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

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.

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 x $12.00 per kilogram)= $60.00/unit.Direct labor (3.5 hours x $20.00 per hour)= $70.00/unit.All materials were issued at the beginning of processing.The operating data shown below were taken from the records for December: The direct labor efficiency variance for December is:

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

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: materials: 4 kilograms/unit x $10.00 per kilogram = $40.00/unit;labor: 4 hours/unit x $18.00 per hour = $72.00/unit.All materials are issued at the beginning of processing.The operating data shown below were taken from the records for July: The direct materials usage variance for July was:

What four variances may be included as a component of the total variable cost flexible-budget variance for a given period?

The total variable cost flexible-budget variance for any given period:

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 is fixed costs.The flexible budget for September showed total sales of $300,000.Among variances of 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 budgeted fixed cost is:

A standard cost system:

Precilla Company uses a standard costing system that allows 2 pounds of direct materials for one finished unit.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 Pricilla has an unfavorable direct materials usage variance of $5,000.Also,the company records any price variance for materials at time of purchase. The direct materials purchase-price variance in July is:

Information concerning Johnston Co.'s direct materials costs was as follows: The direct materials usage variance is:

Chapter 14 introduces you to the concept of operational control systems.Within the context of this discussion,certain limitations of financial control systems were presented.Provide a summary of the primary limitations of short-term financial performance indicators,such as the variances discussed in the main part of the chapter.

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 x $12.00 per kilogram)= $60.00/unit.Direct labor (3.5 hours x $20.00 per hour)= $70.00/unit.All materials were issued at the beginning of processing.The operating data shown below were taken from the records for December: The direct labor rate variance for December is:

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

Roncy Manufacturing uses enhanced powder plastics (EPP)to manufacture high-pressure boards,Dura-Plastic.Information concerning its operation in June was as follows: The direct materials purchase-price variance is for June was:

An organization subject to intense competitive pressures would most likely use:

Joe Malay received the following report on the Division's operation for the month of August: Direct labor rate variance = $25,000 unfavorable.Direct labor efficiency variance = $70,000 (?)The standard calls for 3 direct labor hours per unit of output at $28 per labor hour.The standard direct labor hours for the units manufactured is 20 percent more than the total direct labor hours actually worked in August.What was the average direct labor hourly rate the Division paid in August?

Balmer Corporation's master budget for the year is presented below: