Cuevas Company produces magic swords. It uses units as the cost driver for overhead. The following information was provided concerning its standard cost system for 2014: $\begin{array}{l}\text { Standard/Budgeted Data }&\text { Actual Data }\\ \begin{array}{|l|l|} \hline \text { Material } & 1 / 21 \mathrm{~b} . @ \$ 15.00 \text { per } \mathrm{lb} . \\ \hline \text { Labor } & 1.2 \mathrm{hrs} @ \$ 12 \text { per hr. } \\ \hline \text { Fixed overhead } & \$ 62,000 \\ \hline \text { Variable overhead } & \$ 11 \text { per unit } \\ \hline \text { Production } & 2,000 \text { units }\\\hline \end{array} &\begin{array}{|l|l|} \hline \text { Produced } & 2,100 \text { units } \\ \hline \text { Materials purchased } & 1,050 \mathrm{lbs} . \text { for } \$ 14,700 \\ \hline \text { Materials used } & 1,080 \mathrm{lbs} . \\ \hline \text { Labor worked } & 2,500 \mathrm{hrs} \text {. costing } \$ 29,375 \\ \hline \text { Overhead } & \$ 82,000\\\hline \end{array} \end{array}$ How much is the standard cost per unit?

A) $21.90 B) $63.90 C) $69.00 D) $62.42 A) $21.90 B) $63.90 C) $69.00 D) $62.42

Barnes Company produces men's ties. The following budgeted amounts were provided by management for the current year: \[\begin{array} { | l | c | c | } \hline \text { Category } & \text { Standard Inputs } & \text { Standard Cost } \\ \hline \text { Direct materials } & 1.1 \text { yards per tee } & \text { \$4.00 per yard } \\ \hline \text { Direct labor } & 0.32 \text { hours per tie } & \text { \$9.00 per hour } \\ \hline \end{array}\] Barnes produced and sold 4,000 ties during 2014. Actual performance for the year is: \[\begin{array} { | l | l | l | r | } \hline { \text { Direct Materials } } && { \text { Direct Labor } } \\ \hline \text { Yards used in production } & 4,100 & \text { Labor hours incurred } & 1,240 \\ \hline \text { Yards purchased } & 3,900 & \text { Actual cost per hour } & \$ 9.25 \\ \hline \text { Actual cost per yard } & \mathbf { \$ 3 . 7 5 } & & \\ \hline \end{array}\] How much is the labor efficiency variance?

A) $310 unfavorable B) $360 favorable C) $50 favorable D) $1,000 unfavorable A) $310 unfavorable B) $360 favorable C) $50 favorable D) $1,000 unfavorable

Harris Manufacturing produces white sauce. It uses units as the cost driver for overhead. The following information was provided concerning its standard cost system for 2014: $\begin{array}{ll}\text { Budgeted and Standard Data }&\text { Actual Data }\\ \begin{array}{|l|l|} \hline \text { Material } & 1 / 41 \mathrm{~b} . @ \$ 14 \text { per pound } \\ \hline \text { Labor } & 1.4 \mathrm{hrs} @ \$ 16 \text { per hour } \\ \hline \text { Total fixed overhead } & \$ 84,000 \\ \hline \text { Variable overhead } & \$ 6.50 \text { per unit } \\ \hline \text { Production } & 6,000 \text { units }\\\hline \end{array}&\begin{array}{|l|l|} \hline \text { Produced } & 6,200 \text { units } \\ \hline \text { Materials purchased } & 1,600 \mathrm{lbs} . \text { for } \$ 13.70 / \text { pound } \\ \hline \text { Materials used } & 1,520 \mathrm{lbs} . \\ \hline \text { Labor worked } & 8,740 \mathrm{hrs} . \text { at } \$ 15.90 / \text { hour } \\ \hline \text { Total overhead } & \$ 122,000\\\hline \end{array} \end{array}$ How much is the standard cost of white sauce?

A) $50.50 B) $25.90 C) $45.95 D) $46.40 A) $50.50 B) $25.90 C) $45.95 D) $46.40

Haley Fans manufactures and distributes circulators. The standard and actual costs for the manufacture of circulators follows: \[\begin{array} { | l | l | } \hline { \text { Standard Costs } } & \text { Actual Costs } \\ \hline \text { Variable cost, \$24 per unit } & \text { Total variable cost, } \$ 12,300 \\ \hline \text { Fixed cost } \$ 40 \text { per unit } & \text { Total fixed cosh } \$ 19,250 \\ \hline \end{array}\] Budgeted factory overhead was $32,000. Overhead applied is based on the number of circulator units produced. The company estimated that 500 circulators would be produced, however only 480 were produced. How much is budgeted fixed overhead for the year?

A) $30,720 B) $19,200 C) $20,000 D) $12,000 A) $30,720 B) $19,200 C) $20,000 D) $12,000

Blue Box Beach Chairs has the following standards to make beach chairs: $\begin{array}{lcc}&\text { Standard Ouantity }&\text { Standard Price }\\\hline \text { Direct materials } & 2.2 \text { pounds of polywood per chair } & \$ 3.50 \text { per pound } \\ \text { Direct labor } & 0.65 \text { hours per chair } & \$ 13.00 \text { per hour } \end{array}$ The static budget was based on the production of 6,200 beach chairs. The company used 13,000 pounds of polywood in order to make 6,000 chairs in April. The company purchased 7,000 pounds of polywood at a total cost of $24,150. How much is the direct materials price variance?

A) $700 favorable B) $2,240 favorable C) $350 favorable D) $1,050 favorable A) $700 favorable B) $2,240 favorable C) $350 favorable D) $1,050 favorable

Haley Fans manufactures and distributes circulators. The standard and actual costs for the manufacture of circulators follows: \[\begin{array} { | l | l | } \hline { \text { Standard Costs } } & \text { Actual Costs } \\ \hline \text { Variable cost, \$24 per unit } & \text { Total variable cost, } \$ 12,300 \\ \hline \text { Fixed cost } \$ 40 \text { per unit } & \text { Total fixed cosh } \$ 19,250 \\ \hline \end{array}\] Budgeted factory overhead was $32,000. Overhead applied is based on the number of circulator units produced. The company estimated that 500 circulators would be produced, however only 480 were produced. How much is Haley's controllable overhead variance?

A) $800 unfavorable B) $830 favorable C) $450 favorable D) $30 unfavorable A) $800 unfavorable B) $830 favorable C) $450 favorable D) $30 unfavorable

Harris Manufacturing produces white sauce. It uses units as the cost driver for overhead. The following information was provided concerning its standard cost system for 2014: $\begin{array}{ll}\text { Budgeted and Standard Data }&\text { Actual Data }\\ \begin{array}{|l|l|} \hline \text { Material } & 1 / 41 \mathrm{~b} . @ \$ 14 \text { per pound } \\ \hline \text { Labor } & 1.4 \mathrm{hrs} @ \$ 16 \text { per hour } \\ \hline \text { Total fixed overhead } & \$ 84,000 \\ \hline \text { Variable overhead } & \$ 6.50 \text { per unit } \\ \hline \text { Production } & 6,000 \text { units }\\\hline \end{array}&\begin{array}{|l|l|} \hline \text { Produced } & 6,200 \text { units } \\ \hline \text { Materials purchased } & 1,600 \mathrm{lbs} . \text { for } \$ 13.70 / \text { pound } \\ \hline \text { Materials used } & 1,520 \mathrm{lbs} . \\ \hline \text { Labor worked } & 8,740 \mathrm{hrs} . \text { at } \$ 15.90 / \text { hour } \\ \hline \text { Total overhead } & \$ 122,000\\\hline \end{array} \end{array}$ How much is the direct labor rate variance for 2014?

A) $874 favorable B) $86 unfavorable C) $960 unfavorable D) $5,440 unfavorable A) $874 favorable B) $86 unfavorable C) $960 unfavorable D) $5,440 unfavorable

Standard Gears produces lawn mower gears. It uses units as the cost driver for overhead. The following information was provided concerning its standard cost system: $\begin{array}{ll}\text { Actual Data }&\text { Budgeted and Standard Data }\\ \begin{array}{|l|c|} \hline \text { Produced } & 12,400 \text { units } \\ \hline \text { Materials purchased } & 4,650 \text { lbs. for a total cost of } \$ 32,550 \\ \hline \text { Materials used } & 4,700 \text { lbs. } \\ \hline \text { Labor worked } & 7,460 \mathrm{hrs} \text {. costing } \$ 79,822 \\\hline \text { Actual overhead } & \text { Fixed: } \$ 84,800 \\ &\text { Variable } \$ 36,100\\ \hline \end{array}&\begin{array}{|l|c|} \hline \text { Budgeted units } & 12,500 \text { units } \\ \hline \text { Budgeted materials } & 0.401 \mathrm{1b} @ \$ 7.10 \text { per } 1 \mathrm{~b} . \\ \hline \text { Budgeted labor } & 36 \text { minutes @ } \$ 11.00 \text { per hour } \\ \hline \text { Budgeted variable overhead } & \$ 35,625 \\ \hline \text { Budgeted fixed overhead } & \$ 85,500\\\\\hline \end{array} \end{array}$ How much is the standard cost of each lawn mower gear?

A) $25.59 B) $19.13 C) $9.44 D) $19.28 A) $25.59 B) $19.13 C) $9.44 D) $19.28

Harris Manufacturing produces white sauce. It uses units as the cost driver for overhead. The following information was provided concerning its standard cost system for 2014: $\begin{array}{ll}\text { Budgeted and Standard Data }&\text { Actual Data }\\ \begin{array}{|l|l|} \hline \text { Material } & 1 / 41 \mathrm{~b} . @ \$ 14 \text { per pound } \\ \hline \text { Labor } & 1.4 \mathrm{hrs} @ \$ 16 \text { per hour } \\ \hline \text { Total fixed overhead } & \$ 84,000 \\ \hline \text { Variable overhead } & \$ 6.50 \text { per unit } \\ \hline \text { Production } & 6,000 \text { units }\\\hline \end{array}&\begin{array}{|l|l|} \hline \text { Produced } & 6,200 \text { units } \\ \hline \text { Materials purchased } & 1,600 \mathrm{lbs} . \text { for } \$ 13.70 / \text { pound } \\ \hline \text { Materials used } & 1,520 \mathrm{lbs} . \\ \hline \text { Labor worked } & 8,740 \mathrm{hrs} . \text { at } \$ 15.90 / \text { hour } \\ \hline \text { Total overhead } & \$ 122,000\\\hline \end{array} \end{array}$ How much the direct material quantity variance for 2014?

A) $456 favorable B) $480 favorable C) $900 favorable D) $420 favorable A) $456 favorable B) $480 favorable C) $900 favorable D) $420 favorable

Exam 11: Standard Costs and Variance Analysis

Cuevas Company produces magic swords. It uses units as the cost driver for overhead. The following information was provided concerning its standard cost system for 2014: Standard/Budgeted Data Actual Data Material 1/21.@\ 15.00 per . Labor 1.2@\ 12 per hr. Fixed overhead \ 62,000 Variable overhead \ 11 per unit Production 2,000 units Produced 2,100 units Materials purchased 1,050. for \ 14,700 Materials used 1,080. Labor worked 2,500 . costing \ 29,375 Overhead \ 82,000 How much is the standard cost per unit?

(Multiple Choice)

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Question 41

Barnes Company produces men's ties. The following budgeted amounts were provided by management for the current year: Category Standard Inputs Standard Cost Direct materials 1.1 yards per tee \4 .00 per yard Direct labor 0.32 hours per tie \9 .00 per hour Barnes produced and sold 4,000 ties during 2014. Actual performance for the year is: Direct Materials Direct Labor Yards used in production 4,100 Labor hours incurred 1,240 Yards purchased 3,900 Actual cost per hour \ 9.25 Actual cost per yard How much is the labor efficiency variance?

(Multiple Choice)

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Question 42

Harris Manufacturing produces white sauce. It uses units as the cost driver for overhead. The following information was provided concerning its standard cost system for 2014: Budgeted and Standard Data Actual Data Material 1/41.@\ 14 per pound Labor 1.4@\ 16 per hour Total fixed overhead \ 84,000 Variable overhead \ 6.50 per unit Production 6,000 units Produced 6,200 units Materials purchased 1,600. for \ 13.70/ pound Materials used 1,520. Labor worked 8,740. at \ 15.90/ hour Total overhead \ 122,000 How much is the standard cost of white sauce?

(Multiple Choice)

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Question 43

Which statement is true concerning insignificant favorable variance accounts in a standard costing system?

(Multiple Choice)

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Question 44

Which of the following is a method of determining the standard quantity of direct labor?

(Multiple Choice)

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Question 45

For which one of the following are standard production costs not developed?

(Multiple Choice)

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Question 46

Haley Fans manufactures and distributes circulators. The standard and actual costs for the manufacture of circulators follows: Standard Costs Actual Costs Variable cost, \2 4 per unit Total variable cost, \ 12,300 Fixed cost \ 40 per unit Total fixed cosh \ 19,250 Budgeted factory overhead was $32,000. Overhead applied is based on the number of circulator units produced. The company estimated that 500 circulators would be produced, however only 480 were produced. How much is budgeted fixed overhead for the year?

(Multiple Choice)

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Question 47

If actual demand is greater than anticipated, an overall favorable variance will exist for each of the three production costs.

(True/False)

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Question 48

Electric Zero produces relay units for generators. Each relay has a standard cost of $67. Standards call for two relays per generator. In July, the company purchased 120 relays for $7,560. The company used 104 relays in the production of 50 generators, with four relays damaged in the installation process. The standard quantity of labor is 20 hours per generator, with a standard wage rate of $23. In July, the company incurred 1,020 labor hours at a cost of $22,950. How much is the labor rate variance?

(Multiple Choice)

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Question 49

Blue Box Beach Chairs has the following standards to make beach chairs: Standard Ouantity Standard Price Direct materials 2.2 pounds of polywood per chair \ 3.50 per pound Direct labor 0.65 hours per chair \ 13.00 per hour The static budget was based on the production of 6,200 beach chairs. The company used 13,000 pounds of polywood in order to make 6,000 chairs in April. The company purchased 7,000 pounds of polywood at a total cost of $24,150. How much is the direct materials price variance?

(Multiple Choice)

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Question 50

A purchasing manager might be tempted to buy inferior materials because it will create favorable material quantity variance.

(True/False)

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Question 51

Haley Fans manufactures and distributes circulators. The standard and actual costs for the manufacture of circulators follows: Standard Costs Actual Costs Variable cost, \2 4 per unit Total variable cost, \ 12,300 Fixed cost \ 40 per unit Total fixed cosh \ 19,250 Budgeted factory overhead was $32,000. Overhead applied is based on the number of circulator units produced. The company estimated that 500 circulators would be produced, however only 480 were produced. How much is Haley's controllable overhead variance?

(Multiple Choice)

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Question 52

Harris Manufacturing produces white sauce. It uses units as the cost driver for overhead. The following information was provided concerning its standard cost system for 2014: Budgeted and Standard Data Actual Data Material 1/41.@\ 14 per pound Labor 1.4@\ 16 per hour Total fixed overhead \ 84,000 Variable overhead \ 6.50 per unit Production 6,000 units Produced 6,200 units Materials purchased 1,600. for \ 13.70/ pound Materials used 1,520. Labor worked 8,740. at \ 15.90/ hour Total overhead \ 122,000 How much is the direct labor rate variance for 2014?

