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

The effect on sales, expenses, or operating income of changes in units sold is measured by the:

A firm uses a Just-in-Time (JIT) inventory system and has an unfavorable selling price variance for the period just ended. If the proportion of the total variable manufacturing costs to total sales in both the flexible budget and the actual operating results is 70%:

Differences in expectation levels lead to two basic types of standards in a standard cost system:

Shade Company adopted a standard cost system several years ago. The standard costs for direct labor and direct materials for its single product are as follows: Materials (5 kilograms × $12.00/kilogram) = $60.00/unit; direct labor (3.5 hours/unit × $20.00/hour) = $70.00/unit. All materials are issued at the beginning of processing. The operating data shown below were taken from the records for December:The actual total cost of direct materials used in production during December (to the nearest dollar) was:

For a direct material, which one of the following is defined as the difference between the actual and standard unit price of the direct material multiplied by the actual quantity of the material purchased?

Which of the following is not a plausible cause of a direct labor efficiency variance?

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 direct labor rate variance for February (rounded to the nearest dollar) was:

For improved financial control, a standard cost system should be designed to generate and report cost and revenue variances:

Explain the calculation and interpretation of a sales price variance for any given period. How does this variance relate to the total flexible-budget variance for the period?

The difference between the actual sales volume for a period and the flexible-budget sales volume is equal to:

Chen Company uses a standard cost system. As such, all its inventories are carried on the books at standard, not actual, cost. During the most recent accounting period, the company had the following summary transactions: 1. Purchased, on credit, direct materials; the standard cost of these materials was $30,000, while the actual cost was $32,000. 2. Issued to production direct materials. The standard cost of materials that should have been used for this period's output was $35,000, while the standard cost of materials used in production during the period was $33,000. 3. Actual direct labor cost, which has been incurred but not yet paid, for the period was $75,000. The standard direct labor cost for this period's output was $80,000. The direct labor efficiency variance for the period was $10,000(F). 4. For the units completed during the period, the standard direct labor cost was $78,000, while the standard direct materials cost was $34,000. 5. For the units sold during the period, the standard materials cost was $30,000, while the standard direct labor cost was $76,000. Required: Given the above information, provide the correct journal entries for the following: 1. Purchase of direct materials 2. Issuance of materials to production. 3. Direct labor cost for the period. 4. The labor and materials cost associated with finished production this period. 5. The labor and materials cost associated with items sold during the period.

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 sales volume variance, measured in terms of direct labor cost, for July (to the nearest dollar) was:

A "currently attainable standard" emphasizes or reflects:

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; 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. What was the actual hourly rate (AP) for direct labor, rounded to two decimal places?

Shade Company adopted a standard cost system several years ago. The standard costs for direct labor and direct materials for its single product are as follows: Materials (5 kilograms × $12.00/kilogram) = $60.00/unit; direct labor (3.5 hours/unit × $20.00/hour) = $70.00/unit. All materials are issued at the beginning of processing. The operating data shown below were taken from the records for December: The direct materials usage variance for December, to the nearest dollar, was:

In September, Larson Inc. sold 40,000 units of its only product for $240,000, and incurred a total cost of $225,000, of which $25,000 was fixed costs. The flexible budget for September showed total sales of $300,000. Among variances for the period were: total variable cost flexible-budget variance, $8,000U; total flexible-budget variance, $63,000U; and, sales volume variance, in terms of contribution margin, $27,000U. The master budget operating income for September, to the nearest dollar, was:

Pokeman Bunch Inc., manufactures Poke Monster figures, and has the following data from its operation for the year just completed.The amount E is:

Matinna Co. maintains no inventories and has the following data pertaining to one of its direct materials in July: Standard quantity of direct materials for the units manufactured (SQ) 30,000 Direct materials purchases-actual cost \ 63,000 Standard price per unit of direct materials (SP) \ 2.00 Direct material efficiency variance-favorable \ 4,500 All materials purchased during the month were issued to production. What was the direct materials price variance for July, rounded to the nearest dollar?

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 direct labor flexible-budget variance for February (rounded to the nearest dollar) was:

The difference between actual and standard cost caused by the difference between the actual number of resource-units used and the standard number of resource-units that should have been used for the output of the period is called the: