Reference: 11-08 The following materials standards have been established for a particular product: \[\begin{array}{l} \begin{array} { | l | l | l | } \hline \text { Standard quantity per unit of output } & 1.9 & \text { grams } \\ \hline \text { Standard price } & \$ 18.00 & \text { per gram } \\ \hline \end{array}\\ \text { The following data pertain to operations concerning the product for the last month: }\\ \begin{array} { | l | l | l | } \hline \text { Actual materials purchased } & 5,800 & \text { grams } \\ \hline \text { Actual cost of materials purchased } & \$ 108,460 & \\ \hline \text { Actual materials used in production } & 5,200 & \text { grams } \\ \hline \text { Actual output } & 2,700 & \text { units } \\ \hline \end{array} \end{array}\] -The variable overhead spending variance is?

A) $220 F. B) $240 U. C) $240 F. D) $220 U. A) $220 F. B) $240 U. C) $240 F. D) $220 U.

Reference: 11-11 The Clark Company makes a single product and uses standard costing. Variable overhead is assigned to production on the basis of direct labour hours. Some data concerning this product for the month of May follow: \[\begin{array} { | l | l | l | } \hline \text { Labour rate variance: } & \$ 7,000 & \mathrm {~F} \\ \hline \text { Labour efficiency variance: } & \$ 12,000 & \mathrm {~F} \\ \hline \text { Variable overhead efficiency variance: } & \$ 4,000 & \mathrm {~F} \\ \hline \text { Number of units produced: } & 10,000 & \\ \hline \text { Standard labour rate per direct labour hour: } & \$ 12 & \\ \hline \text { Standard variable overhead rate per direct labour hour: } & \$ 4 & \\ \hline \text { Actual labour hours used: } & 14,000 & \\ \hline \text { Actual variable manufacturing overhead costs: } & \$ 58,290 & \\ \hline \end{array}\] -Which of the following statements is not true about the use of a standard cost system

A) Standards can be used by individuals to judge their own performance. B) A favourable variance will always be good thing for a business. C) The use of standard costs can greatly simplify bookkeeping. D) As long as costs do not fall significantly outside of standards managers can usually focus on other issues. A) Standards can be used by individuals to judge their own performance. B) A favourable variance will always be good thing for a business. C) The use of standard costs can greatly simplify bookkeeping. D) As long as costs do not fall significantly outside of standards managers can usually focus on other issues.

Reference: 11-01 Bryan Company employs a standard cost system in which direct materials inventory is carried at standard cost. Bryan has established the following standards for the prime costs of one unit of product: \[\begin{array} { | l | c | l | c | } \hline & \text { Standard Quantity } & \text { Standard Price } & \text { Standard Cost } \\ \hline \text { Direct materials } & 6.0 \text { grams } & \$ 3.50 / \text { gram } & \$ 21.00 \\ \hline \text { Direct labour } & 1.3 \text { hours } & \$ 11.00 / \text { hour } & 14.30 \\ \hline & & & \$ 35.30 \\ \hline \end{array}\] During March, Bryan purchased 165,000 grams of direct material at a total cost of $585,750. The total factory wages for March were $400,000, 90 percent of which were for direct labour. Bryan manufactured 25,000 units of product during March using 151,000 grams of direct material and 32,000 direct labour hours. -The direct material quantity variance for March is:

A) $3,550 unfavourable. B) $3,550 favourable. C) $3,500 favourable. D) $3,500 unfavourable. A) $3,550 unfavourable. B) $3,550 favourable. C) $3,500 favourable. D) $3,500 unfavourable.

