Exam 11: Standard Costs and Variance Analysis

Expected costs per unit of input are called

If a variance is considered material, it should be allocated to work in process inventory, finished goods inventory, and cost of goods sold.

Use the following information for the next 4 questions. Hogle Mfg. Co. uses a standard costing system. The standard time to produce one unit is 4 hours, and normal production is 3,000 units monthly. Overhead costs were estimated to be $135,000. The standard variable overhead rate is $5 per machine hour. During April the following results were recorded: -The variable overhead efficiency variance was

The direct materials efficiency variance tells managers about the efficiency of the purchasing process.

Normal fluctuations in labor hours may cause a favorable direct labor efficiency variance.

ELM Corporation introduced a new automated production process that has reduced the amount of labor needed, but not affected the use of materials. The standard cost system has not been changed yet to reflect this new process. Assuming the machinery is functioning properly and that workers were properly trained in its use, which of the following variances is most likely to result?