Exam 24: Standard Costs and Balanced Scorecard

A favorable variance

A standard differs from a budget because a standard

Which department is usually responsible for a labor price variance attributable to misallocation of workers?

Adam Corporation prepared the following variance report. Instructions Fill in the appropriate amounts or letters for the question marks in the report.

Information on Jayhawk's direct labor costs for the month of August is as follows: What was the standard rate for August?

Riggins, Inc. manufactures one product called tybos. The company uses a standard cost system and sells each tybo for $8. At the start of monthly production, Riggins estimated 9,500 tybos would be produced in March. Riggins has established the following material and labor standards to produce one tybo: During March 2016, the following activity was recorded by the company relating to the production of tybos: 1. The company produced 9,000 units during the month. 2. A total of 24,000 pounds of materials were purchased at a cost of $66,000. 3. A total of 24,000 pounds of materials were used in production. 4. 5,000 hours of labor were incurred during the month at a total wage cost of $55,000. Instructions Calculate the following variances for March for Riggins, Inc. (a) Materials price variance (b) Materials quantity variance (c) Labor price variance (d) Labor quantity variance

A company uses 8,400 pounds of materials and exceeds the standard by 300 pounds. The quantity variance is $1,800 unfavorable. What is the standard price?

The labor time requirements for standards may be determined by the

Variance reports are

Flagstaff, Inc. uses standard costing for its one product, baseball bats. The standards call for 3 board-feet of wood at $1.40 per board-foot, and 45 minutes of work at $12 per hour per bat. Total manufacturing overhead costs were estimated at $9,450, of which the variable portion was $0.50 per bat and the fixed portion was $1.00 per bat with an estimate of 6,300 bats to be produced. Flagstaff identifies price variances at the earliest possible point in time. During March, the company had the following results: Direct labor used = 4,800 hours at a cost of $56,400 Actual manufacturing overhead fixed costs = $6,000 Actual manufacturing overhead variable costs = $3,100 Bats produced = 6,000 Instructions Compute the following variances for March. 1. Labor quantity variance 2. Total labor variance 3. Overhead controllable variance 4. Overhead volume variance

If the materials price variance is $3,600 F and the materials quantity and labor variances are each $2,700 U, what is the total materials variance?

The materials price standard is based on the purchasing department's best estimate of the cost of raw materials.

Pane Corp. manufactures and sells a nutrition drink for children. It wants to develop a standard cost per gallon. The following are required for production of a 100 gallon batch: 1,960 ounces of lime Kool-Drink at $.12 per ounce 40 pounds of granulated sugar at $.60 per pound 63 kiwi fruit at $.50 each 100 protein tablets at $.90 each 4,000 ounces of water at $.003 per ounce Pane estimates that 2% of the lime Kool-Drink is wasted, 20% of the sugar is lost, and 10% of the kiwis cannot be used. Instructions Compute the standard cost of the ingredients for one gallon of the nutrition drink.

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

Income statements prepared internally for management often show cost of goods sold at standard cost and variances are

If actual costs are greater than standard costs, there is a(n)

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 labor hours per unit 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 quantity per unit is

The per-unit standards for direct materials are 2 pounds at $5 per pound. Last month, 11,200 pounds of direct materials that actually cost $53,000 were used to produce 6,000 units of product. The direct materials quantity variance for last month was

An advantage of standard costs is that they simplify costing of inventories and reduce clerical costs.