Exam 9: Standard Costing: a Functional-Based Control Approach

As a general rule, an investigation of a variance should be undertaken only if the

Which of the following people is most likely responsible for an unfavorable variable overhead efficiency variance?

Both manufacturing and service firms may use standard costing systems.

Diaz Company has developed the following standards for one of its products: Direct materials 3.50 pounds \times\ 4 per pound Direct labor 1 hour \times\ 12 per hour Variable manufacturing overhead 1 hour \times\ 6 per hour $\text { The following activity occurred during the month of April: }$ Materials purchased 2,000 pounds costing \ 22,500 Materials used 1,600 pounds Units produced 250 units Direct labor 550 hours at \ 12.50 per hour Actual variable manufacturing overhead: \ 2,500 The company records materials price variances at the time of purchase. The total variable standard cost is:

Formidable Company collected the following information: Standard costs per unit: Variable overhead 4 machine hours @\ 6 per machine hour Fixed overhead 4 machine hours @\ 10 per machine hour Actual output 20,000 units Denominator (normal capacity) output 21,000 units Actual machine hours 79,000 machine hours Actual variable overhead cost \ 540,000 Actual fixed overhead cost \ 810,000 Using the two variance method, what is the volume variance?

Which of the following is NOT true about Kaizen Standards?

In computing efficiency variances, managers compute the standard quantity of materials used and the standard hours allowed.

During September, 40,000 units were produced. The standard quantity of material allowed per unit was 5 pounds at a standard cost of $2.50 per pound. If there was a favorable usage variance of $25,000 for September, the actual quantity of materials used must have been

Firecracker Company has developed the following standards for one of its products. Direct materials: 15 pounds \times\ 16 per pound Direct labor: 4 hours \times\ 24 per hour Variable manufacturing overhead: 4 hours \times\ 14 per hour $\text { The following activity occurred during the month of October: }$ Materials purchased: 10,000 pounds costing \ 170,000 Materials used: 7,200 pounds Units produced: 500 units Direct labor: 2,300 hours at \ 23.60/ hour Actual variable manufacturing overhead: \ 30,000 The company records materials price variances at the time of purchase. The direct materials price variance is

Croissant Company's standard fixed overhead cost is $6 per direct labor hour based on budgeted fixed costs of $600,000. The standard allows one direct labor hour per unit. During the current year, Crawford produced 110,000 units of product, (within the relevant range of activity) incurred $630,000 of fixed overhead costs, and recorded 212,000 actual hours of direct labor. What is Croissant's fixed overhead spending variance for the current year?

Standard costing

Fixed manufacturing overhead was budgeted at $105,000, and 25,000 direct labor hours were budgeted. If the fixed overhead volume variance was $4,000 unfavorable and the fixed overhead spending variance was $1,500 favorable, fixed manufacturing overhead applied must be

The document that shows the amount and cost of direct materials, direct labor, and overhead to make a unit of output is called the standard __________ .

Harrangue Company's standard variable overhead rate is $6 per direct labor hour, and each unit requires 2 standard direct labor hours. During March, Harry recorded 6,000 actual direct labor hours, $37,000 actual variable overhead costs, and 2,900 units of product manufactured. What is the total variable overhead variance for March for Harrangue?

The following information is provided about three materials utilized in the production of a product: Material Standard Mix Standard Unit Price Standard Cost 1,250 units \ 3.00 per unit \ 3,750 750 units 5.00 per unit \ 3,750 500 units 4.00 per unit \ 2,000 Yield 2,250 units During May, the following actual production in formati on was provided: 10,000 units Y 5,000 units Z 2,500 units Yield 15,000 units What is the Material yield variance.

Croissant Company's standard fixed overhead cost is $6 per direct labor hour based on budgeted fixed costs of $600,000. The standard allows 1 direct labor hour per unit. During the current year, Croissant produced 110,000 units of product, incurred $630,000 of fixed overhead costs, and recorded 212,000 actual hours of direct labor. What is the standard activity level on which Croissant based its fixed overhead rate?

Mozambique Industries uses two different types of labor to manufacture its product. The types of labor, Cutting and Setup, have the following standards: Labor Type Standard Mix Standard Unit Price Standard Cost Cutting 200 hours \ 12.00 per unit \ 2,400 Setup 800 hours 8.00 per unit \ 6,400 Yiel d 4,000 units During September, the following actual production in formation was provided: Labor Type Actual Mix Cutting 7,000 hours Setup 3,000 hours Yiel d 42,000 units Required: Calculate the labor mix and yield variances.

Price standards specify amounts and quantity standards specify prices.

Production of a product utilizes materials D, E, and F. The following are their standards: Material Standard Mix Standard Unit Price Standard Cost D 6,000 units \ 1.00 per unit \ 6,000 E 4,000 units 2.00 per unit \ 8,000 F 2,000 units 1.50 per unit \ 3,000 Yield 8,000 units During August, the following actual production in formation was provided: Material Actual Mix D 37,000 units E 17,000 units F 7,000 units Yield 50,000 units Required: Calculate the materials mix, yield, and usage variances.

In setting price standards, the purchasing manager must consider