Frekko Company collected the following information:

Using the two variance method, what is the budget variance?

ANS:  B

SUPPORTING CALCULATIONS:

(\$540,000 + \$810,000) – [(\$24 ´ 20,000) + (\$40 ´ 21,000)] = \$30,000 (U)

Using the three variance method, what is the budget variance?

ANS:  A

SUPPORTING CALCULATIONS:

(\$540,000 + \$810,000) – [(\$6 ´ 79,000) + (\$40 ´ 21,000)] = \$36,000 (U)

Using the three variance method, what is the efficiency variance?

ANS:  B

SUPPORTING CALCULATIONS:

[(\$6 ´ 79,000) + (21,000 ´ \$40)] – [(\$6 ´ 80,000) + (21,000 ´ \$40)] = \$6,000 (F)

Using the two variance method, what is the total variance?

ANS:  D

SUPPORTING CALCULATIONS:

(\$540,000 + 810,000) – [(\$24 ´ 20,000) + (\$40 ´ 20,000)] = \$70,000 (U)

73.   Using the two variance method, what is the volume variance?

ANS:  D

SUPPORTING CALCULATIONS:

[(\$6 ´ 80,000) + (21,000 ´ 40)] – [(\$24 ´ 20,000) + (\$40 ´ 20,000)]= \$40,000 (U)

PTS:   1                    OBJ:   9-4

A mix variance is:

ANS:    C