Exam 10: Standard Costs and Variances

Grub Chemical Corporation has developed cost standards for the production of its new cologne, ChocO. The variable cost standards below relate to each 10 gallon batch of ChocO: Variable manufacturing overhead at Grub is applied based on direct labor-hours. The actual results for last month were as follows: -What is ChocO's materials (milk chocolate)quantity variance?

The standard cost card for one unit of a finished product shows the following: If the total standard variable cost for one unit of finished product is $78,then the standard price per foot for direct materials is:

Kartman Corporation makes a product with the following standard costs: In June the company's budgeted production was 3,400 units but the actual production was 3,500 units. The company used 22,150 pounds of the direct material and 2,290 direct labor-hours to produce this output. During the month, the company purchased 25,400 pounds of the direct material at a cost of $170,180. The actual direct labor cost was $57,021 and the actual variable overhead cost was $8,931. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. -The labor efficiency variance for June is:

Miguez Corporation makes a product with the following standard costs: The company budgeted for production of 2,600 units in September, but actual production was 2,500 units. The company used 5,440 liters of direct material and 1,680 direct labor-hours to produce this output. The company purchased 5,800 liters of the direct material at $7.20 per liter. The actual direct labor rate was $24.10 per hour and the actual variable overhead rate was $1.90 per hour. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. -The variable overhead rate variance for September is:

Thyne Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. -The standard amount of materials allowed for the actual output is closest to:

Termeer Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. The company has reported the following actual results for the product for August: -The variable overhead efficiency variance for the month is closest to:

The following labor standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: -The labor efficiency variance for the month was:

The Bowden Corporation makes a single product. Only one kind of direct material is used to make this product. The company uses a standard cost system. The company's cost records for June show the following data: There were no beginning inventories of direct materials. -The standard cost of direct material for one unit of output is:

Mcphail Inc.has a standard cost system.The standards for direct materials for one of its products specify 6.6 grams of a particular input per unit of output at a standard cost of $7.40 per gram.The company has reported the following actual results for the product for September: Required: a.Compute the materials price variance for this input for September. b.Compute the materials quantity variance for this input for September.

If variable manufacturing overhead is applied on the basis of direct labor-hours and the variable overhead rate variance is favorable,then:

Waste on the production line will result in an unfavorable materials price variance.

The variable overhead efficiency variance does not actually measure how efficiently variable manufacturing overhead resources were used.

Doogan Corporation makes a product with the following standard costs: The company produced 5,200 units in January using 39,310 grams of direct material and 2,380 direct labor-hours. During the month, the company purchased 44,400 grams of the direct material at $1.70 per gram. The actual direct labor rate was $19.30 per hour and the actual variable overhead rate was $6.80 per hour. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. -The labor efficiency variance for January is:

Zanny Electronics Corporation uses a standard cost system for the production of its water ski radios.The direct labor standard for each radio is 0.9 hours.The standard direct labor cost per hour is $7.20. During the month of August,Zanny's water ski radio production used 6,600 direct labor-hours at a total direct labor cost of $48,708.This resulted in production of 6,900 water ski radios for August.What is Zanny's labor rate variance for August?

Saxena Corporation makes a product that has the following direct labor standards: The company budgeted for production of 2,900 units in July, but actual production was 2,800 units. The company used 250 direct labor-hours to produce this output. The actual direct labor rate was $14.10 per hour. -The labor rate variance for July is:

Descamps Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. The company has reported the following actual results for the product for July: -The variable overhead rate variance for the month is closest to:

The standard labor rate per hour should not include any employment taxes.

If demand is insufficient to keep everyone busy and workers are not laid off,an unfavorable (U)variable overhead efficiency variance often will be a result unless managers build excessive inventories.

Bumgardner Inc. has provided the following data concerning one of the products in its standard cost system. The company has reported the following actual results for the product for April: -The raw materials quantity variance for the month is closest to:

Pippin Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. The company has reported the following actual results for the product for June: -The variable overhead efficiency variance for the month is closest to: