Exam 7: Flexible Budgets, Direct-Cost Variances, and Management Control

Answer the following questions using the information below: Sawyer Industries, Inc. (SII), developed standard costs for direct material and direct labor. In 2011, SII estimated the following standard costs for one of their major products, the 30-gallon heavy-duty plastic container. During July, SII produced and sold 5,000 containers using 1,100 pounds of direct materials at an average cost per pound of $24 and 525 direct manufacturing labor hours at an average wage of $14.75 per hour. -July's direct manufacturing labor flexible-budget variance is:

Answer the following questions using the information below: JJ Abrams planned to use $164 of material per unit but actually used $160 of material per unit, and planned to make 1,200 units but actually made 1,000 units. -The flexible-budget amount is:

The textbook discusses three levels of variances, Level 0, Level 1, Level 2, and Level 3. Briefly explain the meaning of each of those levels and provide an example of a variance at each of those levels.

Give at least three good reasons why a favorable price variance for direct materials might be reported.

One of the primary reasons for using cost variances is:

An unfavorable variance:

When actual input data from past periods is used to develop a budget:

Answer the following questions using the information below: Apple Valley Orchards, Inc. (AVO), developed standard costs for direct material and direct labor. In 2011, AVO estimated the following standard costs for one of their most well loved products, the AVO classic Grandma's large apple pie which had a brown sugar coating on the top of the crust as well as including cranberry and mince ingredients in addition to the apples. During September, AVO produced and sold 1,200 pies using 1,875 pounds of direct materials at an average cost per pound of $7.00 and 280 direct labor hours at an average wage of $14.25 per hour. -September's direct material price variance is:

Answer the following questions using the information below: Diana Industries, Inc. (DII), developed standard costs for direct material and direct labor. In 2010, DII estimated the following standard costs for one of their major products, the 10-gallon plastic container. During June, DII produced and sold 10,000 containers using 980 pounds of direct materials at an average cost per pound of $32 and 500 direct manufacturing labor-hours at an average wage of $15.25 per hour. -June's direct material flexible-budget variance is:

Answer the following questions using the information below: JJ Abrams planned to use $164 of material per unit but actually used $160 of material per unit, and planned to make 1,200 units but actually made 1,000 units. -The sales-volume variance is:

An unfavorable flexible-budget variance for variable costs may be the result of:

An unfavorable variance indicates that:

The following items are the same for the flexible budget and the master budget EXCEPT for:

Answer the following questions using the information below: Sawyer Industries, Inc. (SII), developed standard costs for direct material and direct labor. In 2011, SII estimated the following standard costs for one of their major products, the 30-gallon heavy-duty plastic container. During July, SII produced and sold 5,000 containers using 1,100 pounds of direct materials at an average cost per pound of $24 and 525 direct manufacturing labor hours at an average wage of $14.75 per hour. -July's direct material efficiency variance is:

The following data for the telephone company pertain to the production of 450 rolls of telephone wire during June. Selected items are omitted because the costing records were lost in a windstorm. Required: Compute the missing elements in the report represented by the lettered items.

Madzinga's Draperies manufactures curtains. A certain window requires the following: During the second quarter, the company made 1,500 curtains and used 14,000 square yards of fabric costing $68,600. Direct labor totaled 7,600 hours for $79,800. Required: a. Compute the direct materials price and efficiency variances for the quarter. b. Compute the direct manufacturing labor price and efficiency variances for the quarter.

A single variance:

Answer the following questions using the information below: Sawyer Industries, Inc. (SII), developed standard costs for direct material and direct labor. In 2011, SII estimated the following standard costs for one of their major products, the 30-gallon heavy-duty plastic container. During July, SII produced and sold 5,000 containers using 1,100 pounds of direct materials at an average cost per pound of $24 and 525 direct manufacturing labor hours at an average wage of $14.75 per hour. -July's direct manufacturing labor price variance is:

Answer the following questions using the information below: Apple Valley Orchards, Inc. (AVO), developed standard costs for direct material and direct labor. In 2011, AVO estimated the following standard costs for one of their most well loved products, the AVO classic Grandma's large apple pie which had a brown sugar coating on the top of the crust as well as including cranberry and mince ingredients in addition to the apples. During September, AVO produced and sold 1,200 pies using 1,875 pounds of direct materials at an average cost per pound of $7.00 and 280 direct labor hours at an average wage of $14.25 per hour. -September's direct material flexible-budget variance is:

Answer the following questions using the information below: Bowden Corporation used the following data to evaluate their current operating system. The company sells items for $20 each and used a budgeted selling price of $20 per unit. -What is the static-budget variance of revenues?