Reference: 11-09 The following materials standards have been established for a particular product: \[\begin{array}{l} \begin{array} { | l | l | l | } \hline \text { Standard quantity per unit of output } & 6.8 & \text { metres } \\ \hline \text { Standard price } & \$ 17.10 & \text { per metre } \\ \hline \end{array}\\ \text { The following data pertain to operations concerning the product for the last month: }\\ \begin{array} { | l | l | l | } \hline \text { Actual materials purchased } & 9,000 & \text { metres } \\ \hline \text { Actual cost of materials purchased } & \$ 156,600 & \\ \hline \text { Actual materials used in production } & 8,500 & \text { metres } \\ \hline \text { Actual output } & 1,200 & \text { units } \\ \hline \end{array} \end{array}\] -The following materials standards have been established for a particular product: \[\begin{array}{l} \begin{array} { | l | l | } \hline \text { Standard quantity per unit of output } & 8.3 \text { grams } \\ \hline \text { Standard price } & \$ 19.15 \text { per gram } \\ \hline \end{array}\\ \text { The following data pertain to operations concerning the product for the last month: }\\ \begin{array} { | l | l | } \hline \text { Actual materials purchased } & 7,500 \text { grams } \\ \hline \text { Actual cost of materials purchased } & \$ 141,375 \\ \hline \text { Actual materials used in production } & 7,100 \text { grams } \\ \hline \text { Actual output } & 700 \text { units } \\ \hline \end{array} \end{array}\] What is the materials price variance for the month?

A) $7,540 U. B) $24,317 U. C) $7,660U. D) $2,250 F. A) $7,540 U. B) $24,317 U. C) $7,660U. D) $2,250 F.

Reference: 11-05 The Dexon Company makes and sells a single product called a Mip and employs a standard costing system. The following standards have been established for one unit of Mip: \[\begin{array} { | l | l | l | } \hline & \text { Standard Quantity of Hours } & \text { Standard Cost per Mip } \\ \hline \text { Direct materials } & 6 \text { board metres } & \$ 9.00 \\ \hline \text { Direct labour } & 0.8 \text { hours } & \$ 9.60 \\ \hline \end{array}\] There were no inventories of any kind on August 1. During August, the following events occurred: Purchased 15,000 board metres at the total cost of $24,000. Used 12,000 board feet to produce 2,100 Mips. Used 1,700 hours of direct labour time at a total cost of $20,060. -To record the purchase of direct materials, the general ledger would include what entry to the materials price variance account?

A) $1,500 credit. B) $1,500 debit. C) $6,000 debit. D) $6,000 credit. A) $1,500 credit. B) $1,500 debit. C) $6,000 debit. D) $6,000 credit.

Reference: 11-11 The Clark Company makes a single product and uses standard costing. Variable overhead is assigned to production on the basis of direct labour hours. Some data concerning this product for the month of May follow: \[\begin{array} { | l | l | l | } \hline \text { Labour rate variance: } & \$ 7,000 & \mathrm {~F} \\ \hline \text { Labour efficiency variance: } & \$ 12,000 & \mathrm {~F} \\ \hline \text { Variable overhead efficiency variance: } & \$ 4,000 & \mathrm {~F} \\ \hline \text { Number of units produced: } & 10,000 & \\ \hline \text { Standard labour rate per direct labour hour: } & \$ 12 & \\ \hline \text { Standard variable overhead rate per direct labour hour: } & \$ 4 & \\ \hline \text { Actual labour hours used: } & 14,000 & \\ \hline \text { Actual variable manufacturing overhead costs: } & \$ 58,290 & \\ \hline \end{array}\] -Which of the following is the most probable reason a company would experience an unfavourable labour rate variance and a favourable labour efficiency variance?

A) the mix of workers assigned to the particular job was heavily weighted towards the use of higher paid, experienced individuals. B) because of the production schedule, workers from other production areas were assigned to assist this particular process. C) defective materials caused more labour to be used in order to produce a standard unit. D) the mix of workers assigned to the particular job was heavily weighted towards the use of new relatively low paid, unskilled workers. A) the mix of workers assigned to the particular job was heavily weighted towards the use of higher paid, experienced individuals. B) because of the production schedule, workers from other production areas were assigned to assist this particular process. C) defective materials caused more labour to be used in order to produce a standard unit. D) the mix of workers assigned to the particular job was heavily weighted towards the use of new relatively low paid, unskilled workers.

