Exam 9: Standard Costing and Variances

The difference between the actual variable overhead rate and the standard variable overhead rate, multiplied by the actual amount of the cost driver, is the:

How do managers and companies set price and quantity standards?

Patton Corp. uses a standard cost system to account for the costs of its one products. Budgeted fixed overhead is $75,000, budgeted production is 2,500 per month, and practical capacity is 3,000 units. During November, Patton produced 2,400 units. Fixed overhead incurred totaled $70,310. Assume Patton calculates its fixed overhead rate based on budgeted production. a. What is the fixed overhead rate? b. What is the fixed overhead volume variance? c. By how much was fixed overhead over- or underapplied? Now assume Patton calculates its fixed overhead rate based on practical capacity. d. What is the fixed overhead rate? e. What is the expected (planned) capacity variance? f. What is the unexpected (unplanned) capacity variance? g. By how much was fixed overhead over- or under-applied?

A price standard is the price that should be paid per output unit for the input

At the end of the accounting period, all variances are closed to the _____________ account.

The production manager is typically responsible for the direct labor rate variance

Tucker Co. has budgeted fixed overhead of $225,000 based on budgeted production of 7,500 units. During February, 7,200 units were produced and $233,400 was spent on fixed overhead. What is the fixed overhead spending variance?

The difference between the actual quantity and the standard quantity, multiplied by the standard price is the:

Raven applies overhead based on direct labor hours. The variable overhead standard is 2 hours at $11 per hour. During July, Raven spent $116,700 for variable overhead. 8,890 labor hours were used to produce 4,700 units. What is the variable overhead rate variance?

The difference between the actual fixed manufacturing overhead cost and the budgeted fixed manufacturing overhead cost is the:

The difference between the actual price and the standard price, multiplied by the actual quantity of materials purchased is the:

In a standard cost system, the initial debit to an inventory account is based on:

A standard cost card shows what the company spent to produce each unit of product

Whitman has a direct labor standard of 2 hours per unit of output. Each employee has a standard wage rate of $22.50 per hour. During July, Whitman paid $94,750 to employees for 4,445 hours worked. 2,350 units were produced during July. What is the direct labor efficiency variance?

Warner Company has budgeted fixed overhead of $225,000 based on budgeted production of 7,500 units. During October, 7,200 units were produced and $236,400 was spent on fixed overhead. What is the fixed overhead spending variance?

Delaware Corp. prepared a master budget that included $21,360 for direct materials, $33,600 for direct labor, $18,000 for variable overhead, and $46,440 for fixed overhead. Delaware Corp. planned to sell 4,000 units during the period, but actually sold 4,300 units. What would Delaware's total costs be if it used a flexible budget for the period based on actual sales?

Raven applies overhead based on direct labor hours. The variable overhead standard is 2 hours at $11 per hour. During July, Raven spent $116,700 for variable overhead. 8,890 labor hours were used to produce 4,700 units. How much is variable overhead on the flexible budget?

The flexible budget can be used as a benchmark for evaluating performance after the fact, as part of the control process

A budget that is based on a single estimate of sales volume is called a:

Delaware Corp. prepared a master budget that included $21,360 for direct materials, $33,600 for direct labor, $18,000 for variable overhead, and $46,440 for fixed overhead. Delaware Corp. planned to sell 4,000 units during the period, but actually sold 4,300 units. What would Delaware's fixed overhead cost be if it used a flexible budget for the period based on actual sales?