Exam 6: Performance Evaluation: Variance Analysis

Holly Industries manufactures artificial holiday wreaths.Its most popular wreath requires 3 yards of artificial pine boughs and 15 sprigs of holly berries.In August,the company purchased 4,000 yards of artificial pine bough,and 20,000 sprigs of holly berries.Holly paid $2.65 per yard for the artificial pine bough,and purchased 4 boxes of 5,000 sprigs of holly berries for $7,000 per box.The standard price for artificial pine bough is $2.60 per yard,and the standard price per sprig of holly berry is $1.45.During August,Holly produced 1,250 wreaths and used 3,625 yards of artificial pine bough and 19,000 sprigs of holly berries.What is Holly's direct materials price variance for sprigs of holly berries for August?

A rush order for overnight delivery of materials is likely to result in an

The variable overhead variance is separated into which of the following components?

The following standards for variable manufacturing overhead have been established for Windsor,Inc.a manufacturer of reproduction vintage hats. Standard hours per

Assembly line workers at Thompson Manufacturing worked a total of 9,300 direct labor hours to produce 36,000

A variance is the difference between actual results and budgeted,or expected results.

Variable overhead cost consists of indirect production costs that are expected to vary with production activity.How is the variable overhead spending variance calculated and list potential causes of the variance?

Assume R&N Manufacturing has always used a static budget approach to analyze variances,but the new controller has suggested that the company implement a flexible budget strategy. Required: Answer the following questions relating to flexible budget variances. a.What are the direct materials and direct labor variances that the controller will be analyzing? b.Give an example of what would cause each variance to be favorable. c.Give an example of what would cause each variance to be unfavorable. Unit 6-2,6-3,

When the budget being used is a static budget,the difference between actual results and budgeted results is referred to as a

Indirect materials are classified as manufacturing overhead.How might indirect materials generate an unfavorable usage variance that is not related to the efficient use of the variable overhead activity driver?

R&N Sports has budgeted $57,000 for fixed overhead for the period.This budget was based on the following items: depreciation of $24,000,rent of $4,000,executive salaries of $27,000 and other fixed costs of $2,000.Actual overhead incurred is $52,000.Production was budgeted at 8,000

Backyard Creations purchased 7,800 feet of copper tubing at a price of $2.30 per foot and used 7,500 feet during the period.The standard quantity allowed for the

Kevin Jarvis is the controller of Bitterroot Industries.Kevin prepared the following budgeted income statement at various levels of sales.After careful review of the budgeted income statements,and after discussions with the sales and production managers,the CEO determines that the best alternative is to base the budget on a sales volume of 30,000

Which of the following would be a feasible explanation for an unfavorable direct materials quantity variance?

If the actual price of direct materials is $10 per

All differences between the flexible budget and actual performance must result from operations,rather than from differences in sales volume.

Adler Industries uses a standard cost system in which direct material is carried at standard cost.Adler has established the following standards for one

A favorable variance is a variance that

Adler Industries uses a standard cost system in which direct material is carried at standard cost.Adler has established the following standards: standard quantity of 8 pounds per

The algebraic equation for the direct materials price variance is