Exam 7: Standard Costing and Variance Analysis

A firm producing one product has a budgeted overhead of $100,000, of which $20,000 is variable. The budgeted direct labor is 10,000 hours. Required: Fill in the blanks.

A total variance is best defined as the difference between total

If actual direct labor hours (DLHs) are less than standard direct labor hours allowed and overhead is applied on a DLH basis, a(n)

The efficiency variance computed on a three-variance approach is

Ideal standards generally yield unfavorable variances.

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 labor rate variance?

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

Ideal standards do not allow for normal operating delays or human limitations.

The total labor variance can be subdivided into all of the following except

The difference between the actual wages paid to employees and the standard wages for all hours worked is the labor rate variance.

The total variance can provide useful information about the source of cost differences.

The difference between total actual cost incurred and total standard cost applied is referred to as _________________________.

Discuss how establishing standards benefits the following management functions: performance evaluation and decision making.

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 sum of the material mix and material yield variances equals

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

Fleetwood Company Fleetwood Company uses a standard cost system for its production process and applies overhead based on direct labor hours. The following information is available for May when Fleetwood produced 4,500 units: Refer to Fleetwood Company. Using the four-variance approach, what is the volume variance?

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 four-variance approach, what is the variable overhead efficiency 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 quantity variance?

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