Exam 19: Controlling Cost and Profit

Exhibit 19-7 The following figures represent 100% capacity for Starr Manufacturing: Starr Manufacturing normally produces at 100% capacity. During the month of October, the company started and completed 10,000 units of product, using variable manufacturing overhead costs of $20,000. The company used 6,400 direct labor hours in October instead of the 6,000 hours expected for the activity level achieved. -Refer to Exhibit 19-7. Based on the information above, the standard variable manufacturing overhead cost in terms of actual direct labor hours is:

The type of center that is evaluated on the basis of residual income is a(n):

All favorable labor rate variances indicate that:

A disadvantage to decentralization is:

Exhibit 19-3 The following information relates to Lamb Company: -Refer to Exhibit 19-3. Given the information above, total actual labor costs are:

Twin Pines Custom Trim established the standard labor rate as $8.60 and the standard hours as 4 hours per unit. During June, 100 units were manufactured, and 410 actual labor hours were incurred at a rate of $8.50 per hour. The labor efficiency variance is:

Exhibit 19-5 Ridgeline Corporation has the following operating data for the year: -Refer to Exhibit 19-5. Given the above data for Ridgeline Company, what is the residual income assuming the minimum rate of return on assets is 10%?

Lake Stevens Manufacturing Company uses a standard cost system. After actual manufacturing costs have been recorded and manufacturing overhead has been applied, there is a credit balance of $5,000 in the manufacturing overhead account. Variances were as follows: Prepare the journal entry to recognize the manufacturing variances.

Piedmont Company incurred the following actual costs for direct materials during July: During July, the company produced 2,000 units of its product. The standard costs for direct materials have been established as follows:

The variance computed by multiplying the difference between the actual rate and the standard rate by the actual hours is:

Exhibit 19-10 The following information is given for Roe Company: Fixed manufacturing overhead is applied to production based on direct labor hours. Refer to Exhibit 19-10. Using the data above, compute the volume variance.

Exhibit 19-7 The following figures represent 100% capacity for Starr Manufacturing: Starr Manufacturing normally produces at 100% capacity. During the month of October, the company started and completed 10,000 units of product, using variable manufacturing overhead costs of $20,000. The company used 6,400 direct labor hours in October instead of the 6,000 hours expected for the activity level achieved. -Refer to Exhibit 19-7. Based on the information above, the overhead rate used to apply variable manufacturing overhead to Work-in-Process is:

When direct labor is the best cost driver for variable manufacturing overhead, a favorable direct labor efficiency variance would result in:

Which of the following can be evaluated using ROI?

An independent subsidiary of a decentralized company would be considered a(n):

Which of the following may affect the behavior of costs?

The following information is available for the Ringo Corporation: The amount of variable manufacturing overhead applied to Work-in-Process Inventory in March would be:

Which type of responsibility center would usually be found at the highest level in an organization?

The MEC Company has two divisions: the Computer division and the Printer division. Cost and revenue information for the two divisions for the year 2011 is as follows: Prepare a segment margin statement showing each division's contribution and segment margins and the overall company profit.

Exhibit 19-11 The following data is known for Carlin, Inc.: Standards: Refer to Exhibit 19-11. Using the information above, compute the fixed manufacturing overhead budget variance for Carlin, Inc.