Freiling Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs. There is no variable manufacturing overhead. The standard cost card for the company's only product is as follows:InputsStandard Quantityor HoursStandard Price or RateStandard CostDirect materials3.1kilos$6.00per kilo$18.60Direct labor0.90hours$22.00per hour 19.80Fixed manufacturing overhead0.90hours$9.50per hour 8.55Total standard cost per unit $46.95During the year, the company assigned direct labor costs to work in process. The direct labor workers (who were paid in cash) worked 14,890 hours at an average cost of $22.80 per hour.Assume that all transactions
are recorded on the below worksheet, which is similar to the worksheet shown in your text except that it has been divided into two parts so that it fits on one page. The beginning balances in each of the accounts have been given. PP&E (net) stands for Property, Plant, and Equipment net of depreciation.?CashRaw MaterialsWork in ProcessFinished GoodsPP&E (net)?1/1$1,090,000$53,940$0$79,815$600,000=?Materials Price VarianceMaterials Quantity VarianceLabor Rate VarianceLabor Efficiency VarianceFOH Budget VarianceFOH Volume VarianceRetained Earnings1/1$0$0$0$0$0$0$1,823,755When the direct labor cost is recorded in transaction (c) above, which of the following entries will be made?
A. ($8,800) in the Labor Efficiency Variance column
B. ($8,800) in the Labor Rate Variance column
C. $8,800 in the Labor Efficiency Variance column
D. $8,800 in the Labor Rate Variance column
Answer: A
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A. promote collaboration B. inhibit the flow of goods and services C. increase the customer’s exposure to as many products as possible D. circumvent government regulations
Which of the following is based on the assumption that management can create accurate tactical plans based on the overall aggregate forecast and then divide the resources across the individual products and services during the detailed operational planning and control activities?
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Which of the following statements about liability losses is true?
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Using the income statement and balance sheet constructed in (1) and (2), compute the following ratios. Compare the results with the industry averages. What strengths and weaknesses are apparent? ? RATIO INDUSTRY AVERAGE Current ratio 2:1 Acid test (quick ratio) 1:1 Inventory turnover a. annual sales 2.5 b. cost of goods sold 1.2 Receivables turnover a. annual credit sales 5.0x b. annual sales 6.0x Average collection period 75 days (days sales outstanding) Operating profit margin 26% Net profit margin 19% Return on assets 10% Return on equity 15% Debt/equity 33% Debt ratio (debt/total assets) 25% Times?interest?earned 7.1x ADDITIONAL INFORMATION:
last year's inventory $40,000 credit sales $90,000 What will be an ideal response?