Exam 7: Standard Costing and Variance Analysis

Buckingham Company Buckingham Company uses a standard cost system for its production process and applies overhead based on direct labor hours.The following information is available for May when Buckingham produced 4,500 units:

Standard:
DLH per unit	2.50
Variable overhead per DLH	$1.75
Fixed overhead per DLH	$3.10
Budgeted variable overhead	$21,875
Budgeted fixed overhead	$38,750

Actual:
Direct labor hours	10,000
Variable overhead	$26,250
Fixed overhead	$38,000

Refer to Buckingham Company.Using the one-variance approach,what is the total overhead variance?

The difference between standard quantity allowed and quantity used for a unit of output is known as an ______________________________.

Pearce Company Pearce Company uses a standard cost system for its production process.Pearce Company applies overhead based on direct labor hours.The following information is available for July:

Standard:
DLH per unit	2.20
Variable overhead per DLH	$2.50
Fixed overhead per DLH
Budgeted variable overhead	$3.00
(based on 11,990 DLHs)

Actual:
Units produced	4,400
Direct labor hours	8,800
Variable overhead	$29,950
Fixed overhead	$42,300

Refer to Pearce Company Using the one-variance approach,what is the total variance?

Expected standards tend to yield unfavorable variances.

A conversion variance combines labor and overhead variances.

A purpose of standard costing is to

The formula for price/rate variance is (AP - SP)´ SQ.

Unfavorable variances are represented by debit balances in the overhead account.

Buckingham Company Buckingham Company uses a standard cost system for its production process and applies overhead based on direct labor hours.The following information is available for May when Buckingham produced 4,500 units:

Standard:
DLH per unit	2.50
Variable overhead per DLH	$1.75
Fixed overhead per DLH	$3.10
Budgeted variable overhead	$21,875
Budgeted fixed overhead	$38,750

Actual:
Direct labor hours	10,000
Variable overhead	$26,250
Fixed overhead	$38,000

Refer to Buckingham Company.Using the two-variance approach,what is the controllable variance?

Garfield Company Garfield Company applies overhead based on direct labor hours and has the following available for the current month: Standard: Direct labor hous per unit                                                  5 Variable overhead per DLH                                            $\$ 7.5$ Fixed overhead per DLH $\text { (based on 8,900 DLHs) }$                                      $\$ 1.90$ Actual: Units prochuced                                                              1,800 Direct labor hours                                                           8,900 Variable overhead                                                         $6,400 Fixed overheacl                                                            $17,500 Refer to Garfield Company.Compute all the appropriate variances using the two-variance approac

Aldrich Company Aldrich Company has the following information available for the current year: Standard: Material           $3.5$ feet per unit @ $\$ 2.60$ per foot Labor                5 direct labor hours@ $\$ 8.50$ per unit Actual: Material               95,625 feet used(100,000 feet purchased @ $\$ 2.50$ per foot Labor                    122,400 chrect labor hours incurred @ $\$ 8.35$ per hour                               25,500 units were produced. Refer to Aldrich Company.Compute the labor rate and efficiency variances.

Total actual overhead minus total budgeted overhead at the actual input production level equals the

In a totally automated organization,using theoretical capacity will generally provide the lowest fixed overhead application rate.

Harrah Manufacturing Company uses a standard cost system and prepared the following budget at normal capacity for October: Directlabor hours                                  24,000 Variable $\mathrm{OH}$                                           $\$ 48,000$ Fixed $\mathrm{OH}$                                                  $\$ 108,000$ Total $\mathrm{OH}$ per $\mathrm{DLH}$                                    $\$ 6.50$ Actual data for October were as follows: Directlabor hours worked                            22,000 Total $\mathrm{OH}$                                                   $\$ 147,000$ StandardDLHs allowed for capacity attained             21,000 Using the two-way analysis of overhead variances,what is the controllable variance for October?

Why are fixed overhead variances considered noncontrollable?

The two components of total material/labor variance are ______________________________ and ___________________________________

A budget variance is a controllable variance.

At the end of a period,a significant material quantity variance should be

An overhead efficiency variance is related entirely to variable overhead.

Standards that are attainable with reasonable effort are referred to as ___________________________________.