Exam 8: Standard Cost Accounting Materials, Labor, and Factory Overhead

Which of the following correctly demonstrates the comparison of the four-variance method of factory overhead analysis to the two-variance method of factory overhead analysis?

Information relating to direct labor for the Newstead Company follow: The entry to record the direct labor cost is:

The following information pertains to the Braun Company for March: Using the four-variance method of factory overhead variance analysis, what is the spending variance?

Thomas Company uses a standard cost system and recognizes the materials purchase price variance at the time materials are purchased. Information for raw materials for Product RBI for the month of October follows: What is the entry to record the purchase of materials?

Ben's Climbing Gear, Inc. has direct material costs as follows: What was Ben's standard quantity of material allowed?

Standard costing will produce the same income before extraordinary items as actual costing when standard cost variances are assigned to:

Factors to be considered in setting materials standards include all of the following except:

The following information pertains to Genie Company: What is the entry to record the direct labor cost and variances?

Bobby's Burger Place monitors its variances on an hourly basis. It is not uncommon for Bobby to send workers home early when which of the following variances indicates that he has over-scheduled the shift?

Elgin Company's budgeted fixed factory overhead costs are $50,000 per month plus a variable factory overhead rate of $4.00 per direct labor hour. The standard direct labor hours allowed for October production were 20,000. An analysis of the factory overhead indicates that in October Elgin had an unfavorable controllable variance of $1,500 and a favorable volume variance of $500. Elgin uses a two-variance analysis of overhead variances. The actual factory overhead incurred in October is:

Alyssa Corporation uses a standard cost system. Direct labor information for Product CER for the month of October is as follows: What are actual hours worked?

Information relating to direct labor for the Newstead Company follow: The labor rate variance is:

Factors to be considered in setting labor standards include all of the following except:

In a three-variance method of factory overhead analysis, the variance that measures the difference between the factory overhead applied and the actual hours worked multiplied by the standard rate is the:

The normal capacity of the Malloy Company is 20,000 direct labor hours and 10,000 units per month. A finished unit requires 15 pounds of materials at an estimated cost of $1.00 per pound. The estimated cost of labor is $12.00 per hour. It is estimated that overhead for a month will be $15,000. During the month of June, 19,000 direct labor hours were worked at an average rate of $11.50 an hour. The number of units produced was 9,000, using all 132,000 pounds of material that were purchased at a cost of $1.05 per pound. a.Prepare a standard cost summary showing the standard unit cost. b.Calculate the material and labor variances. c.Prepare entries in general journal form to charge materials and labor to work in process. Indicate whether the variances are favorable or unfavorable.