An oil well service company measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. Fixed Element per MonthVariable Element per Well ServicedRevenue $4,200Employee salaries and wages$41,300$1,200Servicing materials $ 500Other expenses$33,000 When the company prepared its planning budget at the beginning of June, it assumed that 33 wells would have been serviced. However, 31 wells were actually serviced during the month.The amount shown for net operating income in the planning budget for the month would have been closest to:

1)     A corporation has provided the following data concerning one of the products in its standard cost system.  InputsStandard Quantity Standard Price Raw materials6.6  grams$7.70 per gram   The company has reported the following actual results for the product for December:Actual output9,200 unitsRaw materials purchased64,500 gramsActual cost of raw materials purchased$548,250Raw materials used in production60,710 grams  The raw materials quantity variance for the month is closest to:

It is important to clearly distinquish between deviations from price standards and from quantity standards since they are normally the responsibility of different managers.

A company’s cost formula for its supplies cost is $1,150 per month plus $15 per frame. For the month of May, the company planned for activity of 613 frames, but the actual level of activity was 605 frames. The actual supplies cost for the month was $10,500. The spending variance for supplies cost for the month would be closest to:

To help assess how well a manager has controlled costs, actual costs should be compared to the costs in the planning budget.

Poorly trained workers could have an unfavorable effect on which of the following variances?   Labor Rate Variance Materials Quantity Variance A) Yes Yes B) No Yes C) Yes No D) No No

A retailer plans to sell 28,000 units of Product X during the month of August. If the company has 6,000 units on hand at the start of the month, and plans to have 9,000 units on hand at the end of the month, how many units of Product X must be purchased from the supplier during the month?       

A performance report includes the activity, revenue and spending variances to compare actual amounts and planned amounts to the flexible budget.

An activity variance is the difference between an actual revenue or cost and the revenue or cost in the flexible budget.

Which of the following costs at a manufacturing company would be treated as a product cost under both absorption and variable costing?