Exam 7: Standard Costing and Variance Analysis

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)?

The difference between the standard hours worked for a specific level of production and the actual hours worked is the labor efficiency variance.

The overhead variance calculated as total budgeted overhead at the actual input production level minus total budgeted overhead at the standard hours allowed for actual output is the

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 total material price variance?

Define the following terms: standard cost system, total variance, material price variance, and labor efficiency variance.

Hidalgo Company has made the following information available for its production facility for the current month. Fixed overhead was estimated at 19,000 machine hours for the production cycle. Actual machine hours for the period were 18,900, which generated 3,900 units. Hidalgo Company's standard costs are as follows: Determine the following items:

The material price variance (computed at point of purchase) is

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: Refer to Genesis Company. Using the three-variance approach, what is the efficiency variance?

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 rate variance?

Standard costs

The fixed overhead application rate is a function of a predetermined activity level. If standard hours allowed for good output equal the predetermined activity level for a given period, the volume variance will be

When multiple materials are used, the difference between the total quantity and the standard quantity of output when a nonstandard mix of materials is used is known as the _________________________ variance.

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 material price, mix, and yield variances (round to the nearest dollar).

A large labor efficiency variance is prorated to which of the following at year-end?

The difference between budgeted and applied fixed factory overhead is referred to as a fixed overhead volume variance.

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

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?

National Toy Company National Toy Company has developed standard overhead costs based on a capacity of 180,000 machine hours as follows: During November, 85,000 units were scheduled for production, but only 80,000 units were actually produced. The following data relate to November: Actual machine hours used were 165,000. Actual overhead incurred totaled $1,378,000 ($518,000 variable plus $860,000 fixed). All inventories are carried at standard cost. Refer to National Toy Company. The fixed overhead volume variance for November was

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 fixed overhead spending variance?

The difference between actual variable overhead and budgeted variable overhead based upon actual hours is referred to as the variable overhead spending variance.