Exam 23: Flexible Budgets and Standard Cost Systems

The difference between the actual allocation base (actual quantity)and the amount of the allocation base that should have been used (standard quantity)times the standard cost is called the ________.

In a standard cost system,the manufacturing overhead allocated to production equals the standard overhead allocation rate multiplied by the standard quantity of the allocation base allowed for expected output.

Apogee Fashions uses standard costs for their manufacturing division.The allocation base for overhead costs is direct labor hours.From the following data,calculate the fixed overhead allocated to production based on direct labor hours (DLHr). Actual fixed overhead \ 38,000 Budgeted fixed overhead \ 24,000 Standard overhead allocation rate \ 9 Standard direct labor hours per unit 4 DLHr Actual output 2200 units

When recording direct materials purchased,what does an unfavorable direct materials cost variance represent? Will this variance have a debit or credit balance?

Which of the following is the correct formula for measuring a cost variance?

The following information relates to Thomas Manufacturing's overhead costs for the month: Static budget variable overhead \ 14,200 Static budget fixed overhead \ 5,600 Static budget direct labor hours 1,000 hours Static budget number of units 5,000 units Thomas allocates manufacturing overhead to production based on standard direct labor hours. Thomas reported the following actual results for last month: actual variable overhead,$14,500; actual fixed overhead,$5,400; actual production of 4,700 units at 0.22 direct labor hours per unit.The standard direct labor time is 0.20 direct labor hours per unit. Compute the fixed overhead volume variance.

Which of the following is NOT a flexible budget variance?

The efficiency variance measures ________.

Lewis Manufacturing uses a standard cost system.The direct labor cost standard is $18.00 per direct labor hour.The direct labor efficiency standard is 0.5 direct labor hour per unit.Actual direct labor for the month is 1,200 hours for a total cost of $24,000.Production for the month is 3,000 units.Give the journal entry to record direct labor (not paid).Omit explanation.

A standard cost system is an accounting system that uses standards for product costs.

Midnight Sun Outfitters projected sales of 76,000 units for the year at a unit sales price of $12.00.Actual sales for the year were 72,000 units at $15.00 per unit.Variable costs were budgeted at $4.50 per unit,and the actual variable cost was $4.75 per unit.Budgeted fixed costs totaled $378,000,while actual fixed costs amounted to $410,000.What is the sales volume variance for operating income?

The management technique whereby managers concentrate on results that are outside the accepted parameters is called management by ________.

The sum of the cost variances and efficiency variances equals ________.

Unfavorable variances are subtracted from each other to arrive at a favorable variance.

On a standard cost income statement,the variances with debit balances are shown in parentheses because they are contra expenses and therefore decrease the expense Cost of Goods Sold.

Which of the following amounts of a flexible budget changes,within the specified relevant range,with changes in sales volume?

When a manufacturing company uses a standard cost system,an unfavorable variance is a contra expense.

Marlin Manufacturing uses a standard cost system.Data on standard costs and actual costs are as follows: Direct materials: Standard Actual Direct materials units per unit of output 2.0 3.3 Cost per unit of direct materials \ 5.00 \ 4.80 Direct materials cost per unit \ 10.00 \ 16.00 Number of units 3,000 3,000 Direct materials cost \ 30,000 \ 48,000 Direct labor: Standard Actual Hours per unit 0.5 0.4 Cost per hour \ 18.00 \ 20.00 Labor cost per unit \ 9.00 \ 8.00 Number of units 3,000 3,000 Direct labor cost \ 27,000 \ 24,000 Variable overhead* Standard Actual Hours per unit 0.5 0.4 Cost per hour \ 30.00 \ 29.00 Variable overhead cost per unit \ 15.00 \ 11.60 Number of units 3,000 3,000 Variable overhead cost \ 45.000 \ 34.800 *allocated based on direct labor hours Fixed overhead* Standard Actual Hours per unit 0.5 0.4 Cost per hour \ 10.00 \ 9.00 Fixed overhead cost per unit \ 5.00 \ 3.60 Number of units 3,000 3,000 Fixed overhead cost \ 15,000 \ 10,800 *allocated on the basis of direct labor hours Give the journal entry to transfer the cost of units from Work-in-Process Inventory to Finished Goods Inventory.Omit explanation.

Which of the following will result in an unfavorable direct materials efficiency variance?

When using management by exception,the purchasing manager should be questioned for which of the following variances?