The management of Alpha Lawnmowers has calculated the following variances: \[\begin{array} { | l | r | } \hline \text { Direct materials cost variance } & \$ 8,000 \mathrm { U } \\ \hline \text { Direct materials efficiency variance } & 40,000 \mathrm {~F} \\ \hline \text { Direct labor cost variance } & 17,000 \mathrm {~F} \\ \hline \text { Direct labor efficiency variance } & 13,000 \mathrm { U } \\ \hline \text { Variable overhead cost variance } & 3,000 \mathrm {~F} \\ \hline \text { Variable overhead efficiency variance } & 5,500 \mathrm {~F} \\ \hline \text { Fixed overhead cost variance } & 4,000 \mathrm {~F} \\ \hline \end{array}\] What is the total variable overhead variance of the company?

A) $2,500 F B) $12,500 F C) $8,500 F D) $4,000 F A) $2,500 F B) $12,500 F C) $8,500 F D) $4,000 F C

The management of Zeta Fire Alarms has calculated the following variances: \[\begin{array} { | l | r | } \hline \text { Direct materials cost variance } & \$ 9,000 \mathrm { U } \\ \hline \text { Direct materials efficiency variance } & 36,000 \mathrm {~F} \\ \hline \text { Direct labor cost variance } & 15,000 \mathrm {~F} \\ \hline \text { Direct labor efficiency variance } & 13,500 \mathrm { U } \\ \hline \text { Total variable overhead variance } & 8,500 \mathrm {~F} \\ \hline \text { Total fixed overhead variance } & 3,000 \mathrm {~F} \\ \hline \end{array}\] What is the total direct materials variance of the company?

A) $1,500 F B) $27,000 F C) $11,500 F D) $6,000 F A) $1,500 F B) $27,000 F C) $11,500 F D) $6,000 F

Zenith Fashions uses standard costs for their manufacturing division.From the following data,calculate the fixed overhead cost variance. \[\begin{array} { | l | l | } \hline \text { Actual fixed overhead } & \$ 32,000 \\ \hline \text { Budgeted fixed overhead } & \$ 24,000 \\ \hline \text { Standard overhead allocation rate } & \$ 8 \\ \hline \text { Standard direct labor hours per unit } & 3 \text { DLHr } \\ \hline \text { Actual output } & 2,500 \text { units } \\ \hline \end{array}\]

A) $36,000 F B) $36,000 U C) $8,000 F D) $8,000 U A) $36,000 F B) $36,000 U C) $8,000 F D) $8,000 U

Exam 23: Flexible Budgets and Standard Cost Systems

The management of Alpha Lawnmowers has calculated the following variances: Direct materials cost variance \ 8,000 Direct materials efficiency variance 40,000 Direct labor cost variance 17,000 Direct labor efficiency variance 13,000 Variable overhead cost variance 3,000 Variable overhead efficiency variance 5,500 Fixed overhead cost variance 4,000 What is the total variable overhead variance of the company?

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Question 1

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The following information relates to Regency 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 Regency allocates manufacturing overhead to production based on standard direct labor hours. Regency 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 variable overhead cost variance.(Round the answer to the nearest dollar. )

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Question 2

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$\begin{aligned}\text { Variable overhead cost variance } & = \text { Actual VOH } - \left( 5 \mathrm { C } ^ {* } \times \mathrm { AQ } ^ { ** } \right) \\& = \$ 14,500 - ( \$ 14,20 \times 1,034 \mathrm { DLHr } ) \\& = \$ 183 \mathrm { U }\end{aligned}$

*Standard VOH allocation rate: Budgeted VOH / Budgeted allocation base $\$ 14,200 / 1,000 = \$ 14.20$ per DL Hr ** 4,700 units produced × 0.22 actual direct labor hours per unit =1,034 DLHr

When investigating overhead variances,management needs to determine whether cost increases were controllable or if the cost standard needs to be updated.

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Question 3

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The direct materials cost and efficiency variances make up the total direct materials variance.

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Question 4

Mountain Sports Equipment Company projected sales of 81,000 units at a unit sales price of $14 for the year.Actual sales for the year were 75,000 units at $13.00 per unit.Variable costs were budgeted at $2 per unit,and the actual amount was $4 per unit.Budgeted fixed costs totaled $375,000,while actual fixed costs amounted to $425,000.What is the sales volume variance for total revenue?

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Question 5

The fixed overhead cost variance measures the difference between actual fixed overhead and allocated fixed overhead.

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Question 6

What does the fixed overhead cost variance measure?

