Exam 10: Standard Costs and Overhead Analysis

(Appendix 10C)If two products are good substitutes,the sales quantity variance for each product can be analyzed further into a market volume variance and a market share variance.

What was the total variable overhead variance for November?

(Appendix 10A)Pictou Company uses two raw materials,X and Y,in the manufacture of its only product: Gizmo.Both materials are very close substitutes.The standard proportions for the manufacture of a unit of Gizmo are 6 units of X and 4 units of Y.The unit standard prices of X and Y are $16 and $20,respectively.During the month of August,the company used 3,000 units of X and 1,800 units of Y to produce 460 units of Gizmo. Required: a)Calculate the following variances for raw materials X and Y: (i)Quantity variances. (ii)Mix variances. (iii)Yield variances b)Suppose you are made aware that the assistant production manager recommended the departure from the standard mix.Should the assistant manager be commended? Explain

Last month,75,000 kilograms of direct materials were purchased,and 71,000 kilograms were used.If the actual purchase price per kilogram was $0.50 more than the standard purchase price per kilogram,what was the materials price variance?

The production manager is usually held responsible for the labour efficiency variance.

The following labour standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: Required: a)What was the labour rate variance for the month? b)What was the labour efficiency variance for the month?

One cause of an unfavourable overhead volume variance would be increase in cost for fixed overhead items.

If the denominator activity (in hours)used to compute the predetermined overhead rate is equal to the actual activity (in hours)for the period,then there is no volume variance.

A favourable materials price variance coupled with an unfavourable materials quantity variance would MOST likely result from which of the following?

The following materials standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: What was the materials price variance for the month?

What was the labour rate variance for the month?

What was the labour rate variance?

(Appendix 10B)To record the incurrence of direct labour costs and its use in production,the general ledger would include what entry to the Labour Efficiency Variance account?

(Appendix 10A)For raw material B,what were the mix and yield variances,respectively?

Waste or excessive usage of overhead items will show up as part of the variable overhead efficiency variance.

Hart Company's labour standards call for 500 direct labour hours to produce 250 units of product.During October,the company worked 625 direct labour hours and produced 300 units.What were the standard hours allowed for October?

What was the fixed overhead budget variance for May?

(Appendix 10C)What were the sales mix variances for Model X and Model Y,respectively,for last year?

At the end of the variance analysis cycle,management should be able to identify possible causes for both favourable and unfavourable variances.

(Appendix 10C)Iraj Company retails two grades of Persian carpets: Grade X and Grade Y.The carpets are sold by rolls.The following is a summary of the company's activities for last year: Required: a)Assume the two grades of carpet are close substitutes.Calculate the sales volume variance for each grade of carpet and analyze each into a sales mix variance and a sales quantity variance. b)Analyze the sum of the sales quantity variance into its two components: market volume variance and market share variance. c)Comment on the appropriateness of the assumption of close substitution between the two grades of carpet.Comment also on the effect,if any,on the analysis in part a)above if this assumption is considered inappropriate.