Exam 21: Flexible Budgets and Standard Costs

Use the following data to find the direct labor rate variance if the company produced 7,000 units of product during the period.

Standard costs can be used by management to assess the reasonableness of actual costs incurred.

A volume variance is the difference between overhead at maximum volume of production and the standard volume of production.

The following information describes production activities of the Midtown Corp.: 30,000 units were completed during the year Budgeted standards for each unit produced: 1/2 lb.of raw material at $4.15 per lb. 10 minutes of direct labor at $12.50 per hour Compute the direct materials price and quantity and the direct labor rate and efficiency variances.Indicate whether each variance is favorable or unfavorable.

An overhead cost variance is the difference between the total overhead actually incurred for the period and the standard overhead applied to products.

The process of closing ending variance account balances increases Cost of Goods Sold.

Fletcher Company collected the following data regarding production of one of its products. -Compute the total direct materials cost variance.

A company uses the following standard costs to produce a single unit of output. During the latest month,the company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output.Direct labor costs for the month totaled $56,350 based on 4,900 direct labor hours worked.Variable manufacturing overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was $10,400. -Based on this information,the direct materials quantity variance for the month was:

A job was budgeted to require 3 hours of labor per unit at $11.00 per hour.The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $269,500.What is the total labor cost variance?

The total sales variance can be divided into the sales price variance and the sales volume variance.

A favorable variance for a cost means that when compared to the budget,the actual cost is ________ than the budgeted cost.

Clevenger Co.planned to produce and sell 30,000 units with a selling price of $10 per unit.Variable costs are expected to be $4 per unit and fixed costs are expected to be $80,000.Clevenger actually produced and sold 37,000 units. Using a contribution margin format: Prepare a flexible budget income statement for the actual level of sales and production.

A company's flexible budget for 60,000 units of production showed sales of $96,000,variable costs of $36,000,and fixed costs of $26,000.What operating income would be expected if the company produces and sells 70,000 units?

A company's flexible budget for 48,000 units of production showed variable overhead costs of $72,000 and fixed overhead costs of $64,000.The company incurred overhead costs of $122,800 while operating at a volume of 40,000 units.The total controllable cost variance is:

Fletcher Company collected the following data regarding production of one of its products. -Compute the direct materials quantity variance.

The anticipated costs incurred under normal conditions to produce a specific product or to perform a specific service are:

When using a standard cost accounting system,how are unfavorable variances recorded? How are favorable variances recorded?

Hassock Corp.produces woven wall hangings.It takes 2 hours of direct labor to produce a single wall hanging.Hassock's standard labor cost is $12 per hour.During August,Hassock produced 10,000 units and used 21,040 hours of direct labor at a total cost of $250,376.What is Hassock's labor rate variance for August?

Based on a predicted level of production and sales of 22,000 units,a company anticipates total variable costs of $99,000,fixed costs of $30,000,and operating income of $36,000.Based on this information,the budgeted amount of contribution margin for 20,000 units would be:

A fixed budget is also called a ________ budget.