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Exam 8: Evaluating Variances From Standard Costs

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Question 61

Multiple Choice

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The principle of exceptions allows managers to focus on correcting variances between

A) standard costs and actual costs
B) variable costs and actual costs
C) competitor's costs and actual costs
D) competitor's costs and standard costs

E) B) and C)
F) A) and C)

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Question 62

Multiple Choice

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The following data relate to direct labor costs for February: What is the direct labor rate variance?

A) $14,000 favorable
B) $14,000 unfavorable
C) $15,400 favorable
D) $15,400 unfavorable

E) B) and D)
F) All of the above

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Question 63

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The following data is given for the Zoyza Company: Overhead is applied on standard labor hours. The fixed factory overhead volume variance is

If the actual direct labor hours spent producing a commodity differs from the standard hours, the variance is a

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows: The amount of the variable factory overhead controllable variance is

The standard costs and actual costs for direct labor for the manufacture of 2,500 actual units of product are as follows: The direct labor rate variance is

Standard and actual costs for direct labor for the manufacture of 1,000 units of product were as follows: Actual costs: 950 hours at $37 Standard costs: 975 hours at $36 Determine the direct labor: (a) time variance (b) rate variance (c) total direct labor cost variance.

The St. Augustine Corporation originally budgeted for $360,000 of fixed overhead at 100% normal production capacity. Production was budgeted to be 12,000 units. The standard hours for production were 5 hours per unit. The variable overhead rate was $3 per hour. Actual fixed overhead was $360,000 and actual variable overhead was $170,000. Actual production was 11,700 units. The variable factory overhead controllable variance is

Hsu Company produces a part with a standard of 5 yards of material per unit. The standard price of one yard of material is $8.50. During the month, 8,800 parts were manufactured, using 45,700 yards of material at a cost of $8.30. Determine: (a) price variance (b) quantity variance (c) cost variance.

The following data is given for the Stringer Company: Overhead is applied on standard labor hours. The direct materials quantity variance is:

Accounting systems that use standards for product costs are called standard cost systems.

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual was 800 units at $12, the direct materials price variance was $800 favorable.

Greyson Company produced 8,300 units of product that required 4.25 standard hours per unit. Determine the standard fixed overhead cost per unit at 27,000 hours, which is 100% of normal capacity, if the favorable fixed factory overhead volume variance is $14,895.

The following data relate to direct labor costs for February: What is the direct labor time variance?

Standards are set for only direct labor and direct materials.

Though favorable fixed factory overhead volume variances are usually good news, if inventory levels are too high, additional production could be harmful.

The following data relate to direct materials costs for February: Materials cost per yard: standard, $2.00; actual, $2.10 Standard yards per unit: standard, 4.5 yards; actual, 4.75 yards Units of production: 9,500 Calculate the total direct materials cost variance.

The following information relates to manufacturing overhead for the Chapman Company: Standards: Total fixed factory overhead - $450,000 Estimated production - 25,000 units (100% of normal capacity) Overhead rates are based on machine hours Standard hours allowed per unit produced - 2 Fixed overhead rate - $9.00 per machine hour Variable overhead rate - $3.50 per hour Actual: Fixed factory overhead - $450,000 Production - 24,000 units Variable overhead - $170,000 Compute: (a) the fixed factory overhead volume variance (b) the variable factory overhead controllable variance (c) the total factory overhead cost variance.

Using the following information, prepare a factory overhead flexible budget for Jacob Company where the total factory overhead cost is $206,500 at normal capacity (100%). Include capacity at 60%, 80%, 100%, and 120%. Total variable cost is $15.25 per unit and total fixed costs are $54,000. The information is for month ended October 31.  (Hint: Determine units produced at normal capacity.)

A company must choose either a standard system or nonfinancial performance measures to evaluate the performance of a company.