Management Accounting Exam – March 2020
Note: All exam materials, questions, and solutions are the property of the course
coordinators who developed the exam content. Any unauthorized sharing,
reproduction or distribution is strictly prohibited!
Question 1 (20 points)
AllGood Inc. produces one standard product “Sunshine”. AllGood’s actual operating results for
February are as follows:
Actual Results
Units sold 10,900
Revenues € 817,500
Direct materials € 201,190
Direct labor € 104,628
Factory overhead € 94,165
Selling and administrative expenses € 17,505
Operating income € 400,012
During February, the following flexible budget variances are observed:
- Direct materials price variance: 4,100 Favorable (F)
- Direct materials efficiency variance: 1,250 Unfavorable (U)
- Direct labor rate variance: 10,028 U
- Direct labor efficiency variance: 1,075 F
- Total flexible budget variance (operating income): 3,127 F
There was no inventory of finished production or of work in process at either the beginning or end
of February.
1
, Question 1a (10 points)
Complete the missing parts of the flexible budget for February in the provided table below based
on the above information about the flexible budget variances. Show all your calculations.
Actual results Flexible budget
Units sold 10,900 10,900
Revenues 817,500 806,600
Direct materials 201,190 204,040
Direct labor 104,628 95,675
Factory overhead 94,165 92,495
Selling and
17,505 17,505
administrative expenses
Operating income 400,012 396,885
2
Note: All exam materials, questions, and solutions are the property of the course
coordinators who developed the exam content. Any unauthorized sharing,
reproduction or distribution is strictly prohibited!
Question 1 (20 points)
AllGood Inc. produces one standard product “Sunshine”. AllGood’s actual operating results for
February are as follows:
Actual Results
Units sold 10,900
Revenues € 817,500
Direct materials € 201,190
Direct labor € 104,628
Factory overhead € 94,165
Selling and administrative expenses € 17,505
Operating income € 400,012
During February, the following flexible budget variances are observed:
- Direct materials price variance: 4,100 Favorable (F)
- Direct materials efficiency variance: 1,250 Unfavorable (U)
- Direct labor rate variance: 10,028 U
- Direct labor efficiency variance: 1,075 F
- Total flexible budget variance (operating income): 3,127 F
There was no inventory of finished production or of work in process at either the beginning or end
of February.
1
, Question 1a (10 points)
Complete the missing parts of the flexible budget for February in the provided table below based
on the above information about the flexible budget variances. Show all your calculations.
Actual results Flexible budget
Units sold 10,900 10,900
Revenues 817,500 806,600
Direct materials 201,190 204,040
Direct labor 104,628 95,675
Factory overhead 94,165 92,495
Selling and
17,505 17,505
administrative expenses
Operating income 400,012 396,885
2
