Exam 14: Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Minmax Co.'s direct labor information for February is as follows: Direct labor hours worked (AQ) 33,600 Standard direct labor hours for units manufactured (SQ) 35,000 Unfavorable direct labor rate variance \ 11,760 Total payroll for direct labor \ 470,400 The direct labor efficiency variance in February (to the nearest dollar) was:

Sheldon Company manufactures only one product and uses a standard cost system. During the past month, manufacturing operations for the company had the following variances: direct labor rate variance = $30,000 favorable (F); direct labor efficiency variance = $50,000 unfavorable. Sheldon allows 5 standard direct labor hours per unit produced, and its standard direct labor hourly pay rate is $50. During the month, the company used 25% more direct labor hours than the standard allowed for the units produced. How many units of the product were produced during the past month (rounded to the nearest whole number)?

Lucky Company's direct labor information for the month of February is as follows: Actual direct labor hours worked (AQ) 61,500 Standard direct labor hours allowed (SQ) 63,000 Total payroll for direct labor \ 774,900 Direct labor efficiency variance \ 18,000 The total standard direct labor cost allowed for February, rounded to the nearest dollar, was:

Norio Manufacturing uses powdered plastics (PPS) to manufacture a high-pressure board used in a digital equipment product, Flex 10. Information concerning its operation in June is as follows:Assume that Norio does not maintain an inventory of materials, so that the amount of materials used is equal to the amount of materials purchased. The standard cost per pound of PPS (to two decimal places) is:

One important short-term financial goal for a company is to earn the projected operating income for the period. The overall extent to which this goal was achieved is measured by comparing the actual operating income for the period to the:

Machine Builders Inc. adopted a standard cost system several years ago that it uses in conjunction with its process cost system. The per-unit standard costs for direct materials and direct labor for its single product are as follows:The actual direct materials purchase price (AP) per kilogram in July (to two decimal places) was:

A company's master budget for October is to manufacture and sell 30,000 units, for a total sales revenue of $270,000, total variable costs of $180,000, and total fixed costs of $24,000. The company actually manufactured and sold 32,000 units, and generated $45,000 of operating income in October. The sales volume variance, in terms of operating income, for October (rounded to the nearest whole dollar) was:

Machine Builders Inc. adopted a standard cost system several years ago that it uses in conjunction with its process cost system. The per-unit standard costs for direct materials and direct labor for its single product are as follows:The actual total cost of direct materials used in production during July, to the nearest dollar, was:

Customer-response time (CRT) is usually defined as:

Which of the following is not considered a basic business process?

Ally Mfg. uses a standard cost system and its July production of 1,800 units involved actual direct labor costs of $242,000 for 5,500 hours worked (AQ). The budget for July called for production of 2,000 units with 6,000 direct labor hours at $40.00 per hour (SP). Ally's direct labor efficiency variance for July, to the nearest dollar, was:

The total operating income variance for a period reveals whether a company has achieved:

Precilla Company uses a standard costing system that allows 2.0 pounds of direct materials for one finished unit of product. During July, the company purchased 40,000 pounds of direct materials for $210,000, and manufactured 12,000 finished units. The standard direct materials cost allowed for the units manufactured is $120,000. The performance report shows that Precilla has an unfavorable direct materials usage variance of $5,000. Also, the company records any price variance for materials at time of purchase. Precilla's standard price per pound of direct materials (SP), to two decimal places, is:

Define what is meant by the term "just in time production" (JIT). As indicated in your text, management accountants can supply relevant information to management as it considers a move to JIT. In this regard, describe some of the principal advantages of using a JIT system, and then describe some of the incremental costs that would likely be associated with a move to such a system.

An organization's overall management accounting and control system:

James has the following information pertaining to its usage of direct labor in a recent period: Total direct labor hours worked (AQ) 30,000 Total units manufactured 8,000 Actual wage rate per hour (AP) \ 16 Standard cost data: Wage rate per hour (SP) \ 18 Standard hours per unit 4 Required: 1.Calculate the labor efficiency variance for the period. 2.Calculate the labor rate variance for the period. 3.Prepare, in proper form, the journal entry to record wage expense for the period, including any associated standard cost variances.

Rachael Hair Products shows the following budgeted and actual data for the first quarter of the current fiscal year: Required: ● What type of financial control system might the company use to determine whether the company met its short-term financial objectives? ● For the first quarter of the year, what was the total master (static) budget variance? ● In general, into what two component variances can the master (static) budget variance be decomposed? What is the meaning of each of these two variances? ● Comment specifically on the financial performance of this company during the 1st quarter. ● What are the primary limitations of traditional financial-control models?

The difference between the total actual sales revenue of a period and the total flexible-budget sales revenue for the units sold during the period is the:

Information concerning Johnston Co.'s direct materials costs is as follows:The actual purchase price per pound of direct materials (rounded to two decimal places) was:

Pokeman Bunch Inc., manufactures Poke Monster figures, and has the following data from its operation for the year just completed.The sales volume variance in terms of operating income is: