Exam 10: Standard Costs and Overhead Analysis

Raff Co. has a standard cost system in which manufacturing overhead is applied to units of product on the basis of direct labour hours (DLHs). The following standards are based on 100,000 direct labour hours: Variable Overhead 2 DLHs @ \3 per DLH =\ 6 per unit Fixed Overhead 2 DLHs @ \4 per DLH =\ 8 per unit The following information pertains operations during March: Units Actually Produced 38,000 Actual Direct Labour Hours Worked 80,000 Actual Manufacturing Overhead Incurred: Variable Overhead \ 250,000 Fixed Overhead \ 384,000 -For March,what was the variable overhead spending variance?

The Albright Company uses standard costing and has established the following standards $f$ its single product: Direct Materials 2 litres at \3 per litre Direct Labour 0.5 hours at \8 per hour Variable Manufacturing Overhead 0.5 hours at \2 per hour During November, the company made 4,000 units and incurred the following costs: Direct Materials Purchased 8,100 litres at \ 3.10 per litre Direct Materials Used 7,600 litres Direct Labour Used 2,200 hours at \ 8.25 per hour Actual Variable Manufacturing Overhead \ 4,175 The company applies variable manufacturing overhead to products on the basis of direct labour hours. -What was the labour efficiency variance for November?

The following materials standards have been established for a particular product: Standard quantity per unit of output 8.3 grams Standard price \ 19.15 per gram The following data pertain to operations concerning the product for the last month: Actual materials purchased 7,500 grams Actual cost of materials purchased \ 141,375 Actual materials used in production 7,100 grams Actual output 700 units What was the materials price variance for the month?

An outdoor barbecue grill manufacturer has a standard costing system based on machine hours (MHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: Denominator Level of Activity 4,600 Fixed Overhead Cost \ 50,140 The following data pertain to operations for the most recent period: Actual Hours 5,000 Standard Hours Allowed for the Actual Output 4,743 Actual Total Fixed Overhead Cost \ 48,960 -What was the fixed overhead budget variance for the period,rounded to the nearest dollar?

A manufacturer of industrial equipment has a standard costing system based on direct labour hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: Denominator Level of Activity 9,000 Overhead Costs at the Denominator Activity Level: Variable Overhead Cost \ 90,700 Fixed Overhead Cost \ 102,800 $\text { The following data pertain to operations for the most recent period: }$ Actual Hours 7,800 Standard Hours Allowed for the Actual Output 7,765 Actual Total Variable Overhead Cost \ 54,210 Actual Total Fixed Overhead Cost \ 100,200 -What was the total predetermined overhead rate,rounded to the nearest cent?

The Alpha Company produces toys for national distribution. Standards for a particular toy are: Materials: 12 grams per unit at 56?per gram. Labour: 2 hours per unit at $2.75 per hour. During the month of December, the company produced 1,000 units. Information for the month follows: Materials: 14,000 grams were purchased and used at a total cost of $7,140. Labour: 2,500 hours worked at a total cost of $8,000. -What was the materials price variance?

The Upton Company employs a standard costing system in which variable overhead is assigned to production on the basis of direct labour hours. Data for the month of February include the following: Variable manufacturing overhead cost incurred \ 48,700 Total variable overhead variance \ 300 favourable Standard hours allowed for actual production 7,000 Actual direct labour hours worked 6,840 -What is the standard variable overhead rate per direct labour hour?

A manufacturing company has a standard costing system based on machine hours (MHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: Denominator Level of Activity 6,100 Overhead Costs at the Denominator Activity Level: Variable Overhead Cost \ 35,075 Fixed Overhead Cost \ 77,775 The following data pertain to operations for the most recent period: Actual Hours 6,300 Standard Hours Allowed for the Actual Output 5,994 Actual Total Variable Overhead Cost \ 36,540 Actual Total Fixed Overhead Cost \ 76,875 -What was the fixed overhead volume variance for the period,rounded to the nearest dollar?

The standard direct labour rate should NOT include fringe benefits.

