Exam 23: Flexible Budgets and Standard Costs

Engineworks Co.provides the following fixed budget data for the year: Required: Prepare a flexible budget performance report for the year using the contribution margin format.

Identify the situation below that will result in a favorable variance.

A favorable variance for a cost means that when compared to the budget,the actual cost is ____________________ than the budgeted cost.

Regarding overhead costs,as volume increases:

Firenze Company's fixed budget for the first quarter of the calendar year appears below.Prepare flexible budgets that show variable costs per unit,fixed costs and two different flexible budgets for sales volumes of 22,000 and 24,000.

A company's flexible budget for 12,000 units of production showed total contribution margin of $24,000 and fixed costs,$16,000.The operating income expected if the company produces and sells 15,000 units is:

If actual price per unit of materials is greater than the standard price per unit of materials,the direct materials price variance is _______________________.

Use the following cost information to calculate the direct labor rate and efficiency variances and indicate whether they are favorable or unfavorable.

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

The purchasing department is usually responsible for the price paid for materials.

Variable budget is another name for:

One possible explanation for direct labor rate and efficiency variances is the use of workers with different skill levels.

The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound.In manufacturing 8,000 units,47,000 pounds of material were used at a cost of $51 per pound.What is the total direct materials cost variance?

A flexible budget is based on a single predicted amount of sales or other activity measure.

Use the following data to find the direct labor rate variance if the company produced 3,500 units during the period.

Grant Co.uses the following standard to produce a single unit of its product: Variable overhead (2 hrs.per unit @ $4/hr. )Actual data for the month show total variable overhead costs of $190,000,and 23,000 units produced.The total variable overhead variance is:

Clevenger Co.planned to produce and sell 30,000 units with a selling price of $10 per unit.Variable costs are expected to be $4 per unit and fixed costs are expected to be $80,000.Clevenger actually produced and sold 37,000 units. Using a contribution margin format: Prepare a fixed budget income statement for the planned level of sales and production.

Static budget is another name for:

Management by exception means that managers focus on the most significant differences between actual costs and standard costs.

A company has established 5 pounds of Material J at $2 per pound as the standard for the material in its Product Z.The company has just produced 1,000 units of this product,using 5,200 pounds of Material J that cost $9,880.The direct materials quantity variance is: