Exam 6: Performance Evaluation: Variance Analysis

The direct labor efficiency variance is that part of the direct labor flexible budget variance that is caused by using more or less direct labor than the standard allows.

The variable overhead spending variance has to do with the efficient use of

Which of the following employees is typically held accountable for the direct material quantity variance?

An unfavorable spending variance may be caused by using variable overhead items inefficiently.

Actual direct labor costs may differ from the flexible budget amounts because

The following labor standards have been set for a product: The following data pertain to operations for the period. Required Calculate the direct labor rate and efficiency variances and indicate whether the variances are favorable or unfavorable.

Amos,Inc.uses a standard cost system in which direct material is carried at standard cost.Standards for one

Johnston Manufacturing Company purchased 14,000 switches to make 6,000

Sterling Industries manufactures saddles for show horses.Sterling's actual fixed overhead for the year was $123,400.During the year Sterling produced 12,300 saddles using 129,150 direct labor hours.Sterling had budgeted to produce 13,000 saddles and had budgeted to use 130,000 direct labor hours.Sterling's fixed overhead spending variance was $4,200 favorable for the year.What was Sterling's budgeted fixed overhead for the year if necessary,round your answer to the nearest dollar?

The variable overhead spending variance

If the actual price of direct materials purchased is $200 per

Since a flexible budget is based on actual sales volume,it cannot be prepared until after the end of the period.

In June,Indigo Manufacturing purchased 6,000 gallons of blue dye used to produce stone-washed denim clothing.The price per gallon was $1.24 and the company used 5,400 gallons of the dye during the month to produce 42,660 yards of denim fabric.The standard allows for 8 yards of fabric per gallon of dye.The standard price for the dye is $1.26.What is the materials quantity variance for Indigo for June?

Which of the following is not an explanation for a favorable variable overhead spending variance?

Your friend has accepted a position with a large manufacturing company as production manager.She has found out that she must analyze and report any variances that relate to production.She has been told that managers use a method called "management by exception" and is concerned that any variance will be viewed negatively by her supervisors. Required: Explain to your friend the concept of "management by exception" and put her mind at ease about all variances being viewed as negative and explain what factors may be considered when deciding what variances to investigate.

If a company incurs a lot of different variable overhead costs and the activity base is only slightly related to their consumption,which of the following statements is true?

The algebraic equation for the direct materials quantity variance is

Luckett Company's standards call for two feet of direct material for each

Jasmine Manufacturing produces the glass vases used by florists.Each vase requires 15 minutes of direct labor time for which glass blowers are paid $30 per hour.During November,Jasmine produced 10,000 glass vases which required 2,550 hours of direct labor.Jasmine paid wages to the glass blowers of $74,500 during November.What is Jasmine's direct labor rate variance for November?

Backyard Creations purchased 7,000 feet of copper tubing at a price of $2.70 per foot and used 7,200 feet during the period.The standard quantity allowed for the