Exam 6: Performance Evaluation: Variance Analysis

Fox Company manufactures decorative fountains used by hotels and restaurants.The company applies fixed overhead based on direct labor hours.Fox Company's fixed overhead spending variance for the year was $6,500 unfavorable.For the current year, the company had budgeted to produce 78,000 fountains.The company's actual fixed overhead for the year was $689,000.Fox produced 75,000 fountains and used 131,250 direct labor hours, which was the standard hours allowed for the number of fountains produced.What was Fox's budgeted fixed overhead rate per direct labor hour for the year (if necessary, round your answer to the nearest cent)?

Thrope, Inc.purchased 1,700 pounds of direct materials at a price of $1.20 per pound.The standard price of the material is $1.30 per pound.Thrope used 1,500 pounds in production while the standard pounds allowed for actual production was 1,300. Required: Calculate the direct materials price and quantity variances and indicate whether the variances are favorable or unfavorable.

The difference between actual results and master budget amounts is referred to as

The flexible budget variance reflects how efficiently the company operated in producing a given level of sales.

The master budget is an example of a flexible budget.

Holly Industries manufactures artificial holiday wreaths.Its most popular wreath requires 3 yards of artificial pine boughs and 15 sprigs of holly berries.In August, the company purchased 4,000 yards of artificial pine bough, and 20,000 sprigs of holly berries.Holly paid $2.65 per yard for the artificial pine bough and purchased 4 boxes of holly berries for $7,000 per box, each box containing 5,000 sprigs.The standard price for artificial pine bough is $2.60 per yard, and the standard price per sprig of holly berry is $1.45.During August, Holly produced 1,250 wreaths and used 3,625 yards of artificial pine bough and 19,000 sprigs of holly berries.What is Holly's direct materials quantity variance for artificial pine boughs for August?

Assembly line workers at Thompson Manufacturing worked a total of 12,000 direct labor hours to produce 36,000 units.The standard for producing one unit is 15 minutes at a wage rate of $10.70.If the actual wage rate was $10.50 per direct labor hour, Thompson's direct labor rate variance is

Morgan's, Inc.has provided you with the following financial information: Required: Prepare a performance report for the period in good form.

Ledbetter's Adventures manufactures outdoor camp ovens.In planning for the coming year, the budget committee is considering two different sales targets: 2,000 ovens or 2,600 ovens.Ovens sell for $280 each.The standard cost information for an oven is as follows: Required: Prepare a flexible budget for the three sales levels under consideration.Omit the heading.

Margie's Creations manufactures ceramic figurines.In planning for the coming year, the budget committee is considering two different sales targets: 6,000 figurines and 8,000 figurines.Figurines sell for $39 each.The standard cost information for one figurine is as follows: Required: Prepare a flexible budget for the three sales levels under consideration.Omit the heading.

Investigating the cause of a variance is a part of a manager's responsibility under which of the following management functions?

A favorable variance is a variance that

A variance is labeled as "favorable" or "unfavorable" indicating the effect on managers' bonuses.

The direct materials price variance is calculated using the standard quantity of direct materials purchased, the actual price paid for the direct materials, and the standard price for the direct materials purchased.