Exam 23: Flexible Budgets and Standard Costs

Jacques Company planned to use 18,000 pounds of material costing $2.50 per pound to make 4,000 units of its product.In actually making 4,000 units,the company used 18,800 pounds that cost $2.54 per pound.Calculate the direct materials quantity variance.

A company uses the following standard costs to produce a single unit of output. Direct materals 6 pourds at \ 0.90 per pound = \ 5.40 Direct labor 0.5 hour at \ 12.00 per hour = \ 6.00 Marufacturing overhead 0.5 hour at \ 4.80 per hour = \ 2.40 During the latest month,the company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output.Direct labor costs for the month totaled $56,350 based on 4,900 direct labor hours worked.Variable manufacturing overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was $10,400.Based on this information,the direct materials price variance for the month was:

In preparing flexible budgets,the costs that remain constant in total are _______________ costs.Those costs that change in total are _______________ costs.

A budget performance report that includes variances can have variances caused by both price differences and quantity differences.

The following information describes a company's usage of direct labor in a recent period.The direct labor rate variance is:

Based on a predicted level of production and sales of 12,000 units,a company anticipates reporting operating income of $26,000 after deducting variable costs of $72,000 and fixed costs of $10,000. Based on this information,the budgeted amounts of fixed and variable costs for 15,000 units would be:

Price Company's flexible budget shows $10,710 of overhead at 75% of capacity,which was the operating level achieved during May.However,the company applied overhead to production during May at a rate of $2.00 per direct labor hour based on a budgeted operating level of 6,120 direct labor hours (90% of capacity).If overhead actually incurred was $11,183 during May,the controllable variance for the month was:

Bartels Corp.produces woodcarvings.It takes 2 hours of direct labor to produce a carving.Bartels' standard labor cost is $12 per hour.During August,Bartels produced 10,000 carvings and used 21,040 hours of direct labor at a total cost of $250,376.What is Bartels' labor rate variance for August?

Use the following data to find the direct labor cost variance. Direct labor standard (4 hrs. @ \7 hr) \ 28 per urit Actual hours worked per urit 3.5 hours Actual urits produced 3,500 urits Actual rate per hour \ 7.50

In the analysis of variances,management commonly focuses on four categories of production costs: __________________ cost,___________________ cost; _____________ cost; and _________________ cost.

Brewer Company specializes in selling used cars.During the month,the dealership sold 22 cars at an average price of $15,000 each.The budget for the month was to sell 20 cars at an average price of $16,000.Compute the dealership's sales volume variance for the month.

A flexible budget performance report compares the differences between:

Overhead cost variance is:

An internal report that helps management analyze the difference between actual performance and budgeted performance based on the actual sales volume (or other level of activity),and which presents the differences between actual and budgeted amounts as variances,is called a(n):

The following company information is available for January.The direct materials price variance is:

Quantity variances for direct cost categories (direct materials and direct labor)are based on differences between the actual inputs used and the standard inputs allowed for the actual output achieved.A key difference in the analysis of quantity variances for direct cost categories and the analysis of the efficiency variance for variable overhead is:

Job #305 was budgeted to require 3.5 hours of labor at $11.00 per hour.However,it was completed in 3 hours by a person who worked for $14.00 per hour.What is the total labor cost variance for Job #305?

Fixed budget performance reports compare actual results with the expected amounts in the fixed budget.

When standard costs are used,factory overhead is assigned to products with a predetermined standard overhead rate.

A company's flexible budget for 36,000 units of production showed variable overhead costs of $54,000 and fixed overhead costs of $50,000.The company actually incurred total overhead costs of $95,300 while operating at a volume of 32,000 units.What is the controllable variance?