The Clark Company makes a single product and uses standard costing. Some data concerning this product for the month of May follow: Labour rate variance \ 7,000 favourable Labour efficiency variance \ 12,000 favourable Variable overhead efficiency variance \ 4,000 favourable Number of units produced 10,000 Standard labour rate per direct labour hour \ 12 Standard variable overhead rate per direct labour hour \ 4 Actual labour hours used 14,000 Actual variable manufacturing overhead costs \ 58,290 -What are the standard hours allowed to make one unit of finished product?

Dahl Company,a clothing manufacturer,uses a standard costing system.Each unit of a finished product contains 2 metres of cloth.However,there is unavoidable waste of 20%,calculated on input quantities,when the cloth is cut for assembly.The cost of the cloth is $3 per metre.What is the standard direct material cost for cloth per unit of finished product?

If two products are close substitutes,the sales volume variance for each product can be split into a sales quantity variance and a sales mix variance.

In a standard costing system,under- or overapplied fixed overhead is equal to the sum of the fixed overhead budget variance and the fixed overhead volume variance.

A labour efficiency variance resulting from the use of poor quality materials should be charged to which/whom?

The Baby Clothing Company makes and sells a single product, called a New bodysuit and employs a standard costing system. The following standards have been established for one unit of New bodysuit: Standard Quantity or Hours Standard Cost per New bodysuit Direct Materials 5 board metre \ 8.00 Direct Labour 0.7 hours \ 8.40 There were no inventories of any kind on August 1. During August, the following events occurred: Purchased 14,000 board metres at the total cost of $\$ 22,000$ . Used 10,300 board metres to produce 2,100 New bodysuits. Used 1,400 hours of direct labour time at a total cost of $\$ 18,060$ . - To record the use of direct materials in production,the general ledger would include what entry to the Materials Quantity Variance account?

The Dexon Company makes and sells a single product, called a Mip, and employs a standard costing system. The following standards have been established for one unit of Mip: Standard Quantity or Hours Standard Cost per Mip Direct Materials 6 board metre \ 9.00 Direct Labour 0.8 hours \ 9.60 There were no inventories of any kind on August 1. During August, the following events occurred: Purchased 15,000 board metres at the total cost of $\$ 24,000$ . Used 12,000 board metres to produce 2,100 Mips. Used 1,700 hours of direct labour time at a total cost of $\$ 20,060$ . - To record the use of direct materials in production,the general ledger would include what entry to the Materials Quantity Variance account?

Drake Company purchased materials on account.The entry to record the purchase of materials having a standard cost of $1.50 per kilogram from a supplier at $1.60 per kilogram would include which of the following?

The Reedy Company uses a standard costing system.The following data are available for November: Actual direct labour hours worked 5,800 Standard direct labour rate \ 9 per hour Labour rate variance \ 1,160 favourable What was the actual direct labour rate for November?

The Dexon Company makes and sells a single product, called a Mip, and employs a standard costing system. The following standards have been established for one unit of Mip: Standard Quantity or Hours Standard Cost per Mip Direct Materials 6 board metre \ 9.00 Direct Labour 0.8 hours \ 9.60 There were no inventories of any kind on August 1. During August, the following events occurred: Purchased 15,000 board metres at the total cost of $\$ 24,000$ . Used 12,000 board metres to produce 2,100 Mips. Used 1,700 hours of direct labour time at a total cost of $\$ 20,060$ . - To record the incurrence of direct labour cost and its use in production,the general ledger would include what entry to the Labour Rate Variance account?

The Albright Company uses standard costing and has established the following standards $f$ its single product: Direct Materials 2 litres at \3 per litre Direct Labour 0.5 hours at \8 per hour Variable Manufacturing Overhead 0.5 hours at \2 per hour During November, the company made 4,000 units and incurred the following costs: Direct Materials Purchased 8,100 litres at \ 3.10 per litre Direct Materials Used 7,600 litres Direct Labour Used 2,200 hours at \ 8.25 per hour Actual Variable Manufacturing Overhead \ 4,175 The company applies variable manufacturing overhead to products on the basis of direct labour hours. -What was the labour rate variance for November?