Exam 9: Flexible Budgets Standard Costs and Variance Analysis

Mirabito 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 December: Required: a.Compute the materials price variance for December. b.Compute the materials quantity variance for December. c.Compute the labor rate variance for December. d.Compute the labor efficiency variance for December. e.Compute the variable overhead rate variance for December. f.Compute the variable overhead efficiency variance for December.

Galeazzi Corporation makes a product with the following standard costs: In October the company produced 3,000 units using 8,380 pounds of the direct material and 2,610 direct labor-hours.During the month, the company purchased 9,500 pounds of the direct material at a total cost of $55,100.The actual direct labor cost for the month was $48,546 and the actual variable overhead cost was $16,965.The company applies variable overhead on the basis of direct labor-hours.The direct materials purchases variance is computed when the materials are purchased. Required: a.Compute the materials quantity variance. b.Compute the materials price variance. c.Compute the labor efficiency variance. d.Compute the labor rate variance. e.Compute the variable overhead efficiency variance. f.Compute the variable overhead rate variance.

The variable overhead efficiency variance for July is:

The variable overhead rate variance for indirect labor is closest to:

The variable overhead efficiency variance for February is:

The net operating income in the planning budget for December would be closest to:

Sakelaris Corporation makes a product with the following standard costs: The company reported the following results concerning this product in August. The company applies variable overhead on the basis of direct labor-hours.The direct materials purchases variance is computed when the materials are purchased. Required: a.Compute the materials quantity variance. b.Compute the materials price variance. c.Compute the labor efficiency variance. d.Compute the labor rate variance. e.Compute the variable overhead efficiency variance. f.Compute the variable overhead rate variance.

Creger Corporation, which makes landing gears, has provided the following data for a recent month: Required: Determine the rate and efficiency variances for the variable overhead item supplies and indicate whether those variables are favorable or unfavorable.Show your work!

The occupancy expenses in the flexible budget for June would be closest to:

Aultz Tile Installation Corporation measures its activity in terms of square feet of tile installed.Last month, the budgeted level of activity was 1,180 square feet and the actual level of activity was 1,270 square feet.The company's owner budgets for supply costs, a variable cost, at $3.50 per square foot.The actual supply cost last month was $4,980.What would have been the spending variance for supply costs?

The variable overhead efficiency variance for November is:

The materials quantity variance for February is:

Mansour Memorial Diner is a charity supported by donations that provides free meals to the homeless.The diner's budget for February was based on 3,000 meals, but the diner actually served 3,400 meals.The diner's director has provided the following cost formulas to use in budgets: Required: Prepare the diner's flexible budget for the actual number of meals served in February.The budget will only contain the costs listed above; no revenues will be on the budget.

The total expenses in the flexible budget for January would have been closest to:

The materials quantity variance for January is:

The standard cost of direct material for one unit of output is:

Sincell Corporation uses customers served as its measure of activity.During April, the company budgeted for 22,000 customers, but actually served 24,000 customers.The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $4.10q Wages and salaries: $26,000 + $1.10q Supplies: $0.70q Insurance: $7,100 Miscellaneous expense: $3,400 + $0.30q The company reported the following actual results for April: Required: Prepare a report showing the company's revenue and spending variances for April.Label each variance as favorable (F)or unfavorable (U).

Thorman Corporation is a service company that measures its output by the number of customers served.The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for August. When the company prepared its planning budget at the beginning of August, it assumed that 35 customers would have been served.However, 39 customers were actually served during August. Required: Prepare a report showing the company's revenue and spending variances for August.Indicate in each case whether the variance is favorable (F)or unfavorable (U).

The direct labor in the planning budget for May would be closest to:

The labor efficiency variance for September is: