Exam 11: Standard Costs and Variance Analysis

Glue For All has developed the following material standard to produce one container of Glue-It: 96 ounces of Chemical A at $0.15 per ounce.Glue For All planned to produce 2,000 containers of Glue-It during July.The company purchased 1,500 gallons (192,000 ounces) of Chemical A at a cost of $0.14 per ounce in July.The company used 1,480 gallons to produce 1,950 containers of Glue-It.How much is the material price variance?

Billy Bob Subs has the following standard cost to produce a king size party sub sandwich. Direct materials = 4 pounds @ $3.00 per pound = $12.00 per sub Direct labor = 1/2 hour @ $8.00 per hour = $4.00 per sub During December, the company produced 1,000 party subs, bought 4,300 pounds and used 4,100 pounds of meat at $3.20 per pound, and used 490 hours of labor at a total cost of $4,018.How much is the direct labor efficiency variance?

Last month, Investly Widgets purchased 16,400 pounds of material and used 16,600 pounds in the production of 4,200 widgets.The actual cost per pound of the material was $7.80 and the standard price was $7.75 per pound.The company budgeted 4,500 widgets for production.How much is the material quantity variance?

A variance analysis generally involves decomposing the difference between standard and actual costs into three components-direct materials, direct labor, and manufacturing overhead.

Standard Gears produces lawn mower gears.It uses units as the cost driver for overhead.The following information was provided concerning its standard cost system: Actual Data Budgeted and Stand ard Data Produced 12,400 units Budgeted units 12,500 units Materials purchased 4,650. for a total cost of \ 32,550 Budgeted materials 0.40.@\ 7.10 per . Materials used 4,700. Budgeted labor 36 minutes @\ 11.00 per hour Labor worked 7,460 hrs. costing \ 79,822 Budgeted variable overhead \ 35,625 Actual overhead Fixed: \ 84,800 Variable \ 36,100 Budgeted fixed overhead \ 85,500 What is the direct material quantity variance?

When Walston Corporation prepared its budget for 2017, it estimated fixed overhead of $540,000 ($45,000 per month) and variable overhead at $3.00 per unit produced.The company planned to produce 48,000 units during the year at a rate of 4,000 units each month.During April, the company produced 3,800 units and total overhead costs were $59,000.How much is the amount of overhead in the flexible budget for April's level of production?

Ideal standards are synonymous with favorable variances, while attainable standards are synonymous with unfavorable variances.

In a standard costing system, manufactured goods are recorded at the variable cost that should have been incurred to produce the items.

Sigorny Company uses standard costing and applies overhead on the basis of units produced.The company provided the following for July: Predetermined overhead rate per unit produced \ 6.20 Budgeted fixed overhead \ 12,600 Variable overhead budgeted per unit \ 2.00 Actual units produced 3,100 If the controllable overhead variance was $920 favorable in July, how much were total actual overhead costs?

Scotch Brand Products produces packaging tape and has determined the following to be its standard cost of producing one case of budget packaging tape: Material (3.50 ounces at \ 1.30 per ounce) \ 4.55 Labor (0.30 hour at \ 12.00 per hour) 3.60 Overhead 2.20 Total \ 10.35 At the start of 2017, Scotch Brand planned to produce 80,000 cases of tape during the year.Overhead is allocated based on the number of cases of tape produced.Annual fixed overhead is budgeted at $56,000 and variable overhead costs are budgeted at $1.50 per case.The following information summarizes the results for 2017: -Actual production, 75,000 cases -Purchased 275,000 ounces of material at a total cost of $343,750 -Used 266,250 ounces of material in production -Employees worked 22,000 hours, total labor cost $275,000 -Actual overhead incurred, $175,000 How much is the labor efficiency variance for 2017?

A favorable overhead volume variance is a signal that the actual quantity produced was greater than the quantity anticipated.

Which of the following values is used in the calculations for both the controllable overhead variance and the overhead volume variance?

Scotch Brand Products produces packaging tape and has determined the following to be its standard cost of producing one case of budget packaging tape: Material (3.50 ounces at \ 1.30 per ounce) \ 4.55 Labor (0.30 hour at \ 12.00 per hour) 3.60 Overhead 2.20 Total \ 10.35 At the start of 2017, Scotch Brand planned to produce 80,000 cases of tape during the year.Overhead is allocated based on the number of cases of tape produced.Annual fixed overhead is budgeted at $56,000 and the variable overhead costs are budgeted at $1.50 per case.The following information summarizes the results for 2017: -Actual production, 75,000 cases -Purchased 275,000 ounces of material at a total cost of $343,750 -Used 266,250 ounces of material in production -Employees worked 22,000 hours, total labor cost $275,000 -Actual overhead incurred, $175,000 How much is the controllable overhead variance for 2017?

A company developed a standard cost for overhead.Which of the following involves standard development procedures that are similar to developing overhead standard costs?

When Walston Corporation prepared its budget for 2017, it estimated fixed overhead of $540,000 ($45,000 per month) and variable overhead at $3.00 per unit produced.The company planned to produce 48,000 units during the year at a rate of 4,000 units each month.During April, the company produced 3,800 units and total overhead costs were $59,000.How much is the controllable overhead variance for April?

What are standard cost variances?

Blue Box Beach Chairs has the following standards to make beach chairs: Standard Quantity Standard Price Direct materials 2.2 pounds of polywood per chair \ 3.50 per pound Direct labor 0.65 hours per chair \ 13.00 per hour The static budget was based on the production of 6,200 beach chairs.The company used 13,000 pounds of polywood in order to make 6,000 chairs in April.The company purchased 7,000 pounds of polywood at a total cost of $24,150.It also used 3,840 labor hours at a cost of $12.70 per hour.How much is the direct labor efficiency variance?

Differences between standard and budgeted costs are referred to as standard cost variances.

What is the difference between the actual amount of overhead and the amount of overhead that would be included in a flexible budget called?

Sigorny Company uses standard costing and applies overhead on the basis of units produced.The company provided the following for July: Predetermined overhead rate per unit produced \ 6.20 Budgeted fixed overhead \ 12,600 Variable overhead budgeted per unit \ 2.00 Actual units produced 3,100 How much is the budgeted variable overhead in July?