The purchase of an asset for cash will a. increase total assets ...

[yoroshambo]

The purchase of an asset for cash will
 a. increase total assets and decrease total liabilities.
  b. have no effect on total assets or total liabilities.
  c. increase total assets and increase total liabilities.
  d. increase total assets and increase total owner's equity.
  e. increase total assets and decrease total owner's equity.

Question 2

4-variance analysis, fill in the blanks.
 
  Rozema, Inc., produces chemicals for large biotech companies. It has the following data for manufacturing overhead costs during August 2015:
 
  Use F for favorable and U for unfavorable:

[manuelcastillo]

Answer to Question 1

B

Answer to Question 2

Variable Fixed
1. Spending variance
2. Efficiency variance
3. Production-volume variance
4. Flexible-budget variance
5. Underallocated (overallocated) MOH 200 U
2,200 F
NEVER
2,000 F
2,000 F 4,600 U
NEVER
1,200 F
4,600 U
3,400 U

These relationships could be presented in the same way as in Exhibit 8- 4.

Actual Costs
Incurred
(1)

Actual Input Qty.
 Budgeted Rate
(2) Flexible Budget:
Budgeted Input Qty.
Allowed for
Actual Output
 Budgeted Rate
(3) Allocated:
Budgeted Input Qty.
Allowed for
Actual Output
 Budgeted Rate
(4)
Variable
MOH 31,000 30,800 33,000 33,000

Actual Costs Incurred
(1)
Same Budgeted
Lump Sum
(as in Static Budget)
Regardless of
Output Level
(2) Flexible Budget:
Same Budgeted
Lump Sum
(as in Static Budget)
Regardless of
Output Level
(3)
Allocated:
Budgeted Input Qty.
Allowed for
Actual Output
 Budgeted Rate
(4)
Fixed
MOH 18,000 13,400 13,400 14,600

An overview of the four overhead variances is:

4-Variance
Analysis
Spending
Variance
Efficiency
Variance Production - Volume
Variance
Variable
Overhead
200 U
2,200 F
Never a variance
Fixed
Overhead
4,600 U
Never a variance
1,200 F