A company uses a standard costing system.
The company's sales budget for the latest period includes 1,500 units of a product with a selling price of
$400 per unit.
The product has a budgeted contribution to sales ratio of 30%.
Actual sales for the period were 1,630 units at a selling price of $390 per unit.
The actual contribution to sales ratio was 28%.
The sales volume contribution variance for the product for the latest period is:

• A.$32, 900 F
• B.$17, 800 F
• C.$15, 600 F
• D.$55, 600 F

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A company is preparing its annual budget and is estimating the number of units of Product W that it will sell in each quarter of year 2. Past experience has shown that the trend for sales of the product is represented by the following relationship:

Calculate the expected unit sales of Product W for each quarter of year 2, after adjusting for seasonal variations using the multiplicative model.

• A.The sales forecast for year 2 Quarter 4 = 38,100 units
• B.The sales forecast for year 2 Quarter 4 = 25,100 units
• C.The sales forecast for year 2 Quarter 4 = 35,100 units
• D.The sales forecast for year 2 Quarter 4 = 22,600 units

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Where sales volume is the principal budget factor, which of the following is the correct order in which budgets have to be prepared?

• A.Production budget, sales budget, material usage budget, material purchases budget
• B.Prodcution budget, material usage budget, material purchases budget, sales budget
• C.Sales budget, production budget, material usage budget, material purchases budget
• D.Sales budget, production budget, materials purchases budget, material usage budget

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JRL manufactures two products from different combinations of the same resources. Unit selling prices and unit cost details for each product are as follows:

Identify, using graphical linear programming, the weekly production schedule for products J and L that will maximize the profits of JRL during the next four weeks.

• A.The solution from the graph is to produce 310 units of J and 280 units of L. (A simplex solution shows the true optimum to be 308.333 units of J and 283.333 units of L.)
• B.The solution from the graph is to produce 315 units of J and 290 units of L. (A simplex solution shows the true optimum to be 316.333 units of J and 293.333 units of L.)
• C.The solution from the graph is to produce 317 units of J and 270 units of L. (A simplex solution shows the true optimum to be 316.666 units of J and 269.666 units of L.)
• D.The solution from the graph is to produce 330 units of J and 280 units of L. (A simplex solution shows the true optimum to be 332.333 units of J and 283.333 units of L.)
• E.The solution from the graph is to produce 312 units of J and 295 units of L. (A simplex solution shows the true optimum to be 312.333 units of J and 294.999 units of L.)
• F.The solution from the graph is to produce 330 units of J and 290 units of L. (A simplex solution shows the true optimum to be 332.333 units of J and 293.333 units of L.)

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Reported profits using activity-based costing (ABC) may be different from reported profits using marginal costing because ABC:

• A.includes fixed costs within the cost of inventory.
• B.leads to a different selling price.
• C.ignores variable costs.
• D.treats materials as the only truly variable cost.

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