Reference: 11-03 The Albright Company uses standard costing and has established the following standards for its single product: \[\begin{array} { | l | l | } \hline \text { Direct materials } & 2 \text { litres at } \$ 3 \text { per litre } \\ \hline \text { Direct labour } & 0.5 \text { hours at } \$ 8 \text { per hour } \\ \hline \text { Variable manuf. overhead } & 0.5 \text { hours at } \$ 2 \text { per hour } \\ \hline \begin{array} { l } \text { During November, the company made } 4,000 \text { units } \\ \text { and incurred the following costs: } \end{array} & \\ \hline \text { Direct materials purchased } & 8,100 \text { litres at } \$ 3.10 \\ \hline & \text { per litre } \\ \hline \text { Direct materials used } & 7,600 \text { litres } \\ \hline \text { Direct labour used } & 2,200 \text { hours at } \$ 8.25 \text { per hour } \\ \hline \text { Actual variable manuf. overhead } & \$ 4,175 \\ \hline \end{array}\] The company applies variable manufacturing overhead to products on the basis of direct labour hours. -To measure controllable production inefficiencies, which of the following is the bes? basis for a company to use in establishing the standard hours allowed for the output of one unit of product?

A) The hours per unit that would be required for the present workforce to satisfy expected demand over the long run. B) Average historical performance for the last several years. C) Engineering estimates based on attainable performance. D) Engineering estimates based on ideal performance. A) The hours per unit that would be required for the present workforce to satisfy expected demand over the long run. B) Average historical performance for the last several years. C) Engineering estimates based on attainable performance. D) Engineering estimates based on ideal performance.

Reference: 11-08 The following materials standards have been established for a particular product: \[\begin{array}{l} \begin{array} { | l | l | l | } \hline \text { Standard quantity per unit of output } & 1.9 & \text { grams } \\ \hline \text { Standard price } & \$ 18.00 & \text { per gram } \\ \hline \end{array}\\ \text { The following data pertain to operations concerning the product for the last month: }\\ \begin{array} { | l | l | l | } \hline \text { Actual materials purchased } & 5,800 & \text { grams } \\ \hline \text { Actual cost of materials purchased } & \$ 108,460 & \\ \hline \text { Actual materials used in production } & 5,200 & \text { grams } \\ \hline \text { Actual output } & 2,700 & \text { units } \\ \hline \end{array} \end{array}\] -Tower Company planned to produce 3,000 units of its single product, Titactium, during November. The standards for one unit of Titactium specify six grams of materials at $0.30 per gram. Actual production in November was 3,100 units of Titactium. There was a favourable materials price variance of $380 and an unfavourable materials quantity variance of $120. Based on these variances, one could conclude that:

A) the actual cost per gram for materials was less than the standard cost per gram. B) the actual usage of materials was less than the standard allowed. C) more materials were used than were purchased. D) more materials were purchased than were used. A) the actual cost per gram for materials was less than the standard cost per gram. B) the actual usage of materials was less than the standard allowed. C) more materials were used than were purchased. D) more materials were purchased than were used.

Reference: 11-02 The Litton Company has established standards as follows: Direct material 3 kg @ $4/kg = $12 per unit Direct labour 2 hrs. @ $8/hr. = $16 per unit Variable manuf. overhead 2 hrs. @ $5/hr. = $10 per unit Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased. $\begin{array} { | l | l | l | } \hline\quad\quad\quad&\quad\quad\quad&\quad\quad\\\hline\quad\quad\quad&\quad\quad\quad&\quad\quad\\\hline\quad\quad\quad&\quad\quad\quad&\quad\quad\\\hline\quad\quad\quad&\quad\quad\quad&\quad\quad\\\hline\quad\quad\quad&\quad\quad\quad&\quad\quad\\\hline\quad\quad\quad&\quad\quad\quad&\quad\quad\\ \hline \end{array}$ Units produced 600 Direct material used 2,000 kg Direct material purchased (3,000 kg) $11,400 Direct labour cost (1,100 hrs.) $ 9,240 Variable manuf. overhead cost incurred $ 5,720 The company applies variable manufacturing overhead to products on the basis of direct labour hours. -The labour efficiency variance is?

A) $840 F. B) $840 U. C) $800 U. D) $800 F. A) $840 F. B) $840 U. C) $800 U. D) $800 F.

Reference: 11-05 The Dexon Company makes and sells a single product called a Mip and employs a standard costing system. The following standards have been established for one unit of Mip: \[\begin{array} { | l | l | l | } \hline & \text { Standard Quantity of Hours } & \text { Standard Cost per Mip } \\ \hline \text { Direct materials } & 6 \text { board metres } & \$ 9.00 \\ \hline \text { Direct labour } & 0.8 \text { hours } & \$ 9.60 \\ \hline \end{array}\] There were no inventories of any kind on August 1. During August, the following events occurred: Purchased 15,000 board metres at the total cost of $24,000. Used 12,000 board feet to produce 2,100 Mips. Used 1,700 hours of direct labour time at a total cost of $20,060. -If the actual labour hours worked exceed the standard labour hours allowed, what type of variance will occur?

A) Unfavourable labour rate variance. B) Favourable labour rate variance. C) Unfavourable labour efficiency variance. D) Favourable labour efficiency variance. A) Unfavourable labour rate variance. B) Favourable labour rate variance. C) Unfavourable labour efficiency variance. D) Favourable labour efficiency variance.

Exam 11: Standard Costs and Variance Analysis

Reference: 11-11 The Clark Company makes a single product and uses standard costing. Variable overhead is assigned to production on the basis of direct labour hours. Some data concerning this product for the month of May follow: Labour rate variance: \ 7,000 Labour efficiency variance: \ 12,000 Variable overhead efficiency variance: \ 4,000 Number of units produced: 10,000 Standard labour rate per direct labour hour: \ 12 Standard variable overhead rate per direct labour hour: \ 4 Actual labour hours used: 14,000 Actual variable manufacturing overhead costs: \ 58,290 -The production manager is usually held responsible for the labour efficiency variance.

(True/False)

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Question 81

Reference: 11-08 The following materials standards have been established for a particular product: Standard quantity per unit of output 1.9 grams Standard price \ 18.00 per gram The following data pertain to operations concerning the product for the last month: Actual materials purchased 5,800 grams Actual cost of materials purchased \ 108,460 Actual materials used in production 5,200 grams Actual output 2,700 units -The variable overhead spending variance is?

(Multiple Choice)

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Question 82

Reference: 11-11 The Clark Company makes a single product and uses standard costing. Variable overhead is assigned to production on the basis of direct labour hours. Some data concerning this product for the month of May follow: Labour rate variance: \ 7,000 Labour efficiency variance: \ 12,000 Variable overhead efficiency variance: \ 4,000 Number of units produced: 10,000 Standard labour rate per direct labour hour: \ 12 Standard variable overhead rate per direct labour hour: \ 4 Actual labour hours used: 14,000 Actual variable manufacturing overhead costs: \ 58,290 -Which of the following statements is not true about the use of a standard cost system

(Multiple Choice)

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Question 83

Reference: 11-11 The Clark Company makes a single product and uses standard costing. Variable overhead is assigned to production on the basis of direct labour hours. Some data concerning this product for the month of May follow: Labour rate variance: \ 7,000 Labour efficiency variance: \ 12,000 Variable overhead efficiency variance: \ 4,000 Number of units produced: 10,000 Standard labour rate per direct labour hour: \ 12 Standard variable overhead rate per direct labour hour: \ 4 Actual labour hours used: 14,000 Actual variable manufacturing overhead costs: \ 58,290 -The static budget is a good tool for assessing whether variable costs are under control.

(True/False)

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Question 84

Reference: 11-11 The Clark Company makes a single product and uses standard costing. Variable overhead is assigned to production on the basis of direct labour hours. Some data concerning this product for the month of May follow: Labour rate variance: \ 7,000 Labour efficiency variance: \ 12,000 Variable overhead efficiency variance: \ 4,000 Number of units produced: 10,000 Standard labour rate per direct labour hour: \ 12 Standard variable overhead rate per direct labour hour: \ 4 Actual labour hours used: 14,000 Actual variable manufacturing overhead costs: \ 58,290 -One cause of an unfavourable overhead volume variance would be increases in cost for fixed overhead items.

