Exam 11: Standard Costs and Variances

Perfection standards do not allow for any poor quality raw materials, waste in the production process, machine-breakdown, or other inefficiencies.

The Berwin Company established a master budget volume of 35,000 units for April. Actual overhead costs incurred amounted to $98,500. Actual production for the month was 34,000 units. The standard variable overhead rate was $1.75 per direct labor hour. The standard fixed overhead rate was $1.50 per direct labor hour. One direct labor hour is the standard quantity per finished unit. Assume the allocation base for fixed overhead costs is the number of direct labor hours. A. Compute the total manufacturing overhead cost variance. B. Compute the overhead flexible budget variance. C. Compute the production volume variance.

All of the following are advantages of using standard costs except

The ________ department would most likely be responsible for a "direct labor rate variance."

The standard variable overhead cost rate for Harris Manufacturing is $24 per unit. Budgeted fixed overhead cost is 42,000. Harris Manufacturing budgeted 3,800 units for the current period and actually produced 3,900 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.

Active Lifestyle Beverages gathered the following information for Job #928: What is the direct materials price variance?

The direct materials price variance is calculated as

Which of the following shows the effect on work in process inventory when assigning direct labor costs to the production process?

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

Sole Purpose manufactures beach shoes that use a canvas as the main raw material. Data related to the shoes for June follows: What is the materials quantity variance for canvas for June?

Network Enterprises incurred actual fixed manufacturing overhead costs of $22,800 for the month of September. If the fixed manufacturing overhead budget variance was a favorable $6,700 what were the budgeted fixed overhead costs?

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 standard price for bleach?

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 rate variance?

Up-to-date standard costs provide a benchmark by which to evaluate actual costs and operations.

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

If the standard quantity allowed for direct labor is less than the actual quantity used, the efficiency variance is favorable.

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 total variable manufacturing overhead variance for October?

How is the fixed overhead volume variance calculated?

The ________ department would most likely be responsible for a "direct labor efficiency variance."

A company receives an unusually high number of orders in a month. To produce all of the orders within the scheduled dates of delivery, the company pays employees an extra $8 per hour for every hour of overtime the employees work. Which variance would be directly impacted?