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Question 7

City Golf Center reported actual operating income for the current year as $65,000.The flexible budget operating income for actual volume is $58,000,while the static budget operating income is $59,000.What is the flexible budget variance for operating income?

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Question 8

The management of Zeta Fire Alarms has calculated the following variances: Direct materials cost variance \ 9,000 Direct materials efficiency variance 36,000 Direct labor cost variance 15,000 Direct labor efficiency variance 13,500 Total variable overhead variance 8,500 Total fixed overhead variance 3,000 What is the total direct materials variance of the company?

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Question 9

A favorable direct materials cost variance occurs when the actual direct materials cost incurred is greater than the standard direct materials cost.

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Question 10

Which of the following is the correct formula for measuring the efficiency variance?

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Question 11

The sales volume variance is the difference between the expected results in the flexible budget for the actual units sold and the static budget.

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Question 12

A company's production department was experiencing a high defect rate on the assembly line,which was slowing down production and causing wastage of valuable direct materials.The production manager decided to recruit some highly skilled production workers from another company to bring down the defect rate but was worried that the higher wages of these workers might negatively affect operating income.This would produce a(n)________.

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Question 13

A manufacturer,using a standard cost system,purchased 250 units of direct materials at a cost of $2 per unit.The standard cost per unit of direct materials is $1.85.Prepare the journal entry to record the direct materials cost variance at the time of purchase.

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Question 14

The flexible budget variance is the difference between the actual results and the expected results in the flexible budget for the actual units sold.

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Question 15

SeaKist Marine Stores Company manufactures decorative fittings for luxury yachts,which require highly skilled labor,and special metallic materials.SeaKist uses standard costs to prepare its flexible budget.For the first quarter of 2016,direct materials and direct labor standards for one of their popular products were as follows: Direct materials: 1.5 pounds per unit; $4 per pound Labor: 2 hours per unit; $18 per hour During the first quarter,SeaKist produced 5,000 units of this product.At the end of the quarter,an examination of the direct materials records revealed that the company used 7,000 pounds of direct materials.The direct materials efficiency variance was $2,000 F.Which of the following is a logical explanation for this variance?

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Question 16

A favorable direct materials cost variance occurs when the actual direct materials cost incurred is less than the standard direct materials cost.

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Question 17

The static budget is used to compute flexible budget variances as well as cost and efficiency variances for direct materials and direct labor.

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Question 18

Pierce Marine Stores Company manufactures special metallic materials and decorative fittings for luxury yachts that require highly skilled labor.Pierce uses standard costs to prepare its flexible budget.For the first quarter of the year,direct materials and direct labor standards for one of their popular products were as follows: Direct materials: 3 pounds per unit; $4 per pound Direct labor: 5 hours per unit; $16 per hour Pierce produced 5,000 units during the quarter.At the end of the quarter,an examination of the labor costs records showed that the company used 30,000 direct labor hours and actual total direct labor costs were $372,000.What is the direct labor efficiency variance?

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Question 19

Zenith Fashions uses standard costs for their manufacturing division.From the following data,calculate the fixed overhead cost variance. Actual fixed overhead \ 32,000 Budgeted fixed overhead \ 24,000 Standard overhead allocation rate \ 8 Standard direct labor hours per unit 3 DLHr Actual output 2,500 units

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Question 20

Showing 1 - 20 of 204

When investigating overhead variances,management needs to determine whether cost increases were controllable or if the cost standard needs to be updated.

The direct materials cost and efficiency variances make up the total direct materials variance.

The fixed overhead cost variance measures the difference between actual fixed overhead and allocated fixed overhead.

What does the fixed overhead cost variance measure?

City Golf Center reported actual operating income for the current year as $65,000.The flexible budget operating income for actual volume is $58,000,while the static budget operating income is $59,000.What is the flexible budget variance for operating income?

A favorable direct materials cost variance occurs when the actual direct materials cost incurred is greater than the standard direct materials cost.

Which of the following is the correct formula for measuring the efficiency variance?

The sales volume variance is the difference between the expected results in the flexible budget for the actual units sold and the static budget.

A manufacturer,using a standard cost system,purchased 250 units of direct materials at a cost of $2 per unit.The standard cost per unit of direct materials is $1.85.Prepare the journal entry to record the direct materials cost variance at the time of purchase.

The flexible budget variance is the difference between the actual results and the expected results in the flexible budget for the actual units sold.

A favorable direct materials cost variance occurs when the actual direct materials cost incurred is less than the standard direct materials cost.

The static budget is used to compute flexible budget variances as well as cost and efficiency variances for direct materials and direct labor.

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