Exam 11: Standard Costs and Variances

It is possible to encounter a situation where the direct labor rate variance is favorable and the direct labor efficiency variance is unfavorable.

Razzle Baking Company gathered the following actual results for the current month: Budgeted production and standard costs were: What is the direct materials quantity variance?

A credit balance means that a variance is unfavorable since it decreases income (just like a revenue).

A company receives an unusually high number of orders in a month.To produce all of the orders within the scheduled dates of delivery,the company pays employees an extra $8 per hour for every hour of overtime the employees work.Which of the following variances may be directly impacted?

Enter the letters of the items needed to compute that variance on the line in front of each variance.You can enter more than one item on each line as applicable. A.Standard overhead allocated to production B.Flexible budget overhead for actual number of outputs C.Actual variable overhead cost D.Fixed overhead costs ________ Manufacturing overhead (MOH)flexible budget variance ________ Production volume variance

A debit balance in the direct materials price variance indicates the standard cost of materials was less than the actual cost of materials.

If production remains within the relevant range for the period,fixed costs are expected to remain fixed.

If a company recognizes variances at the earliest point possible,raw materials inventory will be debited for the Actual Quantity (AQ)of raw materials purchased and costed at the Actual Price (AP)paid per unit.

When auto manufacturer BMW purchased the Rolls-Royce brand name,BMW had to hire and train a new staff of assembly workers.The new workers were paid $25 per hour,worked a total of 7,500 hours,and produced 2,000 cars.BMW budgeted for a standard labor rate of $27 per hour and 1.25 direct labor hours per car.What is the direct labor rate variance for the Rolls-Royce division?

Managers will want to use management by exception to determine which variances are significant enough to warrant investigation.

Which of the following statements may be true if actual units produced exceed the budgeted units to be produced?

Farrar Industries reported the following results from its most recent quarter: What is Farrar's direct material quantity variance?

The Perry Corporation recorded the following budgeted and actual information relating to fixed overhead costs for its Z-Line of products: What is Perry's fixed manufacturing overhead budget variance?

Which variance is directly impacted if the employees who build the product go on strike and temporary workers who are slower and not as skilled are hired?

Happy Helpers Maid Service is calculating its standard direct labor rate.The direct labor rate is $12 per hour.Happy Helpers incurs payroll tax expense of 15% of the direct labor rate and incurs costs for sick-days and vacation days of $3 per hour.What is the standard rate per direct labor hour?

Tommy's Toys produces two types of toys: trains and dolls.Tommy's uses stainless steel to manufacture the trains and plastic to manufacture the dolls.Information regarding the usage of steel and plastic for the past year follows: What is the price variance for steel used to manufacture the trains?

The variable overhead efficiency variance tells management how efficiently manufacturing overhead was used during the period.

The direct labor variance can be divided into two variances

Theresa Corporation,which manufactures baskets,is developing direct labor standards.The basic direct labor rate is $23.00 per hour.Payroll taxes are 10% of the basic direct labor rate,while fringe benefits such as vacation and health care insurance,are $8.00 per hour.What is the standard rate per direct labor hour?

Which term below is best paired with "The difference between the actual overhead cost incurred and the flexible budget amount of overhead cost for actual number of output"?