Exam 10: Standard Costing and Variance Analysis

Assume the following information for Wallace Company: What is Wallace's direct materials price variance? (do not round intermediate calculations, round final answer to the nearest cent)

Use the following information to answer Questions below. The following data relates to Camire Corporation's operations for the month. 3,000 finished units of product were produced and the normal monthly capacity is 4,800 direct labor hours. -What is the labor efficiency variance?

Berghof Foods manufactures various gourmet ethnic food products. Production of its specialty hummus requires a half pound of material per container, which costs $12 per pound and requires 45 minutes (i.e., 0.75 hour) of direct labor. Direct labor costs $20 per hour; the variable overhead rate is $10 per direct labor hour; and the fixed overhead rate is $6 per direct labor hour. What is the standard cost for each container of specialty hummus produced?

The equation to calculate the direct materials price variance is:

How does a favorable variance normally affect Cost of Goods Sold at the end of the period?

When an unfavorable variance occurs, it normally debited to the Work in Process Inventory account.

Why are the various cost variances recorded in separate accounts if they are simply closed to Cost of Goods Sold at the end of the year?

The flexible budget variance is equal to the difference between actual costs incurred and budgeted costs.

Assume the following information for Judkins Inc.: What is Judkins' direct materials efficiency variance? (do not round intermediate calculations, round final answer to the nearest cent)

What is the simplified equation for calculating the direct materials efficiency variance?

If the direct labor efficiency variance is zero, and the hourly wage rate paid to employees equals the budgeted rate, how would hiring temporary or part-time workers (rather than full-time workers) create a favorable direct labor rate variance?

Lolich Clothing manufactures a single style of designer jeans. Each pair is hand cut and hand sewn with unique designs. Production of each pair requires 2 yards of material, which costs $17 per yard, and requires 3 hours of direct labor. Direct labor costs $15 per hour; the variable overhead rate is $7 per direct labor hour; and the fixed overhead rate is $3.50 per direct labor hour. What is the standard cost for each pair of designer jeans produced?

Which of the following factors would most likely not influence the standard level of variable overhead capacity?

What accounts could possibly be affected by the purchase of direct materials on account?

The total number of hours worked by employees is always directly tied to the total level of production.

Use the following information to answer Questions below. Kraig Fencing considers 4,000 direct labor hours or 100 fences to be its normal monthly capacity. Its standard variable overhead rate is $9 per direct labor hour. During the current month, $33,500 of variable overhead costs were incurred in working 3,800 direct labor hours to complete 92 fences. -What is the variable overhead spending variance?

Should the standard direct labor hours needed for a project reflect 100% efficiency in use of time? Why or why not?

Use the following information to answer Questions below. Kraig Fencing considers 4,000 direct labor hours or 100 fences to be its normal monthly capacity. Its standard variable overhead rate is $9 per direct labor hour. During the current month, $33,500 of variable overhead costs were incurred in working 3,800 direct labor hours to complete 92 fences. -What is the total variable overhead flexible budget variance?

When materials are purchased, which of the following accounts could be affected?

SureFoot Shoes manufactures running shoes and other athletic apparel. While preparing year-end financial statements, management analyzed the following information (from the yearly budget, and summarized from this year's results): Assume that the flexible budget variance is not considered to be material. What is the reported Cost of Goods Sold?