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Exam 7: Performance Evaluation Using Variances From Standard Costs

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Question 41

Multiple Choice

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The total manufacturing cost variance is

A) the difference between actual costs and standard costs for units produced
B) the flexible budget variance plus the time variance
C) the difference between planned costs and standard costs for units produced
D) none of the answers are correct

E) B) and D)
F) B) and C)

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Question 42

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Financial reporting systems that are guided by the principle of exceptions concept focus attention on variances from standard costs.

A) True
B) False

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Question 43

Multiple Choice

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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

Aquatic Corp.'s standard material requirement to produce one Model 2000 is 15 pounds of material @ $110.00 per pound.Last month, Aquatic purchased 170,000 pounds of material at a total cost of $17,850,000.It used 162,000 pounds to produce 10,000 units of Model 2000. Calculate the materials price variance and materials quantity variance, and indicate whether each variance is favorable or unfavorable.

Prepare an income statement for the year ended December 31, through the gross profit for Baxter Company using the following information.Baxter Company sold 8,600 units at $125 per unit.Normal production is 9,000 units.Do not round fixed overhead rate calculation when determining fixed factory overhead volume variance.

Ruby Company produces a chair that requires 5 yards of material per unit.The standard price of one yard of material is $7.50.During the month, 8,400 chairs were manufactured, using 43,700 yards at a cost of $7.30 per yard. Determine the a price variance, b quantity variance, and c total cost variance.

The direct labor rate variance is

Which of the following is not a reason standard costs are separated into two components?

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 the a price variance, b quantity variance, and c cost variance.

A budget performance report compares actual results with the budgeted amounts and reports differences for possible investigation.

The total manufacturing cost variance consists of

?If the actual quantity of direct materials used in producing a commodity differs from the standard quantity, the variance is a

Compute the standard cost for one hat, based on the following standards for each hat: Standard material quantity: 3/4 yard of fabric at $5.00 per yard Standard labor: 2 hours at $5.75 per hour Factory overhead: $3.20 per direct labor hour

Calculate the direct labor time variance.

The following data relate to direct labor costs for the current period: Standard costs 36,000 hours at $22.00 Actual costs 35,000 hours at $23.00 What is the direct labor time variance?

The difference between the standard cost of a product and its actual cost is called a variance.

Morocco Desk Co.purchases 6,000 feet of lumber at $6.00 per foot.The standard price for direct materials is $5.00.The entry to record the purchase and unfavorable direct materials price variance is

What is the direct labor rate variance?

Define ideal and currently attainable standards.Which type of standard should be used and why?

Match the following descriptions with the term a-e it describes: -actual cost > standard cost at actual volumes