Exam 10: Standard Costs and Performance Reports

The variance that measures the amount of variable overhead that should have been saved (or incurred) because of the efficient (or inefficient) use of the measurement base is the:

Charlene Company has set labor costs at $24 per unit of output, based on 3 hours allowed to produce each finished unit. Last month, 1,500 direct labor hours were used, and 750 units of output were manufactured at a total cost of $36,000. Required: a. Determine the labor rate variance. b. Determine the labor efficiency variance. c. If the company used fewer direct labor hours than those reflected in the standards, which variance would be affected? Explain.

The approach toward management that considers the absence of significant differences between planned and actual results as an indication that everything is proceeding as planned is known as:

The net sales volume variance is a measure of the difference between actual and budgeted sales volume times the budgeted contribution margin.

Standard costs:

Excel Plumbing Company has three responsibility centers: sales, production, and administration. The following information pertains to the June activities of Excel Plumbing: Required: Prepare a reconciliation of budgeted and actual contribution income.

If the actual labor rate exceeds the standard labor rate and if the actual labor-hours exceed the number of hours allowed, the total labor flexible budget variance will be:

Connell manufactures specialty electronic circuitry through a unique photo-electronic process. One of the primary products, Model GT40, has a standard labor time of 0.5 hour and a standard labor rate of $7.00 per hour. During March, the following activities pertaining to direct labor for GT40 were recorded: The Labor rate variance and Labor efficiency variance are:

The total fixed overhead flexible budget variance is equal to the:

Old Stone Company management is analyzing the company's standard cost variances for direct materials for the most recent period. The following information was available from company records. There were no increases or decreases in inventories during the period. Calculate the materials quantity variance for the period.

The following budgeted and actual volume and cost data are for July of this year: a. Prepare a static budget analysis of production costs for July of this year. b. Prepare a flexible budget analysis of production costs for July of this year.

Next Generation Company management is analyzing the company's standard cost variances for direct materials for the most recent period. The following information was available from company records. There were no increases or decreases in inventories during the period. Calculate the materials price variance for the period.

The following information pertains to an item sold by Boyd Company: Required: a. Determine the sales price variance. b. Determine the sales volume variance. c. Reconcile the difference between budgeted and actual revenues using the sales variances computed in requirements a and b. d. Compute the net sales volume variance. e. Determine the total contribution margins for budgeted and actual volumes using standard costs.

The difference between the standard variable overhead cost for the actual inputs of the measurement base and the flexible budget cost allowed for variable overhead based on outputs is known as the:

Jacksonville uses a standard cost system for each of its refineries. For the Louisiana refinery, the monthly fixed overhead budget is $8,000 for a planned output of 5,000 barrels. For September, the actual fixed cost was $8,750 for 5,100 barrels. The fixed overhead budget variance is:

The management of Brickstone Industries is analyzing fixed manufacturing overhead variances for the fiscal period just ended. It notices that the total fixed manufacturing overhead variance was $240,000 Unfavorable and that the fixed overhead budget variance was $100,000 Favorable. However, Brickstone's accountants had failed to calculate the fixed overhead volume variance. The standard fixed overhead rate was $10 per machine hour. What is Brickstone's fixed overhead volume variance?

Net sales volume variance will not be favorable:

Both investment center and cost center managers are responsible for managing:

A labor efficiency variance results from the inefficient use of labor quantity to produce a given amount of product or service.

Blue Lite manufactures decorative weather vanes that have a standard materials cost of two pounds of raw materials at $2 per pound. During November 500 pounds of raw materials costing $4 per pound were used in making 450 weather vanes. The materials price and quantity variance are: