Exam 11: Standard Costs and Variances

Razzle Baking Company gathered the following actual results for the current month: Actual amounts: Budgeted production and standard costs were: What is the direct labor efficiency variance?

The variable overhead efficiency variance is also called the variable overhead spending variance.

LVN Corporation's direct labor costs and related information for the month of June were as follows: What is LVN Corporation's direct labor efficiency variance?

Coltrane Music manufactures musical instrument for sale to students and professionals. The information for one of Coltrane's most popular products, professional saxophones, follows: What is the labor rate variance for saxophones?

Neil's Service Shop performs routine vehicle maintenance. One such service is tire rotations. Neil's reports the following budgeted and actual amounts for tire rotations for the month of August. What is the labor efficiency variance for the month of August?

Madden Corporation manufactures t-shirts, which is its only product. The standards for t-shirts are as follows: During the month of May, the company produced 1,250 t-shirts. Related production data for the month follows: What is the direct materials price variance for the month?

Sandy's Sauces, which produces stir-fry sauces, is developing direct material standards. Each bottle of sauce requires 0.70 kilograms of base. The allowance for waste is 0.05 kilograms per bottle, while the allowance for rejects is 0.09 kilograms per bottle. What is the standard quantity of base per bottle?

A rate variance for direct labor measures how well a company keeps unit prices of labor inputs within standards.

Michael Corporation manufactures railroad cars, which is its only product. The standards for railroad cars are as follows: During the month of March, the company produced 1,650 railroad cars. Related production data for the month follows: What is the direct labor rate variance for the month?

Nixon's Diner bakes pies in large batches. One batch of pies has the following standard costs and amounts: Nixon's Diner baked 425 batches of pies in the most recent month. Actual costs and usage levels were as follows: Required: a. Calculate the material price variance. b. Calculate the material quantity variance. c. Calculate the labor rate variance. d. Calculate the labor efficiency variance.

If a company recognizes variances at the earliest point possible, raw materials inventory will be debited for the actual quantity of raw materials purchased and costed at the actual price paid per unit.

How is the fixed overhead budget variance calculated?

The direct labor rate variance is calculated by multiplying the standard hours that should have been worked for the actual output by the difference between the standard labor rate and the actual labor rate.

The standard variable overhead cost rate for the Gordon Company is $11.25 per unit. Budgeted fixed overhead cost is $50,000. The company budgeted 5,000 units for the current period and actually produced 4,150 finished units. What is the fixed overhead volume variance? Assume the allocation base for fixed overhead costs is the number of units expected to be produced.

When auto manufacturer BMW purchased the Rolls-Royce brand name, BMW had to hire and train a new staff of assembly workers. The new workers were paid $25 per hour, worked a total of 7,500 hours, and produced 2,000 cars. BMW budgeted for a standard labor rate of $27 per hour and 1.25 direct labor hours per car. What is the direct labor efficiency variance for the Rolls-Royce division?

Jackson Industries has collected the following data for one of its products: What is the total actual cost of the direct materials used?

Dozen Bakery makes cupcakes and cookies. Dozen gathered the following information for the current year regarding its use of flour and butter (flour is a direct material for cupcakes and butter is a direct material for cookies): What is the direct material quantity variance for butter in the cookies?

Myles Company budgeted 10,500 pounds of direct materials costing $23.50 per pound to make 5,300 units of product. The company actually purchased 11,000 pounds of direct materials costing $25.00 per pound to make the 5,300 units. What is the direct materials quantity variance?

The ________ is the difference between total actual overhead costs and the flexible budget amount for overhead costs for actual production.

All variances discovered by management must be investigated.