Exam 22: Evaluating Variances From Standard Costs

If the standard to produce a given amount of product is 600 direct labor hours at $15 and the actual is 600 hours at $17, the rate variance is $1,200 unfavorable.

Financial reporting systems that are guided by the principle of exceptions concept focus attention on variances from standard costs.

The direct labor time variance measures the efficiency of the direct labor force.

Tippi Company produces lamps that require 2.25 standard hours per unit at an hourly rate of $15.00 per hour. Production of 7,700 units required 17,550 hours at an hourly rate of $15.20 per hour.?What is the direct labor (a) rate variance, (b) time variance, and (c) total cost variance?

The principle of exceptions allows managers to focus on correcting variances between

An unfavorable fixed factory overhead volume variance may be due to a failure of supervisors to maintain an even flow of work.

The following data relate to direct labor costs for the current period:Standard costs7,500 hours at $11.70Actual costs6,000 hours at $12.00​What is the direct labor time variance?

The variable factory overhead controllable variance is

Since the controllable variance measures the efficiency of using variable overhead resources, if budgeted variable overhead exceeds actual results, the variance is favorable.

If the standard to produce a given amount of product is 600 direct labor hours at $15 and the actual is 500 hours at $17, the time variance is $1,700 unfavorable.

If employees are given bonuses for exceeding normal standards, the standards may be very effective in motivating employees.

Standards are designed to evaluate price and quantity variances separately.

The following data relate to direct labor costs for the current period:Standard costs9,000 hours at $5.50Actual costs8,500 hours at $5.75What is the direct labor rate variance?

The following information relates to manufacturing overhead for Chapman Company: ​Compute (a) the fixed factory overhead volume variance, (b) the variable factory overhead controllable variance, and (c) the total factory overhead cost variance.

Use this information to answer the questions that follow. ​ The following data relate to direct labor costs for February: ​ ​ -What is the direct labor rate variance?

The controllable variance measures

The standard costs and actual costs for direct labor in the manufacture of 2,500 units of product are as follows:​ The direct labor time variance is

The standard cost is how much a product should cost to manufacture.

If at the end of the fiscal year, the variances from standard are significant, the variances should be transferred to the

Match each of the following descriptions with the term (a-e) it describes. -Theoretical standard