Exam 10: Standard Costing and Analysis of Direct Costs

Consider the following statements: I.The standard cost per unit of materials is used to calculate a materials price variance. II.The standard cost per unit of materials is used to calculate a materials quantity variance. III.The standard cost per unit of materials cannot be determined until the end of the period. Which of the above statements is (are) true?

Van Buren Frames manufactures hardwood luxury picture frames.The company uses standard costs to prepare its flexible budget.For the company's the first quarter of 20x8, direct material and direct labor standards for one of their most popular frames were as follows: Materials: 1.5 board feet per unit; $4.00 per board foot Labor: 2.0 hours per unit; $18.00 per hour During the first quarter, Van Buren produced 5,000 units of this product.At the end of the quarter, an examination of the materials records showed that the company used 7,000 board feet of materials and the direct materials cost variance was $1,750 U.Which of the following would be a logical explanation for this variance?

When considering whether to investigate a variance, managers should consider all of the following except the variance's:

The individual generally responsible for the direct-material price variance is the:

A direct-labor efficiency variance cannot be caused by:

For the quarter just ended, Halston, Inc.reported the following variances in one of its manufacturing departments: Material price variance, U Material quantity variance, F Labor efficiency variance, F Labor rate variance, negligible Machine hours efficiency, F The sum of the favorable variances exceeded the unfavorable materials price variance by a considerable amount.The quality of the output from the department was the same as usual.Halston operates very close to a JIT system for materials purchases, with virtually all material acquired during the quarter being used in manufacturing activities. Required: Is there any connection among these variances? If so, explain.

The standard hours allowed for the work performed are:

Listed below are five variances (and possible causes) that are under review by management of Knight Company.Which of the following is least likely to cause the variance indicated?

If a company has an unfavorable direct-material quantity variance, then:

Vasquez, Inc.is establishing the direct materials and direct labor standards for its leading product.Materials cost from the supplier are $5 per square foot, net of purchase discount.Freight-in amounts to $0.10 per square foot.Basic wages of the assembly line personnel are $10 per hour.Payroll taxes are approximately 20% of wages.How much is the direct labor cost standard per hour?

A favorable labor rate variance is created when:

Most companies close their variance accounts directly into Cost of Goods Sold.

Variances are computed by taking the difference between the product cost and standard cost.

Product costing is the process of accumulating the costs of a production process and assigning them to the completed products.

At the end of the accounting period, most companies close variance accounts to:

Which of the following variances cannot occur together during the same accounting period?

Perez, Inc.recently completed 56,000 units of a product that was expected to consume four pounds of direct material per finished unit.The standard price of the direct material was $8.50 per pound.If the firm purchased and consumed 228,000 pounds in manufacturing (cost = $1,881,000), the direct-material quantity variance would be figured as:

Normal defect rates in an assembly process would be considered if a company desires to establish a series of practical manufacturing standards.

The aggregate nature of the vari ances in standard costing is a drawback in the advanced manufacturing setting that makes it difficult for man agers to determine their cause.

A statistical control chart is best used for determining: