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Question
Product A requires 5 machine hours per unit to be produced, Product B requires only 3 machine hours per unit, and the company's productive capacity is limited to 240,000 machine hours. Product A sells for $16 per unit and has variable costs of $6 per unit. Product B sells for $12 per unit and has variable costs of $5 per unit. Assuming the company can sell as many units of either product as it produces, the company should:
A. Produce only Product A.
B. Produce only Product B.
C. Produce equal amounts of A and B.
D. Produce A and B in the ratio of 62.5% A to 37.5% B.
E. Produce A and B in the ratio of 40% A and 60% B.
Answer
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Related questions
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Although a fixed budget is only useful over the relevant range of operations, a flexible budget is useful over all possible production levels.
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A fixed budget performance report never provides useful information for evaluating variances.
Q:
A variable or flexible budget is so named because it only focuses on variable costs.
Q:
Use the following information to prepare a budgeted income statement for Arbor Company for the month of June.
a. Beginning cash balance on June 1 is $52,000.
b. Cash receipts from sales: 40% is collected in the month of sale, 50% in the next month, and 10% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: April (actual), $1,450,000, May (actual), $1,600,000, and June (budgeted), $1,700,000.
c. Payments on merchandise purchases: 80% in the month of purchase and 20% in the month following purchase. Purchases amounts are May (actual), $830,000; and June (budgeted), $867,000.
d. Budgeted cash disbursements for salaries in June: $260,000. Salaries payable on May 31 are $60,000 and are expected to be $50,000 on June 30.
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f. Other cash expenses budgeted for June: $282,000.
g. Accrued income taxes due in June: $48,000.
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Q:
Use the following information to prepare the June cash budget for Arbor Company. It should show expected cash receipts and cash disbursement for the month and the cash balance expected on June 30.
a. Beginning cash balance on June 1 is $52,000.
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f. Other cash expenses budgeted for June: $282,000.
g. Accrued income taxes due in June: $48,000.
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What are the four steps in the effective management of variance analysis?
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Q:
When recording the journal entry for labor, the Goods in Process Inventory account is
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D. Credited for actual labor cost.
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Q:
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E. $3,695U.
Q:
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45,000 Actual rate per hour ..
$15 Standard rate per hour ..
$14 Standard hours for units produced ...
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B. $28,000 unfavorable.
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E. $17,000 unfavorable.
Q:
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A retail store has three departments, A, B, and C, each of which has four full-time employees. The store does general advertising that benefits all departments. Advertising expense totaled $90,000 for the current year, and departmental sales were: Department A $356,250
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Q:
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Q:
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B. $120 favorable.
C. $400 favorable.
D. $520 favorable.
E. $520 unfavorable.
Q:
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Q:
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B. Budgeting purposes only.
C. Control purposes only.
D. Planning and control purposes.
E. Planning and budgeting purposes.