Exam 17: Standard Costing and Variance Analysis 1

The following budgeted and actual contribution statement is for a component sold by Dark, Inc. for June of this year: Required: a. Compute the sales price variance, the net sales volume variance, and the operating cost variance for June. a. to reconcile the budgeted and actual contribution to corporate costs and profits. b. Use the calculations in part c. How would you evaluate the performance of Dark, Inc.'s manager?

During April, 80,000 units of product were produced. The standard quantity of material allowed per unit was two pounds at a standard cost of £5 per pound. If there was a favourable materials usage variance of £40,000 for April, the actual quantity of materials used must have been

Price variances focus on the difference between

Figure 17-4 Shannon Ltd.'s standard cost card contained the following information: Direct labour: 1.25 hours * £8.00 per hour = £10.00 Shannon planned to make 12,000 units. Shannon actually made 10,000 units using 13,000 hours. -Refer to Figure 17-4. If Shannon's actual labour cost was £136,500, Shannon's labour rate variance was

The volume variance provides information to management about

Figure 17-3 Tuvok Ltd. has developed the following standards for one of its products: -Refer to Figure 17-3. Tuvok's material price variance is

Figure 17-1 Max Company has developed the following standards for one of its products: Direct materials 15 pounds *£16 per pound Direct labour 4 hours*£24 per hour Variable overhead 4 hours * £14 per hour The following activities occurred during the month of October: Materials purchased 10,000 pounds costing £170,000 Materials used 7,200 pounds Units produced 500 units Direct labour 2,300 hours at £23.60 per hour Actual variable overhead £30,000 The company records materials price variances at the time of purchase. -Refer to Figure 17-1. Max's materials usage variance would be

Labour efficiency variances may be caused by

The following standard costs were developed for one of Commodore Company's products: STANDARD COST CARD PER UNIT The following information is available regarding the company's operations for the period: Units produced 15,000 Materials purchased 90,000 pounds at £3.60 per pound Materials used 80,000 pounds Direct labour 9,000 hours at £16.50 per hour Overhead incurred: Variable £220,000 Fixed £640,000 Budgeted fixed overhead for the period is £600,000, and expected capacity for the period is 20,000 direct labour hours. Required: a. Calculate the standard fixed overhead rate. b. Complete the standard cost card for the product.

A 5 per cent wage increase for all factory employees would affect which of the following variances?

Figure 17-5 Ebola Company has developed the following standards for one of its products: The following activities occurred during the month of October: The company records materials price variances at the time of purchase. -Refer to Figure 17-5. Ebola's variable overhead spending variance would be

During September, 40,000 units of product were produced. The standard quantity of material allowed per unit was four pounds at a standard cost of £6.00 per pound. If there was a favourable materials usage variance of £30,000 for April, the actual quantity of materials used must be

An unfavourable materials usage variance may be caused by

During December, 6,000 pounds of raw materials were purchased at a cost of £16 per pound. If there was an unfavourable materials price variance of £6,000 for December, the standard cost per pound must be

For better control of direct material prices, when should direct material price variance be recognized?

During October, 16,000 direct labour hours were worked at a standard cost of £6 per hour. If the labour rate variance for October was £4,000 unfavourable, the actual cost per labour hour must be

A favourable materials price variance may be caused by

The purchase of inferior direct materials at a lower price might affect which of the following variances?

Figure 17-8 The following information was extracted from the accounting records of Noelle Company: Budgeted fixed overhead for the period is £420,000, and the budgeted fixed overhead rate is based on an expected capacity of 30,000 direct labour hours. The following information is available regarding the company's operations for the period: -Refer to Figure 17-8. Noelle's standard fixed overhead rate is

Figure 17-5 Ebola Company has developed the following standards for one of its products: The following activities occurred during the month of October: The company records materials price variances at the time of purchase. -Refer to Figure 17-5. Ebola's materials usage variance would be