(True/False)

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Question 85

Reference: 11-01 Bryan Company employs a standard cost system in which direct materials inventory is carried at standard cost. Bryan has established the following standards for the prime costs of one unit of product: Standard Quantity Standard Price Standard Cost Direct materials 6.0 grams \ 3.50/ gram \ 21.00 Direct labour 1.3 hours \ 11.00/ hour 14.30 \ 35.30 During March, Bryan purchased 165,000 grams of direct material at a total cost of $585,750. The total factory wages for March were $400,000, 90 percent of which were for direct labour. Bryan manufactured 25,000 units of product during March using 151,000 grams of direct material and 32,000 direct labour hours. -The direct material quantity variance for March is:

(Multiple Choice)

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Question 86

Reference: 11-04 Cole laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard costs for one bag of Fastgro as follows: Standard Quantity Standard Cost per Bag Direct material 20 grams \ 8.00 Direct labour 0.1 hours \ 1.10 Variable manuf. overhead 0.1 hours \ 0.40 The company had no beginning inventories of any kind on Jan. 1. Variable manufacturing overhead is applied to production on the basis of direct labour hours. During January, the following activity was recorded by the company: Production of Fastgro: 4,000 bags Direct materials purchased: 85,000 grams at a cost of $32,300 Direct labour worked: 390 hours at a cost of $4,875 Variable manufacturing overhead incurred: $1,475 Inventory of direct materials on Jan. 31: 3,000 grams -The total variance for variable overhead for January is:

(Multiple Choice)

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Question 87

Reference: 11-09 The following materials standards have been established for a particular product: Standard quantity per unit of output 6.8 metres Standard price \ 17.10 per metre The following data pertain to operations concerning the product for the last month: Actual materials purchased 9,000 metres Actual cost of materials purchased \ 156,600 Actual materials used in production 8,500 metres Actual output 1,200 units -The following materials standards have been established for a particular product: Standard quantity per unit of output 8.3 grams Standard price \ 19.15 per gram The following data pertain to operations concerning the product for the last month: Actual materials purchased 7,500 grams Actual cost of materials purchased \ 141,375 Actual materials used in production 7,100 grams Actual output 700 units What is the materials price variance for the month?

(Multiple Choice)

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Question 88

Reference: 11-05 The Dexon Company makes and sells a single product called a Mip and employs a standard costing system. The following standards have been established for one unit of Mip: Standard Quantity of Hours Standard Cost per Mip Direct materials 6 board metres \ 9.00 Direct labour 0.8 hours \ 9.60 There were no inventories of any kind on August 1. During August, the following events occurred: Purchased 15,000 board metres at the total cost of $24,000. Used 12,000 board feet to produce 2,100 Mips. Used 1,700 hours of direct labour time at a total cost of $20,060. -To record the purchase of direct materials, the general ledger would include what entry to the materials price variance account?

(Multiple Choice)

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Question 89

Reference: 11-11 The Clark Company makes a single product and uses standard costing. Variable overhead is assigned to production on the basis of direct labour hours. Some data concerning this product for the month of May follow: Labour rate variance: \ 7,000 Labour efficiency variance: \ 12,000 Variable overhead efficiency variance: \ 4,000 Number of units produced: 10,000 Standard labour rate per direct labour hour: \ 12 Standard variable overhead rate per direct labour hour: \ 4 Actual labour hours used: 14,000 Actual variable manufacturing overhead costs: \ 58,290 -Which of the following is the most probable reason a company would experience an unfavourable labour rate variance and a favourable labour efficiency variance?

