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Exam 21: Flexible Budgets and Standard Costs

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Question 51

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Jefferson Co.uses the following standard to produce a single unit of its product: variable overhead $6 (2 hrs.per unit @ $3/hr.) .Actual data for the month show variable overhead costs of $150,000,and 24,000 units produced.The total variable overhead variance is:

A) $6,000F.
B) $6,000U.
C) $78,000U.
D) $78,000F.
E) $0.

F) A) and C)
G) All of the above

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Question 52

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Variable budget is another name for a flexible budget.

A) True
B) False

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Question 53

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What are the four steps in the effective management of variance analysis?

Cavern Company's output for the current period results in a $5,250 unfavorable direct material price variance.The actual price per pound is $56.50 and the standard price per pound is $55.00.How many pounds of material are used in the current period?

A management approach that focuses attention on significant differences from plans and gives less attention to areas where performance is reasonably close to standards is known as ________.

Fletcher Company collected the following data regarding production of one of its products. -Compute the total direct labor cost variance.

The following information comes from the flexible budget performance report of Jackal Corp.for the current period.Prepare the journal entries to charge direct materials and direct labor costs to work in process and the materials and labor variances to their proper accounts.

Standard costs are:

A volume variance occurs when the company operates at a different capacity level than was expected.

A budget based on several different levels of activity,often including both a best-case and worst-case scenario,is called a:

Claymore Corp.has the following information about its standards and production activity for September.The volume variance is:

Explain how favorable and unfavorable variances impact income.

The following information comes from the records of Magno Co.for the current period. a.Compute the overhead controllable and volume variances.In each case,state whether the variance is favorable or unfavorable. b.Prepare the journal entries to charge overhead costs to work in process and the overhead variances to their proper accounts. Factory overhead (based on budgeted production of 24,500 units) Variable overhead $2.25/direct labor hour Fixed overhead $1.95/direct labor hour

Differences between actual costs and standard costs are known as ________.These differences may be subdivided into ________ and ________.

A job was budgeted to require 3 hours of labor per unit at $11.00 per hour.The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $269,500.What is the direct labor efficiency variance?

Gala Enterprises collected the following data regarding production of one of its products.Compute the variable overhead cost variance,the variable overhead spending variance,the variable overhead efficiency variance,the fixed overhead cost variance,the fixed overhead spending variance,and the fixed overhead volume variance.

A company's flexible budget for 12,000 units of production showed sales,$48,000; variable costs,$18,000; and fixed costs,$16,000.The sales expected if the company produces and sells 16,000 units is:

Milltown Company sells used cars.During the month,the dealership sold 22 cars at an average price of $15,000 each.The budget for the month was to sell 20 cars at an average price of $16,000.Compute the dealership's total sales variance for the month.

While companies strive to achieve ideal standards,reality implies that some loss of materials usually occurs with any process.

Based on a predicted level of production and sales of 22,000 units,a company anticipates total variable costs of $99,000,fixed costs of $30,000,and operating income of $36,000.Based on this information,the budgeted amount of fixed costs for 20,000 units would be: