Exam 10: Variance Analysis and Standard Costing

When goods are completed and transferred from Work In Process Inventory (WIP) to Finished Goods (FG) Inventory, the costs in the transfer accounting entry are

When assigning costs for direct materials, direct labor, and manufacturing overhead to Production, the costs should be recorded as

The formula for the direct materials (DM) price variance is

The correct equation for a Master Budget Variance is

Which of the following shows the required quantities and current prices of manufacturing costs For each input: direct materials, direct labor, variable manufacturing overhead and fixed manufacturing overhead?

Ember Industries incurs an actual unit sales price of $6 and a budgeted unit sales price of $5 for a butane fireplace lighter. Last week, the company actually sold 45 lighters when it budgeted to sell 50 lighters. Compute Ember's Master Budget Variance, Flexible Budget Variance, and Sales Activity Variance. Show all computations.

Philly Rug Company produces designer rugs for clients. The standard size rug will require 3 yards of direct materials (DM), 1 hours of direct labor (DL) time, and 2 hours of machine time. MOH costs are applied based on machine hours. DM is expected to cost $8.00 per yard, DL is budgeted at $12 per hour, and cost of machine time is estimated at $3/machine hour for variable-MOH and $2/machine hour for fixed-MOH. Create a standard cost card for a standard size rug for Philly Rug Company to compute the standard cost for one unit of product.

When an employee overspends on a business expense where a specific guideline has been set, the spending above the guideline is called a

How do managers use benchmarking to plan and control in order to achieve company objectives?

Mejor Medical Machines manufactures hospital equipment. The company was recently able to purchase materials for production and secure a bulk purchase discount with an additional prompt payment cash discount. However, as the materials were transferred into production of $3,900 from DM Inventory, due to the lower quality of materials, additional calibrations were needed to achieve the original quality in the production of the equipment, and an unfavorable Direct Materials (DM) Efficiency Variance of $500 resulted. Record the journal entry to recognize this use of the direct materials into production for Mejor Medical assuming that this unfavorable variance is recognized when materials are placed into production.

A company's direct labor (DL) efficiency variance is computed as

Describe production variances and identify three specific production variances.

The equation for the simplified sales activity variance is

Identify at least two causes for fixed-MOH variances.

Kidzlane has direct materials (DL) standards of 2 pounds per unit at $4 per pound for its most popular toy. Last month, 5,600 pounds of direct materials that actually cost $28,000 were used to produce 3,000 toy units. The direct materials (DM) efficiency variance for last month was

A favorable Variable-MOH Price Variance means that

Which of the following variances focuses on using the contribution margin as the basis for measuring the full impact of sales activity changes?

Mejor Medical Machines manufactures hospital equipment. The company recently purchased materials for production, and was able to secure a bulk purchase discount with an additional prompt payment cash discount. As a result, the original purchase on account with all of the discounts was $3,900, which resulted in a Direct Materials (DM) Price Variance of $900, favorable. Record the journal entry to recognize this raw materials purchase for Mejor Medical assuming that the variance is recognized at the time of purchase.

Variances with overall favorable effects will carry

The variance that highlights the difference between actual sales volume and the master budget Sales volume is the