(Multiple Choice)

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Question 90

Reference: 11-13 The Upton Company employs a standard costing system in which variable overhead is assigned to production on the basis of direct labour hours. Data for the month of February include the following: Variable manufacturing overhead cost incurred: $48,700 Total variable overhead variance: $300 F Standard hours allowed for actual production: 7,000 Actual direct labour hours worked: 6,840 -An unfavourable labour efficiency variance indicates that:

(Multiple Choice)

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Question 91

Reference: 11-04 Cole laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard costs for one bag of Fastgro as follows: Standard Quantity Standard Cost per Bag Direct material 20 grams \ 8.00 Direct labour 0.1 hours \ 1.10 Variable manuf. overhead 0.1 hours \ 0.40 The company had no beginning inventories of any kind on Jan. 1. Variable manufacturing overhead is applied to production on the basis of direct labour hours. During January, the following activity was recorded by the company: Production of Fastgro: 4,000 bags Direct materials purchased: 85,000 grams at a cost of $32,300 Direct labour worked: 390 hours at a cost of $4,875 Variable manufacturing overhead incurred: $1,475 Inventory of direct materials on Jan. 31: 3,000 grams -Patridge Company uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of direct labour-hours. The information below is taken from the company's flexible budget for manufacturing overhead: Percent of capacity 70\% 80\% 90\% Direct labour-hours 21,000 24,000 27,000 Variable overhead \ 42,000 \ 48,000 \ 54,000 Fixed overhead 108,000 108,000 108,000 Total overhead \ 150,000 \ 156,000 \ 162,000 During the year, the company operated at exactly 80% of capacity, but applied manufacturing overhead to products based on the 90% level. The company's fixed overhead volume variance for the year was:

(Multiple Choice)

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Question 92

Reference: 11-03 The Albright Company uses standard costing and has established the following standards for its single product: Direct materials 2 litres at \ 3 per litre Direct labour 0.5 hours at \ 8 per hour Variable manuf. overhead 0.5 hours at \ 2 per hour During November, the company made 4,000 units and incurred the following costs: Direct materials purchased 8,100 litres at \ 3.10 per litre Direct materials used 7,600 litres Direct labour used 2,200 hours at \ 8.25 per hour Actual variable manuf. overhead \ 4,175 The company applies variable manufacturing overhead to products on the basis of direct labour hours. -To measure controllable production inefficiencies, which of the following is the bes? basis for a company to use in establishing the standard hours allowed for the output of one unit of product?

(Multiple Choice)

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Question 93

Reference: 11-13 The Upton Company employs a standard costing system in which variable overhead is assigned to production on the basis of direct labour hours. Data for the month of February include the following: Variable manufacturing overhead cost incurred: $48,700 Total variable overhead variance: $300 F Standard hours allowed for actual production: 7,000 Actual direct labour hours worked: 6,840 -For the month of April, Thorp Co.'s records disclosed the following data relating to direct labour: Actual cost \ 10,000 Rate variance \ 1,000 favourable Efficiency variance \ 1,500 unfavourable For the month of April, actual direct labour hours amounted to 2,000. In April, Thorp's standard direct labour rate per hour was:

(Multiple Choice)

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Question 94

Reference: 11-08 The following materials standards have been established for a particular product: Standard quantity per unit of output 1.9 grams Standard price \ 18.00 per gram The following data pertain to operations concerning the product for the last month: Actual materials purchased 5,800 grams Actual cost of materials purchased \ 108,460 Actual materials used in production 5,200 grams Actual output 2,700 units -Tower Company planned to produce 3,000 units of its single product, Titactium, during November. The standards for one unit of Titactium specify six grams of materials at $0.30 per gram. Actual production in November was 3,100 units of Titactium. There was a favourable materials price variance of $380 and an unfavourable materials quantity variance of $120. Based on these variances, one could conclude that:

(Multiple Choice)

