Exam 10: Standard Costing and Analysis of Direct Costs

When spending is lower than expected for direct materials, the amount by which spending is less than planned is called an unfavorable direct-material variance (U).

Use the following information to answer the following Questions -The direct-labor rate variance is:

Due to evaporation during production, X-treme Building Styrofoam Company requires 5 pounds of material input for every 4 pounds of styrofoam sheets manufactured. During March, the company produced 3,800 pounds of good sheets. Required: Compute the total standard allowed input quantity, given the good output produced.

Maki, Inc. manufactures a product that has the following standard costs:

An unfavorable labor efficiency variance is created when:

Which of the following variances are most similar with respect to the manner in which they are calculated?

Variance proration is the process of closing all variance accounts directly into Cost of Goods Sold.

Interactions among variances often occur, making it even more difficult to determine the responsibility for a particular variance.

A standard cost:

A favorable labor efficiency variance is created when actual labor hours worked exceed standard hours allowed.

Use the following information to answer the following Questions Thomas Enterprises purchased 56,000 pounds (cost = $420,000) of direct material to be used in the manufacture of the company's sole product. According the production specifications, each completed unit requires five pounds of direct material at a standard cost of $7.80 per pound. Direct materials consumed by the end of the period totaled 53,500 pounds in the manufacture of 10,900 finished units. An examination of Thomas’ payroll records revealed that the company worked 22,000 labor hours (cost = $319,000) during the period, and specifications called for each completed unit requiring two hours of labor at a standard cost of $14.80 per hour. Assume that the company computes variances at the earliest point in time. -Thomas' direct-labor rate variance was

Use the following information to answer the following Questions Airon Company recently completed 10,600 units of its single product, consuming 32,000 labor hours that cost the firm $480,000. According to manufacturing specifications, each unit should have required 3 hours of labor time at $15.40 per hour. -On the basis of this information, determine Airon's total labor variance.

Product costs are used only in managerial accounting.

Which of the following would be considered if a company desires to establish a series of practical manufacturing standards?

Bender Corporation has a favorable materials quantity variance. Which department would likely be asked to explain the cause of this variance?

A production supervisor generally has little influence over the:

Which of the following is a criticism of standard costing, as applied to today's manufacturing environment?