Exam 11: Standard Costs and Variance Analysis

Use the following information for the next 2 questions. Bellingham, Inc. incurred the following during a recent period: -The variable overhead spending variance equals

Use the following information for the next 7 questions. A small accounting firm budgets 200 hours of billings for the next month, and 60% of these hours are expected to be for tax return preparation services, with the remaining 40% for bookkeeping services. Tax work is billed at $50 per hour, and bookkeeping work is billed at $40 per hour. The variable costs for both types of services are $10 per hour. During the month 180 hours were billed, 90 of which were for tax work. -(Appendix 11A) The contribution margin budget variance was

Use the following information for the next 2 questions. Thurston Corp. uses a standard job cost system with the following standards: Thurston actually used 2,000 pounds of direct material that cost $10,000 and 500 direct labor hours that cost $7,500. -The entry to record the usage of direct labor would include a

Use the following information for the next 5 questions. During the period Richeleau produced 1,000 units of product. The flexible budget for standard costs is: -The direct materials inventory increased during the period by 1,000 (at standard cost). What was the actual cost of direct materials purchased during the period?

Use the following information for the next 7 questions. A small accounting firm budgets 200 hours of billings for the next month, and 60% of these hours are expected to be for tax return preparation services, with the remaining 40% for bookkeeping services. Tax work is billed at $50 per hour, and bookkeeping work is billed at $40 per hour. The variable costs for both types of services are $10 per hour. During the month 180 hours were billed, 90 of which were for tax work. -(Appendix 11A) The contribution margin variance was

Use the following information for the next 3 questions. Vashon Corporation had the following activity during a recent period: -Which of the following statements is false?

Use the following information for the next 4 questions. White, Inc. produces a chemical product whose primary component is purchased on credit and any discounts are always taken. The following material and labor elements make up the costs of the product: Each container of the chemical product contains 5.7 quarts of material. During the process 5% of the material is lost due to waste. Each container of product also requires 1.2 hours of labor. Each day 2 hours are taken for set-up, cleaning, and breaks. Also, the wage rate is $15 per hour and fringes/payroll taxes are 20% of wages. Clients can take a 3% discount if they pay invoices within 10 days; otherwise, the entire invoice amount is due within 30 days. 1 gallon equals 4 quarts. -The difference between actual capacity used and budgeted capacity is called

At the end of 20x1, ELM Corporation's production manager estimated direct labor overtime hours at 200 for the first quarter of 20x2. At the end of the first quarter, actual overtime hours totaled 180. This difference is most likely to lead to

How do managers decide which variances are important enough to investigate? I. By considering whether they are favorable or unfavorable II. By calculating and investigating all possible variances III. By considering whether it is large enough to justify investigation

Use the following information for the next 6 questions. Hyteck, Inc. is a capital intensive firm. Indirect costs make up nearly 70% of the product costs. The company has no direct material costs because customers provide the direct materials used for each job. To plan and control such costs, the firm employs flexible budgets and standard costs. Overhead rates, based on direct labor hours, are derived from the master budget. -The variable overhead spending variance was

Use the following information for the next 5 questions. During the period Richeleau produced 1,000 units of product. The flexible budget for standard costs is: -The actual cost of direct labor incurred was

Use the following information for the next 2 questions. Given the following account balances at the end of the first year of operations: -Assuming that variances are considered material, the entry and amount of the direct material efficiency variance allocated to work in process inventory is

Use the following information for the next 7 questions. Paris Perfumery sells two perfumes, L'Amor and Plaisir. The expected sales mix is one bottle of L'Amour to five bottles of Plaisir. Planned sales and variable costs for last period were as follows: -(Appendix 11A) The contribution margin variance was

The cost categories that are measured and monitored in a given organization depend, in part, on the costs that managers consider important.

Use the following information for the next 4 questions. White, Inc. produces a chemical product whose primary component is purchased on credit and any discounts are always taken. The following material and labor elements make up the costs of the product: Each container of the chemical product contains 5.7 quarts of material. During the process 5% of the material is lost due to waste. Each container of product also requires 1.2 hours of labor. Each day 2 hours are taken for set-up, cleaning, and breaks. Also, the wage rate is $15 per hour and fringes/payroll taxes are 20% of wages. Clients can take a 3% discount if they pay invoices within 10 days; otherwise, the entire invoice amount is due within 30 days. 1 gallon equals 4 quarts. -The standard quantity of material per finished unit is

Use the following information for the next 7 questions. Paris Perfumery sells two perfumes, L'Amor and Plaisir. The expected sales mix is one bottle of L'Amour to five bottles of Plaisir. Planned sales and variable costs for last period were as follows: -(Appendix 11A) The contribution margin budget variance was

The process of calculating variances and analyzing the reasons they occurred is called

Use the following information for the next 3 questions. Dem Mfg. has gathered the following data in preparing to record their direct labor payroll costs for the week: -The actual direct labor price was

For overhead variances, the difference between the flexible budget amounts and actual costs incurred is called the

The direct materials price variance is often based on materials purchased, rather than on materials used.