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Exam 8: Flexible Budgets and Standard Costing

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Question 61

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An unfavorable variance is recorded with a debit.

A) True
B) False

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Question 62

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A budget performance report that includes variances can have variances caused by both price differences and quantity differences.

A) True
B) False

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Question 63

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Use the following data to find the direct labor rate variance. $\begin{array}{llcc} \text { Direct labor standard (4 hrs. @\$7/hr.) } & \text {\$ 28 per unit } \\ \text { Actual hours worked per unit } & \text { 3.5 hours } \\ \text { Actual units produced } & \text { 3,500 units } \\ \text { Actual rate per hour } & \text { \$ 7.50 } \\\end{array}$

The fixed overhead variance can be broken down into the _________________ variance and the _________________ variance.

Whistler Company determined that in the production of their products last period, they had a favorable price variance and an unfavorable quantity variance for direct materials.What might be the cause of this pattern of variances?

An analytical technique used by management to focus on the most significant variances and give less attention to the areas where performance is satisfactory is known as:

A flexible budget expresses variable costs on a per unit basis and fixed costs on a total basis.

The standard materials cost to produce one unit of Product K is 7 pounds of material at a standard price of $32 per pound.In manufacturing 8,000 units, 54,000 pounds of material were used at a cost of $30 per pound.What is the total direct material cost variance?

The following information describes a company's use of direct labor in a recent period: $\begin{array} { l r } \text { Actual hours used } & 45,000 \\\text { Actual rate per hour } & \$ 15 \\\text { Standard rate per hour } & \$ 14 \\\text { Standard hours for units produced } & 47,000\end{array}$ -The direct labor efficiency variance is:

Variable budget is another name for:

Duval, Inc., budgets direct materials at $1/liter and requires 4 liters per unit of finished product.April's activities show usage of 832 liters to complete 196 units at a cost of $798.72. Calculate the direct materials price and quantity variances.

The costs that should be incurred under normal conditions to produce a specific product or component or to perform a specific service are:

Falcon Company's output for a period was assigned the standard direct labor cost of $17,160.If the company had a favorable direct labor rate variance of $1,000 and an unfavorable direct labor efficiency variance of $275, what was the total actual cost of direct labor incurred during the period?

The amounts in a flexible budget are based on one expected level of sales or production.

The direct materials quantity variance is:

Although a fixed budget is only useful over the relevant range of operations, a flexible budget is useful over all possible production levels.

The difference between the actual sales and the flexible budget sales is called the ______________________ variance.

An internal report that compares actual cost and sales amounts with budgeted amounts and identifies the differences between them as favorable or unfavorable variances is called a:

Overhead cost variance is:

Fixed budget performance reports compare actual results with the expected amounts in the fixed budget.