Exam 24: Standard Costs and Balanced Scorecard

Denmark Corporation's variance report for the purchasing department reports 1,000 units of material A purchased and 2,400 units of material B purchased. It also reports standard prices of $2 for Material A and $3 for Material B. Actual prices reported are $2.10 for Material A and $2.80 for Material B. Denmark should report a total price variance of

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

Engines Done Right Co. is trying to establish the standard labor cost of a typical engine tune-up. The following data have been collected from time and motion studies conducted over the past month. Instructions (a) Determine the standard direct labor hours per tune-up (b) Determine the standard direct labor hourly rate. (c) Determine the standard direct labor cost per tune-up. (d) If a tune-up took 1.5 hours at the standard hourly rate, what was the direct labor quantity variance?

Dart Company developed the following standard costs for its product for 2016: The company expected to work at the 120,000 direct labor hours level of activity and produce 60,000 units of product. Actual results for 2016 were as follows: $\bullet$ 56,800 units of product were actually produced. $\bullet$ Direct labor costs were $1,092,000 for 112,000 direct labor hours actually worked. $\bullet$ Actual direct materials purchased and used during the year cost $1,108,800 for 231,000 pounds. $\bullet$ Total actual manufacturing overhead costs were $680,000. Instructions Compute the following variances for Dart Company for 2016 and indicate whether the variance is favorable or unfavorable. 1. Direct materials price variance. 2. Direct materials quantity variance. 3. Direct labor price variance. 4. Direct labor quantity variance. 5. Overhead controllable variance. 6. Overhead volume variance.