Exam 10: Standard Costing: a Managerial Control Tool

Match the variance with its correct calculation. a. Actual Quantity *Actual Price b. (Actual Hours*Actual Rate) - (Standard Hours *Standard Rate) c. (Actual Quantity *Actual Price) - (Standard Quantity * Standard Price) d. (Actual Hours - Standard Hours) * Standard Rate e. (Actual Price -Standard Price) *Actual Quantity f. Standard Quantity * Standard Price g. (Actual Rate - Standard Rate) * Actual Hours h. (Actual Quantity - Standard Quantity) *Standard Price -Labor Rate Variance

During September, a small roofing company purchased 500 bundles of a certain type of shingle at a price of $35 per bundle, $5 less than the standard price. Its standard quantity of this type of shingle is 550 bundles. What is the journal entry to record the purchase of materials?

During August, 10,000 units were produced. The standard quantity of material allowed per unit was 10 pounds at a standard cost of $3 per pound. If there was an unfavorable usage variance of $18,750 for August, the actual quantity of materials used must be

Figure 10-9. James Company manufactures t-shirts. During the year, it manufactured 250,000 t-shirts, using 2 hours of direct labor at a rate of $8.50 per hour. The materials and labor standards for manufacturing the t-shirts are: It took James 1,400,000 yards at $2.50 per yard to make the 250,000 t-shirts. -Refer to Figure 10-9. What is James' labor rate variance?

Assume that SQ = Standard Quantity, SP = Standard Price, AQ = Actual Quantity, and AP = Actual Price. The correct entry along with the equation to record the issuance and usage of materials, assuming a favorable materials usage variance, is as follows

The ____________________ measures the difference between what should have been paid for raw materials and what was actually paid.

Claire Company uses a standard costing system. The following information pertains to direct labor costs for February: What is the total labor budget variance for Claire Company?

Crawford Corporation has the following information:

Figure 10-6. Extreme Builders constructs houses. The standard labor rate is $25 per hour and the standard number of hours is 15,000 hours per home. During the year, it constructed 12 homes using 18,000 labor hours per home and a rate of $28 per hour. -Refer to Figure 10-6. Calculate the labor efficiency variance.

____________________ is the difference between the actual and standard unit price of an input multiplied by the number of inputs used.

Managers develop quantity standards when they decide what amount of input should be used per unit of output.

Standard costs are developed for direct materials, direct labor, and variable overhead only.

Max Company has developed the following standards for one of its products. The following activity occurred during the month of October: The company records materials price variances at the time of purchase. The direct materials price variance is

The sum of the labor rate and labor efficiency variances will always add up to the total labor variance.

Bender Corporation produced 100 units of Product AA. The total standard and actual costs for materials and direct labor for the 100 units of Product AA are as follows: What is the labor efficiency variance for Bender Corporation?

MATCHING Match each item with the correct statement below. a. Quantity Standards b. Ideal Standards c. Price Standards d. Standard Cost Sheet e. Upper Control Limit f. Currently Attainable Standards g. Kaizen Standards -This reflects the planned improvement that is set, which will help reduce nonvalue-added costs.

Figure 10-5. -Refer to Figure 10-5. What is Seaside's total labor variance?

Roberts Company uses a standard costing system. The following information pertains to direct materials for the July: Roberts Company reports its material price variances at the time of purchase. What is the material usage variance for Roberts Company?

Just Right Inc. produces jeans. The following standards have been established: During the year 25,000 pairs of jeans were produced. 150,000 yards of denim were purchased and used at $1.23 per yard. Actual direct labor hours were 36,800 at $9.25 per hour.

The production data needed to calculate the standard unit cost as well as the underlying details for the standard cost per unit are provided in