Exam 11: Standard Costs and Balanced Scorecard

The predetermined overhead rate for Zane Company is $5, comprised of a variable overhead rate of $3 and a fixed rate of $2. The amount of budgeted overhead costs at normal capacity of $150,000 was divided by normal capacity of 30,000 direct labor hours, to arrive at the predetermined overhead rate of $5. Actual overhead for June was $9,500 variable and $6,050 fixed, and standard hours allowed for the product produced in June was 3,000 hours. The total overhead variance is

Use the following information for questions Oxnard Industries produces a product that requires 2.6 pounds of materials per unit. The allowance for waste and spoilage per unit is .3 pounds and .1 pounds, respectively. The purchase price is $2 per pound, but a 2% discount is usually taken. Freight costs are $.10 per pound, and receiving and handling costs are $.07 per pound. The hourly wage rate is $12.00 per hour, but a raise which will average $.30 will go into effect soon. Payroll taxes are $1.20 per hour, and fringe benefits average $2.40 per hour. Standard production time is 1 hour per unit, and the allowance for rest periods and setup is .2 hours and .1 hours, respectively. -The standard direct materials price per pound is

Clark Company manufactures a product with a standard direct labor cost of two hours at $18.00 per hour. During July, 2,000 units were produced using 4,200 hours at $18.30 per hour. The labor quantity variance was

The standard direct materials quantity does not include allowances for

Variance analysis facilitates the principle of "management by exception."

The budgeted overhead costs for standard hours allowed and the overhead costs applied to the product are the same amount

The direct materials quantity standard would not be expressed in

In developing a standard cost for direct materials, a price factor and a quantity factor must be considered.

The use of an inexperienced worker instead of an experienced employee can result in a favorable labor price variance but probably an unfavorable quantity variance.

A direct labor price standard is frequently called the direct labor efficiency standard.

If a company is concerned with the potential negative effects of establishing standards, it should

A standard is a unit amount, whereas a budget is a total amount.

Normal standards should be rigorous but attainable.

Standard cost is the industry average cost for a particular item.

The purchasing agent of the Poplin, Inc. ordered materials of lower quality in an effort to economize on price. What variance will most likely result?

The standard rate of pay is $20 per direct labor hour. If the actual direct labor payroll was $117,600 for 6,000 direct labor hours worked, the direct labor price (rate) variance is

The materials price variance is normally caused by the production department.

Which of the following is true?

The overhead volume variance relates only to fixed overhead costs.

Use the following information for questions Budgeted overhead for Cinnabar Industries at normal capacity of 30,000 direct labor hours is $6 per hour variable and $4 per hour fixed. In May, $310,000 of overhead was incurred in working 31,500 hours when 32,000 standard hours were allowed. -The overhead volume variance is