Exam 11: Standard Costs and Variances

Puget Company has gathered the following information about its purchase and use of raw materials for December: Puget Company uses a standard cost system. What is the materials price variance?

Schenley Manufacturing builds playground equipment that it sells to elementary schools and municipalities. Schenley's management has contracted you to perform a variance analysis on the fixed manufacturing overhead for its line of slides. Schenley's cost accounting team informs you that it allocates fixed overhead based on machine hours. This period production was budgeted at 375 slides. Budgeted and actual production data follows: What is the fixed manufacturing overhead budget variance for this period?

The total variable manufacturing overhead variance is composed of the rate variance and the efficiency variance.

Fabian Fabrication machines heavy-duty brake rotors that are used on commercial airliners. Fabian's management developed the following standard costs: Actual activity for October: What is the variable manufacturing overhead efficiency variance for October?

Sherwin Chemicals produces commercial strength cleansing supplies. Two of its main products are window cleanser that uses ammonia, and floor cleanser that uses bleach. Information for the most recent period follows: What is the direct material quantity variance for the bleach?

Yummy-Tummy Foods has the following information about its standards and production activity for November: Actual manufacturing overhead cost incurred, $85,000 Standard manufacturing overhead: Variable manufacturing overhead cost @ $5.75 per unit produced Fixed manufacturing overhead cost @ $8.45 per unit produced ($84,500/10,000 budgeted units) Actual units produced, 12,000 Assume the allocation base for fixed overhead costs is the number of units to be produced. How much are the standard overhead costs allocated to actual production?

The Chilton Corporation specializes in manufacturing one type of desk lamp. Chilton allocates variable manufacturing overhead costs on the basis of machine hours. Chilton budgeted .5 machine hours per lamp and allocates overhead at a rate of $1.80 per machine hour. Last year Chilton manufactured 23,000 lamps, used 13,800 machine hours and incurred actual overhead costs of $15,180. What was Chilton's variable manufacturing overhead rate variance last year?

The direct materials flexible budget variance can be divided into two variances-the

A favorable direct labor efficiency variance might indicate that

The direct labor rate variance describes differences in the anticipated (standard)labor rate and the actual labor rate paid.

The actual cost of direct materials is $50.25 per pound. The standard cost per pound is $56.00. During the current period, 6,800 pounds were used in production. The standard quantity for actual units produced is 6.500 pounds. How much is the direct materials price variance?

Piper Corporation, which manufactures dog toys, is developing direct labor standards. The basic direct labor rate is $12.00 per hour. Payroll taxes are 13% of the basic direct labor rate, while fringe benefits such as vacation and health care insurance, are $6.00 per hour. What is the standard rate per direct labor hour?

Price and quantity variances are a way to motivate employees.

A price variance for production inputs is the difference between the actual unit price of an input and the standard unit price of the input, multiplied by the actual input quantity.

Culinary Kitchen Supply produces bamboo cutting boards. The standard material cost for the bamboo used in each lamp is $18 per square foot. Each board requires 3 square feet of bamboo. In August, the company produced 1,200 cutting boards. There were 3,400 square feet of bamboo used during the month. The bamboo used had an actual cost $20 per square foot. What was the materials quantity variance in August for bamboo?

The variable overhead rate variance tells managers whether more or less was spent on variable overhead than they expected for the hours worked.

If a company produces many different products, it will develop a standard cost for each type of product.

The cause of a fixed overhead variance, such as an unanticipated increase or decrease in property taxes for the factory, is always under the control of management.

The ________ variance "measures whether the quantity of direct labor used to make the actual number of outputs is within the standard allowed for that number of outputs".

LampLight Industries gathered the following information for the month of July: Overhead flexible budget: LampLight actually produced 14,000 units in 17,500 machine hours. Total actual overhead cost of $85,500 consisted of $35,000 variable costs and $50,500 fixed costs. The standard variable and fixed overhead rates are based on a master (static)budget of 15,000 units. Assume the allocation base for fixed overhead costs is the number of units. A. Compute the total manufacturing overhead cost variance. B. Compute the overhead flexible budget variance. C. Compute the production volume variance.