0.1 hours

$0.40

The company had no beginning inventories of any kind on
January 1. Variable overhead is applied to production on the basis of standard
direct-labor hours. During January, the company recorded the following
activity:


Production
of Fastgro: 4,000 bags

Direct materials purchased: 85,000 pounds at a
cost of $32,300

Direct-labor worked: 390 hours at a cost of $4,875


Variable overhead incurred: $1,475

Inventory of direct materials on January 31: 3,000
pounds

13.The materials price
variance for January is

A. $1,700 F.

B.
$1,640 F.

C. $1,640 U.

D.
$1,300 U.

14.A company’s average
operating assets are $220,000, and its net operating income is $44,000. Thecompany
invested in a new project, increasing average assets to $250,000 and increasing
its net operating income to $49,550. What is the project’s residual income if
the required rate of return is 20%?

A. ($600)

B.
$450

C. ($450)

D.
$600

Use the following
information to answer this question.

Cole
Laboratories makes and sells a lawn fertilizer called Fastgro. The company has
developed standard costs for one bag of Fastgro as follows:

Standard Standard
Cost
Quantity per bag
Direct material 20 pounds $8.00

Direct labor

0.1 hours

$1.10

Variable
overhead

0.1 hours

$0.40

The company had no beginning inventories of any kind on
January 1. Variable overhead is applied to production on the basis of standard
direct-labor hours. During January, the company recorded the following
activity:


Production
of Fastgro: 4,000 bags

Direct materials purchased: 85,000 pounds at a
cost of $32,300

Direct-labor worked: 390 hours at a cost of $4,875


Variable overhead incurred: $1,475

Inventory of direct materials on January 31: 3,000
pounds

15.The materials quantity
variance for January is

A. $750 F.

B.
$800 U.

C. $300 U.

D.
$300 F.

Use the following
information to answer this question.

Moorhouse
Clinic uses client visits as its measure of activity. During December, the
clinic budgeted for 3,700 client visits, but its actual level of activity was
3,690 client visits. The clinic has provided the following data concerning the
formulas used in its budgeting and its actual results for December:

Data used in budgeting:

Fixed element

Variable element

per month

per client-visit

Revenue

____-____

$25.10

Personnel
expenses

$27,100

$7.10

Medical
supplies

1,500

4.50

Occupancy
expenses

6,000

1.00

Administrative
expenses

3,000

0.10

Total
expenses

$37,600

$12.70

Actual
results

for
December:

Revenue

$96,299

Personnel
expenses

$51,009

Medical
supplies

$17,425

Occupancy
expenses

$9,240

Administrative
expenses

$3,239

16.The revenue variance for
December would beclosestto

A. $3,429 F.

B.
$3,429 U.

C. $3,680 F.

D.
$3,680 U.

17.
Manufacturing
Cycle Efficiency (MCE) is computed as

A. Process
Time divided by Delivery Cycle Time.

B.
Value-Added Time divided by Throughput Time.

C. Value-Added
Time divided by Delivery Cycle Time.

D.
Throughput Time divided by Delivery Cycle
Time.

Use the following
information to answer this question.

Werber Clinic uses client visits as its measure of activity.
During January, the clinic budgeted for 2,700 client visits, but its actual
level of activity was 2,730 client visits. The clinic has provided the
following data concerning the formulas used in its budgeting and its actual
results for January:

Data used in budgeting:

Fixed element

Variable element

per month

per client-visit

Revenue

___-___

$33.60

Personnel
expenses

$22,100

$8.70

Medical
supplies

1,100

6.60

Occupancy
expenses

5,600

1.60

Administrative
expenses

3,700

0.40

Total
expenses

$32,500

$17.30

Actual results

for
January:

Revenue

$93,408

Personnel
expenses

$46,251

Medical
supplies

$19,348

Occupancy
expenses

$9,508

Administrative
expenses

$4,772

18.The
activity variance for personnel expenses in January would beclosest
to

A. $661 F.

B.
$661 U.

C. $261 U.

D.
$261 F.

19.The budget
or schedule that provides necessary input data for the direct-labor budget is
the

A. production budget.

B.
schedule of cash collections.

C. raw materials purchases
budget.

D.
cash budget.

20.The cash budget must be
prepared before you can complete the

A. schedule of cash
disbursements.

B.
budgeted balance sheet.

C.
production budget.

D.
raw materials purchases budget.
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End of
exam

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