Exam 18: Standard Costing and Variance Analysis 2: Further Aspects

Figure 18-4 Regis Ltd. uses two materials in the production of its product. The materials, X and Y, have the following standards: Material Standard Mix Standard Unit Price Standard Cost 3,500 units £1.00 per unit £3,500 1,500 units 3.00 per unit £4,500 Yield 4,000 units During April, the following actual production information was provided: Material Actual Mix 30,000 units 20,000 units Yield 36,000 units -Refer to Figure 18-4. What is the materials usage variance?

Figure 18-2 Allende Company has developed capacity standards. Information is as follows for a value-added activity: Activity capacity acquired 60 Activity capacity used 50 Actual activity usage 30 Standard fixed activity rate £2,000 -Refer to Figure 18-2. The unused capacity variance is

Davis Industries' activity-based performance report revealed that actual inspection costs totaled £225,000 at an actual activity level of 80 inspections. Further analysis of inspection costs revealed the following: Actual Cost Budgeted Cost Inspection costs: Fixed £90,000 £84,000 Variable 60,000 56,000 Fixed inspection costs consist of the salaries of four inspectors, paid £21,000 each. Each inspector is capable of efficiently conducting inspections of 50 batches. Variable inspection costs consist of materials used during the inspections. a.Calculate the following fixed activity budget variances for inspection:Total fixed activity varianceFixed spending varianceVolume varianceUnused capacity variance b.Calculate the following variable activity budget variances for inspection:Spending varianceEfficiency variance

Figure 18-4 Regis Ltd. uses two materials in the production of its product. The materials, X and Y, have the following standards: Material Standard Mix Standard Unit Price Standard Cost 3,500 units £1.00 per unit £3,500 1,500 units 3.00 per unit £4,500 Yield 4,000 units During April, the following actual production information was provided: Material Actual Mix 30,000 units 20,000 units Yield 36,000 units -Refer to Figure 18-4. What is the materials yield variance?

Figure 18-4 Regis Ltd. uses two materials in the production of its product. The materials, X and Y, have the following standards: Material Standard Mix Standard Unit Price Standard Cost 3,500 units £1.00 per unit £3,500 1,500 units 3.00 per unit £4,500 Yield 4,000 units During April, the following actual production information was provided: Material Actual Mix 30,000 units 20,000 units Yield 36,000 units -Refer to Figure 18-4. What is the materials mix variance?

Figure 18-3 Pippen Company's activity-based performance report revealed that actual inspection costs totaled £100,000 at an actual activity level of 50 inspections. Further analysis of inspection costs revealed the following: Actual Cost Budgeted Cost Inspection costs: Fixed £30,000 £28,500 Variable 20,000 17,500 Fixed inspection costs consist of the salaries of two inspectors, who are paid £14,250. Each inspector is capable of efficiently conducting inspections of 30 batches. Variable inspection costs consist of materials used during the inspections. -Refer to Figure 18-3. The volume variance is

Figure 18-1 Froelech Company has developed capacity standards. Information is as follows: Standard cost of the activity capacity acquired £150,000 Standard cost of the activity capacity used 100,000 Standard cost of the actual activity used 120,000 -Refer to Figure 18-1. The unused capacity variance is

Laune Co.'s standard cost is £200,000, and its allowable deviation is £20,000. Laune's upper and lower control limits are

Figure 18-3 Pippen Company's activity-based performance report revealed that actual inspection costs totaled £100,000 at an actual activity level of 50 inspections. Further analysis of inspection costs revealed the following: Actual Cost Budgeted Cost Inspection costs: Fixed £30,000 £28,500 Variable 20,000 17,500 Fixed inspection costs consist of the salaries of two inspectors, who are paid £14,250. Each inspector is capable of efficiently conducting inspections of 30 batches. Variable inspection costs consist of materials used during the inspections. -Refer to Figure 18-3. The fixed spending variance is

Figure 18-1 Froelech Company has developed capacity standards. Information is as follows: Standard cost of the activity capacity acquired £150,000 Standard cost of the activity capacity used 100,000 Standard cost of the actual activity used 120,000 -Refer to Figure 18-1. The volume variance is

Roberts Company uses a standard costing system. The following information pertains to direct materials for the month of July: Standard price per lb. £18.00 Actual purchase price per 1. £16.50 Quantity purchased 3,100. Quantity used 2,950 . Standard quantity allowed for actual output 3,000 . Actual output 1,000 units Roberts Company reports its material price variances at the time of purchase. What is the journal entry to record material purchases? a. Materials 55,800 Accounta Payable 55,800 b. Accesunts Payable 55,800 Materials 55,800 c. Materials 55,800 Materials price Variance 4,650 Accounta Payable 51,150 d. Materials 51,150 Materials price Variance 4,650 Accounta Payable 55,800

When should variances be investigated?