Exam 10: Standard Costs and Variances

The following data have been provided by Moretta Corporation, a company that produces forklift trucks: Supplies cost is an element of variable manufacturing overhead. The variable overhead efficiency variance for supplies cost is:

If skilled workers with high hourly rates of pay are given duties that require little skill and call for lower hourly rates of pay, this will result in a favorable labor rate variance.

The following data for November have been provided by Hunn Corporation, a producer of precision drills for oil exploration: Required: Compute the variable overhead rate variances for indirect labor and for power for November. Indicate whether each of the variances is favorable (F) or unfavorable (U). Show your work!

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 efficiency variance for the month is closest to:

Doogan Corporation makes a product with the following standard costs: The company produced 5,200 units in January using 39,310 grams of direct material and 2,380 direct labor-hours. During the month, the company purchased 44,400 grams of the direct material at $1.70 per gram. The actual direct labor rate was $19.30 per hour and the actual variable overhead rate was $6.80 per hour. 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 January is:

Ravena Labs., Inc. makes a single product which has the following standards: Direct materials: 2.5 ounces at $20 per ounce Direct labor: 1.4 hours at $12.50 per hour Variable manufacturing overhead: 1.4 hours at 3.50 per hour Variable manufacturing overhead is applied on the basis of standard direct labor-hours. The following data are available for October: $\bullet$ 3,750 units of compound were produced during the month. $\bullet$ There was no beginning direct materials inventory. $\bullet$ Direct materials purchased: 12,000 ounces for $225,000. $\bullet$ The ending direct materials inventory was 2,000 ounces. $\bullet$ Direct labor-hours worked: 5,600 hours at a cost of $67,200. $\bullet$ Variable manufacturing overhead costs incurred amounted to $18,200. $\bullet$ Variable manufacturing overhead applied to products: $18,375. The materials quantity variance for October is:

Fortes 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 April: Required: a. Compute the materials price variance for April. b. Compute the materials quantity variance for April. c. Compute the labor rate variance for April. d. Compute the labor efficiency variance for April. e. Compute the variable overhead rate variance for April. f. Compute the variable overhead efficiency variance for April.

The standard cost card for one unit of a finished product shows the following: If the total standard variable cost for one unit of finished product is $78, then the standard price per foot for direct materials is:

Motts Inc. has a standard cost system in which the standard direct labor for a particular product is 0.50 hours at the standard rate of $21.00 per hour. The company has reported the following actual results for the product for October: Required: a. Compute the labor rate variance for October. b. Compute the labor efficiency variance for October.

Majer Corporation makes a product with the following standard costs: The company reported the following results concerning this product in February. 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 February is:

Klacic Corporation makes a product with the following standard costs: The company reported the following results concerning this product in May. 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.

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 labor efficiency variance for the month is closest to:

Milar Corporation makes a product with the following standard costs: In January the company produced 2,000 units using 16,060 pounds of the direct material and 210 direct labor-hours. During the month, the company purchased 16,900 pounds of the direct material at a cost of $65,910. The actual direct labor cost was $4,473 and the actual variable overhead cost was $756. 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 January is:

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 labor efficiency variance for July is:

The following labor standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: What is the labor efficiency variance for the month?

Bressman 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 May: The variable overhead efficiency variance for the month is closest to:

Doogan Corporation makes a product with the following standard costs: The company produced 5,200 units in January using 39,310 grams of direct material and 2,380 direct labor-hours. During the month, the company purchased 44,400 grams of the direct material at $1.70 per gram. The actual direct labor rate was $19.30 per hour and the actual variable overhead rate was $6.80 per hour. 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 price variance for January is:

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 efficiency variance for the month?

A product's standard cost card specifies that a unit of the product requires 4 direct labor-hours. During September, 3,350 units were made, which was 150 units less than budgeted. The total budgeted direct labor cost for September was $117,600. The direct labor cost incurred during September was $111,850 and 13,450 direct labor-hours were worked. The labor rate variance for the month was:

A quantity standard indicates how much of an input should be used to make a unit of product or provide a unit of service.