Exam 7: Flexible Budgets, Variances, and Management Control: I

Use the information below to answer the following question(s). Tractor Corporation produces toy tractors. The company uses the following direct cost categories: Actual performance for the company is shown below: Actual output: 5,000 units Direct Materials: Direct Manufacturing Labour: Direct Marketing Labour: -What is the rate variance of the direct materials?

Use the information below to answer the following question(s). Ames Golf Company used the following data to evaluate their current operating system. The company sells 1 pack of golf balls for $10 per pack. The $10 selling price is also the budgeted selling price. -What is the actual operating income for Ames Golf Company using the actual results?

Tyson's Hardware, a retailing company with several locations, anticipated that it would have 96,000 sales units for 664 customer shipments. Average storage bin usage for various inventories was estimated to be 200 storage bins per day. The costs and cost drivers were determined to be as follows: ? Required: a. Prepare a static-budget and show the static-budget variances for each cost item and the total static-budget variance. b. Prepare a flexible-budget and show the flexible-budget variances for each cost item and the total flexible-budget variance.

Nicholas Company manufacturers TVs. Some of the company's data was misplaced. Use the following information to replace the lost data: Required: a. What are the respective flexible-budget revenues (A)? b. What are the static-budget revenues (B)? c. What are the actual variable costs (C)? d. What is the total flexible-budget variance (D)? e. What is the total sales-volume variance (E)? f. What is the total static-budget variance?

The following data for the Alma Company pertain to the production of 1,000 urns during August. Direct Materials (all materials purchased were used): Standard cost: $6.00 per kilogram. Total actual cost: $5,600. Standard cost allowed for units produced was $6,000. Materials efficiency variance was $120 unfavourable. Direct Manufacturing Labour: Standard cost is 2 urns per hour at $24.00 per hour. Actual cost per hour was $24.50. Labour efficiency variance was $336 favourable. Required: a. What is standard direct material cost and quantity per urn? b. What is the direct material rate variance? c. What is the total actual cost of direct manufacturing labour? d. What is the labour rate variance for direct manufacturing labour?

Waddell Productions uses a standard cost system for all manufacturing transactions. For the month of June the following activities have taken place: Required: Record the necessary journal entries to: 1. Record the materials purchases assuming that materials rate variances are recorded at the time of purchase. 2. Record the materials placed into production. 3. Record the direct labour used in production.

Vienna Chocolate Company produces fudge in large batches. One batch of fudge has the following standard costs and amounts: Vienna Chocolate Company produced 400 batches of fudge in the most recent month. Actual input costs and per batch usage levels were as follows: Required: a. Calculate the total material input rate variance. b. Calculate the total material efficiency variance. c. Calculate the total labour rate variance. d. Calculate the total labour efficiency variance.

During February the Lungren Manufacturing Company's costing system reported several variances that the production manager was surprised to see. The following information is for the manufacture of garden gates, its only product: 1. Direct materials rate variance, $800 unfavourable. 2. Direct materials efficiency variance, $1,800 favourable. 3. Direct manufacturing labour rate variance, $4,000 favourable. 4. Direct manufacturing labour efficiency variance, $600 unfavourable. Required: a. Provide the manager with some ideas as to what may have caused the rate variances. b. What may have caused the efficiency variances?

Wilson's Summer Cottons manufactures shirts and other cotton clothing. A certain designed t-shirt requires the following: Direct materials standard 0.9 square metres at $1.50 per metre Direct manufacturing labour standard 0.25 hours at $14.00 per hour During the third quarter, the company made 7,500 t-shirts and used 8,250 square metres of fabric costing $11,550. Direct labour totaled 1,650 hours for $23,265. Required: a. Compute the direct materials price and efficiency variances for the quarter. b. Compute the direct manufacturing labour rate and efficiency variances for the quarter.

Littrell Company produces chairs and has determined the following direct cost categories and budgeted amounts: ‪ Required: a. What is the combined total of the flexible-budget variances? b. What is the rate variance of the direct materials? c. What is the rate variance of the direct manufacturing labour and the direct marketing labour, respectively? d. What is the efficiency variance for direct materials? e. What are the efficiency variances for direct manufacturing labour and direct marketing labour, respectively?

