Exam 22: Standard Costs and Balanced Scorecard

In Zero Company's income statement, they report actual gross profit of $52,500 and the following variances: Materials price \ 420 Materials quantity 600 Labor price 420 Labor quantity 1,000 Overhead 900 Zero would report gross profit at standard of

In using variance reports, top management normally looks carefully at every variance.

Variance reports are

The per-unit standards for direct labor are 1.5 direct labor hours at $15 per hour. If in producing 2,400 units, the actual direct labor cost was $46,000 for 3,000 direct labor hours worked, the total direct labor variance is

Income statements prepared internally for management often show cost of goods sold at standard cost and variances are

Standard cost is the industry average cost for a particular item.

The standard unit cost is used in the calculation of which of the following variances?

Hofburg's standard quantities for 1 unit of product include 2 pounds of materials and 1.5 labor hours. The standard rates are $2 per pound and $7 per hour. The standard overhead rate is $8 per direct labor hour. The total standard cost of Hofburg's product is

Allowances should not be made in the direct labor quantity standard for

A standard differs from a budget because a standard

If a company is concerned with the potential negative effects of establishing standards, it should

The standard rate of pay is $12 per direct labor hour. If the actual direct labor payroll was $47,040 for 4,000 direct labor hours worked, the direct labor price (rate) variance is

Parnell Company prepared its income statement for internal use. How would amounts for cost of goods sold and variances appear?

Setting standard costs is relatively simple because it is done entirely by accountants.

Dillon has a standard of 1.5 pounds of materials per unit, at $6 per pound. In producing 2,000 units, Dillon used 3,100 pounds of materials at a total cost of $18,135. Dillon's total variance is

Standards may be useful in setting selling prices for finished goods.

Variance analysis facilitates the principle of "management by exception."

Atkins, Inc. produces a product requiring 8 pounds of material at $1.50 per pound. Atkins produced 10,000 units of this product during 2016 resulting in a $30,000 unfavorable materials quantity variance. How many pounds of direct material did Atkins use during 2016?

The materials price standard is based on the purchasing department's best estimate of the cost of raw materials.

A materials quantity variance is calculated as the difference between the standard direct materials price and the actual direct materials price multiplied by the actual quantity of direct materials used.