(Multiple Choice)

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Question 53

Standard Gears produces lawn mower gears. It uses units as the cost driver for overhead. The following information was provided concerning its standard cost system: Actual Data Budgeted and Standard Data Produced 12,400 units Materials purchased 4,650 lbs. for a total cost of \ 32,550 Materials used 4,700 lbs. Labor worked 7,460 . costing \ 79,822 Actual overhead Fixed: \ 84,800 Variable \ 36,100 Budgeted units 12,500 units Budgeted materials 0.401@\ 7.10 per 1. Budgeted labor 36 minutes @ \ 11.00 per hour Budgeted variable overhead \ 35,625 Budgeted fixed overhead \ 85,500 How much is the standard cost of each lawn mower gear?

(Multiple Choice)

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Question 54

Harris Manufacturing produces white sauce. It uses units as the cost driver for overhead. The following information was provided concerning its standard cost system for 2014: Budgeted and Standard Data Actual Data Material 1/41.@\ 14 per pound Labor 1.4@\ 16 per hour Total fixed overhead \ 84,000 Variable overhead \ 6.50 per unit Production 6,000 units Produced 6,200 units Materials purchased 1,600. for \ 13.70/ pound Materials used 1,520. Labor worked 8,740. at \ 15.90/ hour Total overhead \ 122,000 How much the direct material quantity variance for 2014?

(Multiple Choice)

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Question 55

Capital Leather Company produces leather footballs. The standard cost for each football is: $\begin{array}{ll}\text { Direct material}&\text { 2 feet of leather at \$ 4.00 \mathrm{per} foot }\\\text { Direct labor }&\text { $ \quad 1.5 $ hours at $ \$ 12.00 $ per hour}\\\end{array}$ During February, 1,200 footballs were produced and 2,600 feet of leather were purchased at $4.25 per foot. Production usage was 2,300 feet. Direct labor cost incurred was $20,930 for 1,820 hours. How much is the direct labor rate variance?

(Multiple Choice)

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Question 56

Which one of the following is often used to determine a standard price for materials?

(Multiple Choice)

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Question 57

For planning purposes, ideal standards are more useful than attainable standards.

(True/False)

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Question 58

Eli uses a standard costing system. At the end of the fiscal year, only the following variance accounts had balances: Material Price Variance $\quad\quad\quad \$ 260$ (debit) Material Quantity Variance $\quad\quad \$ 35$ (credit) Labor Efficiency Variance $\quad\quad \$ 65$ (credit) Assuming these amounts are not considered significant, which one of the following will be part of the journal entry to close these accounts?

(Multiple Choice)

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Question 59

Glue For All has developed the following material standard to produce one container of Glue-It: 96 ounces of Chemical A at $0.15 per ounce. Glue For All planned to produce 2,000 containers of Glue-It during July. The company purchased 1,500 gallons (192,000 ounces) of Chemical A at a cost of $0.14 per ounce in July. The company used 1,480 gallons to produce 1,950 containers of Glue-It. How much is the material price variance?

(Multiple Choice)

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Question 60

Which statement is true concerning insignificant favorable variance accounts in a standard costing system?

Which of the following is a method of determining the standard quantity of direct labor?

For which one of the following are standard production costs not developed?

If actual demand is greater than anticipated, an overall favorable variance will exist for each of the three production costs.

A purchasing manager might be tempted to buy inferior materials because it will create favorable material quantity variance.

Which one of the following is often used to determine a standard price for materials?

For planning purposes, ideal standards are more useful than attainable standards.

Managerial Accounting in the Information Age

Job-Order Costing for Manufacturing and Service Companies

Process Costing

Cost-Volume-Profit Analysis

Variable Costing

Cost Allocation and Activity-Based Costing

The Use of Cost Information in Management Decision Making

Pricing Decisions

Capital Budgeting Decisions

Budgetary Planning and Control

Decentralization and Performance Evaluation

Statement of Cash Flows

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