Use the information below to answer the following question(s). The following data for a pottery company pertain to the production of 2,000 clay pots during July. Direct Materials (all materials purchased were used): Standard cost: $6.00 per kilogram of clay Total actual cost: $11,200 Standard cost allowed for units produced was $12,000 Materials efficiency variance was $240 unfavourable Direct Manufacturing Labour: Standard cost is 2 pots per hour at $24.00 per hour Actual cost per hour was $24.50 Actual labour was 972 hours -What is the standard direct material amount per pot?

Glenn's Draperies manufactures curtains. A certain window requires the following: Direct materials standard is 10 square metres at $5 per metre Direct manufacturing labour standard is 5 hours at $10 During the second quarter the company made 1,500 curtains and used 14,000 square metres of fabric costing $68,600. Direct labour totaled 7,600 hours for $79,800. Required: a. Compute the direct materials price and efficiency variances for the quarter. b. Compute the direct manufacturing labour rate and efficiency variances for the quarter.

A packaging company produces cardboard boxes in an automated process. The required direct materials costs $0.30 per unit. Fixed manufacturing overhead costs are budgeted at $24,000 per month and are allocated based on units of production. The budgeted contribution margin per unit is $0.85, and administration fixed costs are budgeted at $7,500 per month.What is the flexible-budget amount for operating income for 40,000 and 20,000 units, respectively?

Samson Equipment Ltd. is a company that manufactures an abdominal exerciser called The Ab Rippler. The following information is for three of the company's activities in 2015: Required: a. Calculate the flexible-budget variance for each activity in 2015. b. Calculate the price and efficiency variances for each activity in 2015.

Signet Engineering uses a standard cost system for all manufacturing transactions. For the month of April the following activities have taken place: Required: Record the necessary journal entries to: 1. Record the materials purchases assuming that materials rate variances are recorded at the time of purchase. 2. Record the materials placed into production. 3. Record the direct labour used in production.

Use the information below to answer the following question(s). Sawyer Industries Inc. (SII), developed standard costs for direct material and direct labour. In 2016, SII estimated the following standard costs for one of their major products, the 30-litre heavy-duty plastic container. During July 2017, SII produced and sold 10,000 containers using 2,200 kilograms of direct materials at an average actual cost per kilogram of $24 and 1,050 direct manufacturing labour hours at an average actual wage of $14.75 per hour. -July's direct material efficiency variance is

Wilson's Winter Woolens manufactures jackets and other wool clothing. A certain designed ski parka requires the following: Direct materials standard 2 square metres at $13.50 per metre Direct manufacturing labour standard 1.5 hours at $20.00 per hour During the third quarter, the company made 1,500 parkas and used 3,150 square metres of fabric costing $39,375. Direct labour totaled 2,100 hours for $45,150. Required: a. Compute the direct materials price and efficiency variances for the quarter. b. Compute the direct manufacturing labour rate and efficiency variances for the quarter.

Answer the following question(s) using the information below. Apple Valley Orchards, Inc. (AVO), developed standard costs for direct material and direct labour. In 2016, AVO estimated the following standard costs for one of their most well loved products, the AVO classic Grandma's large apple pie which had a brown sugar coating on the top of the crust as well as including cranberry and mince ingredients in addition to the apples. During September 2017, AVO produced and sold 1,200 pies using 1,875 kilograms of direct materials at an average cost per kilogram of $7.00 and 280 direct labour hours at an average wage of $14.25 per hour. -September's direct labour rate variance is

Delila Equipment Ltd. is a company that manufactures an abdominal exerciser called The Tummy Toner. The following information is for three of the company's activities in 2015: Required: a. Calculate the flexible-budget variance for each activity in 2015. b. Calculate the price and efficiency variances for each activity in 2015.

Answer the following question(s) using the information below. Apple Valley Orchards, Inc. (AVO), developed standard costs for direct material and direct labour. In 2016, AVO estimated the following standard costs for one of their most well loved products, the AVO classic Grandma's large apple pie which had a brown sugar coating on the top of the crust as well as including cranberry and mince ingredients in addition to the apples. During September 2017, AVO produced and sold 1,200 pies using 1,875 kilograms of direct materials at an average cost per kilogram of $7.00 and 280 direct labour hours at an average wage of $14.25 per hour. -September's direct labour efficiency variance is