Exam 13: Management Accounting for Cost Control and Performance Evaluation Flexible Budgets and Variance Analysis

Meow Products Ltd. Meow Products Ltd. in the US produces and sells scratching posts for cats. In the current year, the company had expected to sell 12 000 posts but actually produced and sold 10 000 posts. The following information is available regarding the standard cost to produce a single post: Direct materials: 3 feet @1.75 per foot Direct labour: 15 minutes @\ .30 per minute In the current year, 38 000 feet of material were purchased out of which 35 000 feet were used at a cost of $1.55 per foot, and 160 000 direct labour minutes were incurred at a cost of $.32 per minute. -The company's direct labour efficiency variance for the current year was:

Paw-Paw Products Paw-Paw Products produces and sells flannel covered dogbeds. In the current year, Paw-Paw had expected to sell 8000 beds but actually produced and sold 8500 beds. The following information is available regarding the standard cost to produc In the current year, 44 000 metres of material were purchased and used at a cost of $1.60 per metre and 365 500 direct labour minutes were incurred at a cost of $.23 per minute. -The company's direct labour efficiency variance for the current year was:

JAX Inc. In early 2009, US company JAX Inc. had budgeted for the production and sales of 6000 units at a sales price of $20 per unit. The following information is available regarding the standard cost for each unit: Number of units produced and sold: 6800 units Sales revenue: \ 149600(\ 22 per unit) Direct materials cost: \ 43384(14960 lbs purchased and used at \ 2.90 per lb) Direct labour cost: \ 59024(210800 minutes at \ .28 per minute ) -What was JAX Inc.'s direct labour rate variance for 2009?

Variance analysis compares:

Managers who properly apply the concept called 'management by exception' will:

Gemma Products produces and sells a variety of domestic goods including sheets.In the current year,the company budgeted for the production and sale of 10 000 sets;however,12 000 sets were actually produced and sold.Each set has a standard requiring 10 metres of material at a cost of $1.10 per metre and 20 minutes of direct labour (for sewing,assembly,and inspection)at a cost of $.20 per minute.Actual costs for the production of 12 000 sets were $138 240 for materials (128 000 metres purchased and used @ $1.08 per metre)and $55 200 for labour (230 000 minutes @ $.24 per minute). Required: Compute each of the following variances.Indicate whether the variance is favourable (F)or unfavourable (U). A. Direct materials price variance B. Direct materials usage variance Direct labour rate variance D. Direct labour efficiency variance

A budget for a single unit of a product or service is called a:

For purposes of the calculation for the direct materials price variance,when the quantity of materials purchased and used are different,which quantity of materials is relevant?

The variable overhead efficiency variance:

The type of budget that budgets standard costs for the actual volume of production is a:

What is 'task analysis' and how is it used in the context of variance analysis?

Washington Inc.has an unfavourable fixed overhead spending variance.Which of the following would be the most likely reason for this variance?

Differences in sales revenue between the flexible budget and actual results can be attributable to:

Which of the following variances is generally not reported as being favourable or unfavourable?

Peterson Inc.uses direct labour hours as the cost driver for variable overhead.In order to calculate the variable overhead spending variance,which of the following items does not need to be known?

Carlton Corporation Carlton Corporation produces and sells faux-leather handbags. In the current year, the company budgeted for the production and sale of 1000 handbags; however, 900 handbags were actually produced and sold. Each bag has a standard requiring 2 metres of material at a cost of $4.00 per metre and 1 hour of assembly time at a cost of $9.50 per hour. Actual costs for the production of 900 bags were $7215 for materials (1850 metres purchased and used @ $3.90 per metre) and $10 125 for labour (1125 hours @ $9.00 per hour). -Carlton's direct labour rate variance is:

Moreland Manufacturing Inc. US-based Moreland Manufacturing Inc. produces and sells stainless steel faucets. In the current year, the company had budgeted for the production and sale of 6000 faucets but, due to unexpected demand, 7000 faucets were actually produced and sold. Each faucet has a standard requiring 15 ounces of direct material at a cost of $.40 per ounce and 15 minutes of assembly time at a cost of $.20 per minute. Actual costs for the production of 7000 faucets were $41 359.50 for materials (106 050 ounces purchased and used @ $.39 per ounce) and $21 560 for labour (98 000 minutes @ $.22 per minute). -Moreland's direct materials usage variance is:

Which of the following types of companies would not have a need to calculate a fixed overhead volume variance?

Paw-Paw Products Paw-Paw Products produces and sells flannel covered dogbeds. In the current year, Paw-Paw had expected to sell 8000 beds but actually produced and sold 8500 beds. The following information is available regarding the standard cost to produc In the current year, 44 000 metres of material were purchased and used at a cost of $1.60 per metre and 365 500 direct labour minutes were incurred at a cost of $.23 per minute. -The company's direct material price variance for the current year was:

The fixed overhead volume variance is calculated by taking the difference between: