Exam 7: Standard Costing and Variance Analysis

Practical standards are the most effective standards for controlling and motivating workers.

Stonegate Company The following information is available for Stonegate Company for the current year: Standard: Material X: 3.0 pounds per unit @ $4.20 per pound Material Y: 4.5 pounds per unit @ $3.30 per pound Class S labor: 3 hours per unit @ $10.50 per hour Class US labor: 7 hours per unit @ $8.00 per hour Actual: Material X: 3.6 pounds per unit @ $4.00 per pound (purchased and used) Material Y: 4.4 pounds per unit @ $3.25 per pound (purchased and used) Class S labor: 3.8 hours per unit @ $10.60 per hour Class US labor: 5.7 hours per unit @ $7.80 per hour Stonegate Company produced a total of 45,750 units. Refer to Stonegate Company.Compute the labor rate,mix,and yield variances (round to the nearest dollar).

The usage variance reflects the difference between the quantity of inputs used and the standard quantity allowed for the output of a period.

Hazelton Company Hazelton Company has the following information available for December when 3,500 units were produced (round answers to the nearest dollar). Refer to Hazelton Company.What is the material price variance (based on quantity purchased)?

Discuss how variable and fixed overhead application rates are calculated.

Classic Cleaning Company Classic Cleaning Company manufactures a cleaning solvent.The company employs both skilled and unskilled workers.To produce one 55-gallon drum of solvent requires Materials A and B as well as skilled labor and unskilled labor.The standard and actual material and labor information is presented below: Standard: Material A: 30.25 gallons @ $1.25 per gallon Material B: 24.75 gallons @ $2.00 per gallon Skilled Labor: 4 hours @ $12 per hour Unskilled Labor: 2 hours @ $ 7 per hour Actual: Material A: 10,716 gallons purchased and used @ $1.50 per gallon Material B: 17,484 gallons purchased and used @ $1.90 per gallon Skilled labor hours: 1,950 @ $11.90 per hour Unskilled labor hours: 1,300 @ $7.15 per hour During the current month Classic Cleaning Company manufactured 500 55-gallon drums. Round all answers to the nearest whole dollar. Refer to Classic Cleaning Company.What is the labor yield variance?

A flexible budget is an effective tool for budgeting factory overhead.

Ritchie Company Ritchie Company uses a standard cost system for its production process.Ritchie Company applies overhead based on direct labor hours.The following information is available for July: Refer to Ritchie Company Using the four-variance approach,what is the volume variance?

Ponca City Company uses a standard cost accounting system.The following overhead costs and production data are available for September: Standard fixed OH rate par DLH $~~~~~~~~~~~~~~~~~~~~~~~~~~~~$ $1 Standard variable OH rate ga DLH $~~~~~~~~~~~~~~~~~~~~~~~~~$ $4 Budgeted monthly DLHs $~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~$ 40,000 Actual DLHs vorked $~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~$ 39,500 Standard DLHs allowed far actual production $~~~~~~~~~~~$ 39,000 Ovarall OH variance-favorable $~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~$ 52,000 The total applied manufacturing overhead for September should be

Genesis Company Genesis Company uses a standard cost system for its production process and applies overhead based on direct labor hours.The following information is available for September when Genesis produced 5,000 units: Standard: DLH per unit 3.00 Variable overhead per DLH \ 1.80 Fixed overhead per DLH \ 3.25 Budgeted variable overhead \ 27,250 Budgeted fixed overhead \ 49,500 Actual: Direct labor hours 16,000 Variable overhead \3 1,325 Fixed overhead \4 9,750 Refer to Genesis Company.Using the one-variance approach,what is the total overhead variance?

Hazelton Company Hazelton Company has the following information available for December when 3,500 units were produced (round answers to the nearest dollar). Refer to Hazelton Company.What is the labor rate variance?

Wimberly Company Wimberly Company has the following information available for March when 4,200 units were produced (round answers to the nearest dollar). Refer to Wimberly Company.What is the material price variance (based on quantity purchased)?

Ideal standards generally yield unfavorable variances.

Truman Company Truman Company applies overhead based on direct labor hours and has the following available for the current month: Refer to Truman Company.Compute all the appropriate variances using the four-variance approach.

The formula for usage variance is (AQ - SQ)* SP.

Favorable variances are represented by debit balances in the overhead account.

Wimberly Company Wimberly Company has the following information available for March when 4,200 units were produced (round answers to the nearest dollar). Refer to Wimberly Company.What is the labor rate variance?

Managers have no ability to control the budget variance.

Green Acres Corporation produces a product using the following standard proportions and costs of material: A recent production run yielding 100 output pounds required an input of: Required: Material price,mix,and yield variances.

The effect of substituting a non-standard mix of materials during the production process is referred to as a material mix variance.