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Question 95

Reference: 11-04 Cole laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard costs for one bag of Fastgro as follows: Standard Quantity Standard Cost per Bag Direct material 20 grams \ 8.00 Direct labour 0.1 hours \ 1.10 Variable manuf. overhead 0.1 hours \ 0.40 The company had no beginning inventories of any kind on Jan. 1. Variable manufacturing overhead is applied to production on the basis of direct labour hours. During January, the following activity was recorded by the company: Production of Fastgro: 4,000 bags Direct materials purchased: 85,000 grams at a cost of $32,300 Direct labour worked: 390 hours at a cost of $4,875 Variable manufacturing overhead incurred: $1,475 Inventory of direct materials on Jan. 31: 3,000 grams -The Adlake Company makes and sells a single product and uses a standard cost system. During October, the company budgeted $300,000 in fixed manufacturing overhead cost at a denominator activity of 20,000 machine-hours. At standard, each unit of finished product requires 5 machine-hours. The following cost and activity were recorded during October: Total actual fixed manufacturing overhead cost incurred \ 294,000 Units of product completed 3,800 Actual machine-hours worked 19,422 The amount of fixed overhead cost that the company applied to work in process for October was:

(Multiple Choice)

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Question 96

Reference: 11-02 The Litton Company has established standards as follows: Direct material 3 kg @ $4/kg = $12 per unit Direct labour 2 hrs. @ $8/hr. = $16 per unit Variable manuf. overhead 2 hrs. @ $5/hr. = $10 per unit Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased. Units produced 600 Direct material used 2,000 kg Direct material purchased (3,000 kg) $11,400 Direct labour cost (1,100 hrs.) $ 9,240 Variable manuf. overhead cost incurred $ 5,720 The company applies variable manufacturing overhead to products on the basis of direct labour hours. -The labour efficiency variance is?

(Multiple Choice)

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Question 97

Reference: 11-11 The Clark Company makes a single product and uses standard costing. Variable overhead is assigned to production on the basis of direct labour hours. Some data concerning this product for the month of May follow: Labour rate variance: \ 7,000 Labour efficiency variance: \ 12,000 Variable overhead efficiency variance: \ 4,000 Number of units produced: 10,000 Standard labour rate per direct labour hour: \ 12 Standard variable overhead rate per direct labour hour: \ 4 Actual labour hours used: 14,000 Actual variable manufacturing overhead costs: \ 58,290 -A favourable labour efficiency variance would result in a credit balance in the labour efficiency variance account.

(True/False)

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Question 98

Reference: 11-05 The Dexon Company makes and sells a single product called a Mip and employs a standard costing system. The following standards have been established for one unit of Mip: Standard Quantity of Hours Standard Cost per Mip Direct materials 6 board metres \ 9.00 Direct labour 0.8 hours \ 9.60 There were no inventories of any kind on August 1. During August, the following events occurred: Purchased 15,000 board metres at the total cost of $24,000. Used 12,000 board feet to produce 2,100 Mips. Used 1,700 hours of direct labour time at a total cost of $20,060. -If the actual labour hours worked exceed the standard labour hours allowed, what type of variance will occur?

(Multiple Choice)

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Question 99

Reference: 11-02 The Litton Company has established standards as follows: Direct material 3 kg @ $4/kg = $12 per unit Direct labour 2 hrs. @ $8/hr. = $16 per unit Variable manuf. overhead 2 hrs. @ $5/hr. = $10 per unit Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased. Units produced 600 Direct material used 2,000 Direct material purchased (3,000) \ 11,400 Direct labour cost (1,100.) \ 9,240 Variable manuf. overhead cost incurred \ 5,720 The company applies variable manufacturing overhead to products on the basis of direct labour hours. -The following labour standards have been established for a particular product: Standard labour hours per unit of output 8.3 hours Standard labour rate \ 12.10 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 6,100 hours Actual total labour cost \ 71,370 Actual output 900 units What is the labour efficiency variance for the month?

(Multiple Choice)

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Question 100

An Introduction to Managerial Accounting

Cost Concepts

Systems Design: Job-Order Costing

Process Costing

Activity-Based Costing

Cost Behaviour: Analysis and Use

Budgeting

Cost-Volume-Profit Relationships

Relevant Costs: the Key to Decision Making

Capital Budgeting Decisions

Organizational Structure and Performance Measurement

How Well Am I Doing Financial Statement Analysis Online

How Well Am I Doing Cash Flow Statement Online

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