1 2 3 Bluestone LLC produces hedge trimmers and has recently

Bluestone LLC produces hedge trimmers and has recently adopted activity-based costing. Overhead information was recently gathered with respect to the operation of the stamping machine: machine setups number of setups.quality control, and number of quality control Inspections. Quality control Inspections are Select one: O a. An activity o b. A driver O c. Neither A nor B

Solution

Question no:1 Answer is Option (b) A Driver Some of the examples of Activites and driver Activity cost pools Drivers Purchasing department number of Purchase orders materials handling Number of Materials requisitions Setup Number of Setups Quality control number of Quality control inspections Supervisors number of Direct labour hours From the Above , quality contrl is Activity , and number of Quality Control Inspecions are Drivers Question no:2 Answer is option (b) $32000 Unfavorable Material Quantiy variance = (Actaul material used * Standard rate ) - ( Standard materils * Standard rate) Actual material used =2000 Units *14ft =28000ft Standard materil = 2000 units *10ft =20000ft material Quantiy variance = (28000ft*$4) - (20,000ft*$4) =$32000 Unfavorable Question no:3 Answer is option (b) Standard price for materials Material Quantiy variance = (Actaul material used * Standard rate ) - ( Standard materils * Standard rate) in material Quantity varlance , Standard price is used , it does not consider the Actual price