Exam 10: Standard Costs and Performance Reports

Assume that the standard cost to make one unit of product includes 12 units of raw materials at a price of $2 per unit. In Aug, 17,000 units of raw materials were purchased for $50,800, and 12,300 units of raw materials were used to produce 1,000 units of finished product. What is the materials quantity variance?

The Red Company manufactures decorative scarecrows that have a standard cost of $1.75 per pound for direct materials used in the manufacturing process. During October, 15,000 pounds of materials were purchased for $2.00 per pound, and 12,000 pounds were actually used in making 5,000 scarecrows. There were no beginning inventories. Required: a. Determine the materials price variance assuming that materials costs are the responsibility of the materials purchasing manager. b. Determine the materials price variance assuming that materials costs are the responsibility of the production manager. c. Determine the material quantity variance if the standard materials for each scarecrow are 3 pounds. d. Discuss the issues involved in determining the price variance at the point of purchase versus the point of consumption.

The management of Kaplan Enterprises is analyzing variable overhead variances for the fiscal period just ended. During the period, Kaplan's management used 5,000 hours of direct labor. It had budgeted to use 8,000 hours of direct labor. Hours of direct labor is the single overhead driver of variable overhead. Variable overhead consists of two items. Indirect labor was budgeted as $2.00 per hour of direct labor. Indirect materials was budgeted as $1.00 per hour of direct labor. Actual variable overhead was $30,000. Calculate Kaplan's variable overhead spending variance.

Which of the following is not an example of a responsibility center?

Budgets based on the actual level of output, rather than the output originally budgeted, are called: