The budgeted production of SunCo Inc. is 9,000 units per month. Each unit requires 30 minutes of direct labor to complete. The direct labor rate is $50 per hour. Calculate the budgeted cost of direct labor for the month.

$450,000

$225,000

$112,500

$90,000

Star Stapler Company prepared the following static budget for the year 2015:

Static Budget Units/Volume 6,000 Per Unit Sales Revenue $7.00 $42,000 Variable Expenses $1.50 9,000 Contribution Margin 33,000 Fixed Expenses 3,000 Operating Income/(Loss) 30,000

If a flexible budget was prepared at a volume of 7,000, calculate the amount of operating income.

$43,000

$35,500

$30,000

$10,500

BigTex Furnishings Company has prepared a static budget at the beginning of the month. At the end of the month, the following information has been retrieved from the records.

Static Budget

Sales volume: 1,000 units: Price: $70 per unit Variable expense: $32 per unit: Fixed expenses: $37,500 per month Operating income: $500

Actual Results

Sales volume: 900 units: Price $75 per unit Variable expenses: $35 per unit: Fixed expenses: $33,000 Operating income: $6,510

Calculate the flexible budget variance for Sales Revenue.

$4,950 F

$4,950 U

$3,260 U

$3,260 F

Lone Star Hardware Company has prepared a static budget at the beginning of the month. At the end of the month, the following information has been retrieved from the records.

Static Budget

Sales volume: 2,000 units: Price: $50 per unit Variable expense: $12 per unit: Fixed expenses: $25,000 per month Operating income: $51,000

Actual Results

Sales volume: 1,800 units: Price $58 per unit Variable expenses: $16 per unit: Fixed expenses: $35,000 Operating income: $40,600

Calculate the flexible budget variance for Operating Income.

$5,590 U

$5,940 F

$4,500 U

$2,800 U

Aaron Inc. estimates direct labor costs and manufacturing overhead costs for the coming year to be $800,000 and $500,000, respectively. Aaron allocates overhead costs based on machine hours. The estimated total labor hours and machine hours for the coming year are 16,000 hours and 10,000 hours, respectively. What is the predetermined overhead allocation rate?

$80.00 per machine hour

$31.25 per labor hour

$81.25 per labor hour

$50.00 per machine hour