Exam 7: Standard Costing and Variance Analysis

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

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.

A purpose of standard costing is to

In a standard cost system, Work in Process Inventory is ordinarily debited with

A standard cost card is prepared after manufacturing standards have been developed for direct materials, direct labor, and factory overhead.

A standard cost card is prepared before developing manufacturing standards for direct materials, direct labor, and 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 two-variance approach, what is the controllable variance?

Standards that are attainable with reasonable effort are referred to as ___________________________________.

The difference between the actual wages paid to employees and the standard wages for all hours worked is the labor efficiency 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 variable overhead spending variance for November was

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

Reichs Company The following information is for Reichs Company's September production: (Round all answers to the nearest dollar.) Refer to Reichs Company. What is the labor efficiency variance?

The two components of total material/labor variance are ______________________________ and ___________________________________

Crichton Company The following information is for Crichton Company's July production: (Round all answers to the nearest dollar.) Refer to Crichton Company. What is the material price variance (calculated at point of purchase)?

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 three-variance approach, what is the volume variance?

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 variable overhead efficiency variance?

The following information is available from the Fitzgerald Company: Assuming that Fitzgerald uses a three-way analysis of overhead variances, what is the overhead spending variance?

The difference between budgeted variable overhead for actual hours and standard overhead is the variable overhead spending variance.

Which of the following statements regarding standard cost systems is true?

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 one-variance approach, what is the total variance?