Exam 10: Standard Costs and Variances

Descamps Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. The company has reported the following actual results for the product for July: The variable overhead rate variance for the month is closest to:

Wolery Inc. has provided the following data concerning one of the products in its standard cost system. The company has reported the following actual results for the product for April: The labor rate variance for the month is closest to:

Tharaldson Corporation makes a product with the following standard costs: The company reported the following results concerning this product in June. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead rate variance for June is:

An unfavorable materials quantity variance occurs when the actual quantity used in production is less than the standard quantity allowed for the actual output of the period.

Saxena Corporation makes a product that has the following direct labor standards: The company budgeted for production of 2,900 units in July, but actual production was 2,800 units. The company used 250 direct labor-hours to produce this output. The actual direct labor rate was $14.10 per hour. The labor efficiency variance for July is:

The following standards for variable manufacturing overhead have been established for a company that makes only one product: The following data pertain to operations for the last month: What is the variable overhead efficiency variance for the month?

Bulluck Corporation makes a product with the following standard costs: The company reported the following results concerning this product in July. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead efficiency variance for July is:

If the actual hourly rate is greater than the standard hourly rate, the labor rate variance is labeled unfavorable (U).

A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company bases its variable manufacturing overhead standards on direct labor-hours. The following data pertain to operations for the last month: What is the variable overhead rate variance for the month?

Doby Corporation makes a product with the following standard costs: In July the company produced 4,800 units using 13,450 ounces of the direct material and 970 direct labor-hours. During the month the company purchased 14,600 ounces of the direct material at a price of $7.20 per ounce. The actual direct labor rate was $16.20 per hour and the actual variable overhead rate was $5.40 per hour. The materials price variance is computed when materials are purchased. Variable overhead is applied on the basis of direct labor-hours. Required: a. Compute the materials quantity variance. b. Compute the materials price variance. c. Compute the labor efficiency variance. d. Compute the labor rate variance. e. Compute the variable overhead efficiency variance. f. Compute the variable overhead rate variance.

The standard labor rate per hour should not include any employment taxes.

Bulluck Corporation makes a product with the following standard costs: The company reported the following results concerning this product in July. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for July is:

Bumgardner Inc. has provided the following data concerning one of the products in its standard cost system. The company has reported the following actual results for the product for April: The direct materials purchases variance is computed when the materials are purchased. The raw materials quantity variance for the month is closest to:

Tharaldson Corporation makes a product with the following standard costs: The company reported the following results concerning this product in June. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The labor efficiency variance for June is:

Devoto Inc. has provided the following data concerning one of the products in its standard cost system. The company has reported the following actual results for the product for June: The raw materials price variance for the month is closest to:

The following standards for variable manufacturing overhead have been established for a company that makes only one product: The following data pertain to operations for the last month: What is the variable overhead rate variance for the month?

Dirickson Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. The company has reported the following actual results for the product for July: The variable overhead efficiency variance for the month is closest to:

Galeazzi Corporation makes a product with the following standard costs: In October the company produced 3,000 units using 8,380 pounds of the direct material and 2,610 direct labor-hours. During the month, the company purchased 9,500 pounds of the direct material at a total cost of $55,100. The actual direct labor cost for the month was $48,546 and the actual variable overhead cost was $16,965. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. Required: a. Compute the materials quantity variance. b. Compute the materials price variance. c. Compute the labor efficiency variance. d. Compute the labor rate variance. e. Compute the variable overhead efficiency variance. f. Compute the variable overhead rate variance.

Waste on the production line will result in an unfavorable materials price variance.

Grub Chemical Corporation has developed cost standards for the production of its new cologne, ChocO. The variable cost standards below relate to each 10 gallon batch of ChocO: Variable manufacturing overhead at Grub is applied based on direct labor-hours. The actual results for last month were as follows: What is ChocO's materials (milk chocolate) price variance?