Comfy Inc. uses five yards of wool in each blanket it produces. Comfy’s production budget next year is 30,000 blankets. The anticipated wool inventory at January 1 is 40,000 yards, but the company desires to reduce the inventory to 20,000 yards by the end of the year. Each yard of wool costs $10. How many yards of wool should Comfy purchase?
a. 170,000 yards
b. 130,000 yards
c. 1,300,000 yards
d. 190,000 yards
The normal capacity of Sampsonite Company is 4,000 units per month. At this volume, budgeted fixed and variable factory overhead are $16,000 and $20,000, respectively. In May, actual production was 4,200 units and actual overhead incurred was $37,900.What is the factory overhead application rate at the actual level of production (rounded to the nearest penny)?
Consider the following about Boise Corporation:
Direct materials budget based on 50,000 units produced
Actual direct materials incurred
Actual units produced
Assuming Boise Corporation uses flexible budgeting, what is the variance related to direct materials?
a. $10,000 favorable
b. $50,000 unfavorable
c. $30,000 unfavorable
d. $38,000 unfavorable
Sammy Door Company has budgeted door sales as follows:
Number of Units
Budgeted Sales Dollars
Finished goods inventory at February 28 will be 8,000 units, but the company is making an effort to reduce inventory and its new policy is that inventory at the end of the month should be 10% of the budgeted sales for the following month. How many units should Sammy Door Company produce in March?