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Exam 11: Standard Costs and Variances

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Question 21

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The standard variable overhead cost rate for Harris Manufacturing is $25.00 per unit. Budgeted fixed overhead cost is $48,100. Harris Manufacturing budgeted 3700 units for the current period and actually produced 3900 finished units. What is the fixed overhead volume variance? Assume the allocation base for fixed overhead costs is the number of units expected to be produced.

A) $5000 favorable
B) $2600 favorable
C) $5000 unfavorable
D) $2600 unfavorable

E) A) and D)
F) A) and C)

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Question 22

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Litchfield Industries gathered the following information for the month ended June 31: The static budget volume is 5000 units: Overhead flexible budget: Actual production was 14,000 units. Actual overhead costs were $27,000 for variable costs and $38,000 for fixed costs. Actual machine hours worked were 17,000 hours. What is the standard variable overhead rate per machine hour?

A) $2.16
B) $3.30
C) $1.39
D) $3.00

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

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Question 23

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The Armstrong Corporation developed a flexible budget for its production process. Armstrong budgeted to use 12,000 pounds of direct material with a standard cost of $14 per pound to produce 14,000 units of finished product. Armstrong actually purchased 24,000 pounds and used 15,000 pounds of direct material with a cost of $30 per pound to produce 14,000 units of finished product. Given these results, what is Armstrong's direct material quantity variance?

Which of the following shows the effect on work in process inventory when assigning direct labor costs to the production process?

The ________ variance "measures how well the business keeps prices of direct labor inputs within standards."

The Chilton Corporation specializes in manufacturing one type of desk lamp. Chilton allocates variable manufacturing overhead costs on the basis of machine hours. Chilton budgeted 0.5 machine hours per lamp and allocates overhead at a rate of $1.70 per machine hour. Last year Chilton manufactured 20,000 lamps, used 160,000 machine hours and incurred actual overhead costs of $192,000. What was Chilton's variable manufacturing overhead rate variance last year?

Tommy's Toys produces two types of toys: trains and dolls. Tommy's uses stainless steel to manufacture the trains and plastic to manufacture the dolls. Information regarding the usage of steel and plastic for the past year follows: What is the standard direct material price per pound for the plastic in the dolls?

How is the variable overhead efficiency variance calculated?

The direct materials price variance is the difference between the Actual Price (AP)and the Standard Price (SP), multiplied by the Actual Quantity Purchased (AQP).

Identify four advantages of standard costs and variances.

Dozen Bakery makes cupcakes and cookies. Dozen gathered the following information for the current year regarding its use of flour and butter (flour is a direct material for cupcakes and butter is a direct material for cookies) : What is the standard direct material price per pound for the butter in the cookies?

Bling Corporation manufactures jeweled cell phone cases. The following materials standards have been established for the jewels used to decorate the cell phone cases. The following data relates to the production of the cell phone cases during June: What is the materials price variance for jewels in June?

Frames Incorporated budgeted one and one half hours of direct labor per unit at $10.75 per hour to produce 550 units of product. The 550 units were completed using 1650 hours of direct labor at $11.25 per hour. What is the direct labor rate variance?

The ________ department may be responsible to incur a "direct labor rate variance."

Squeaky Clean produces commercial strength cleansing supplies. Two of its main products are window cleanser that uses ammonia, and floor cleanser that uses bleach. Information for the most recent period follows: What is the direct materials price variance for ammonia?

Luka Company uses the following overhead standard costs for a single unit of product: 7.5 hours at $14.00 per hour. Actual data for the month showed overhead costs of $174,000 for 2000 units produced. What is the difference between actual overhead costs and standard overhead costs allocated to products?

Which variance is directly impacted if a worker drops the raw material during production and the raw material must be discarded?

The actual cost of direct materials is $13.00 per pound. The standard cost per pound is $8.75. During the current period, 9900 pounds of direct materials were used in production and 18,500 pounds were purchased. The standard quantity of direct materials for actual units produced is 16,200 pounds. How much is the direct materials quantity variance?

McNabb Corporation makes shoe polish. The standard direct materials quantity is .5 pounds per container at a cost of $2.25 per pound. The actual usage for the production of 33,000 containers was .55 pounds per cushion at an actual cost of $2.20 per pound. Calculate the direct materials price variance and the direct materials quantity variance.

Cost of goods sold is shown at which of the following on a standard cost income statement?