For each of the following efficiency standards,indicate which parties are responsible for the standard and list one factor that should be used in setting the standard. \[\begin{array} { | l | l | l | } \hline \text { Efficiency standard } & \text { Responsible party } & \text { Factor used in setting the standard } \\ \hline \text { Direct materials } & & \\& & \\ \hline \text { Direct labor } & & \\ & & \\ \hline \end{array}\]

The answer of For each of the following efficiency standards,indicate...

Rees Manufacturing uses a standard cost system.Standards for direct materials are as follows: \[\begin{array} { | l | r | } \hline \text { Direct materials (pounds per unit of output) } & 3 \\ \hline \text { Cost per pound of direct materials } & \$ 6 \\ \hline \end{array}\] Actual purchases of direct materials for the current month are 10,000 pounds for $48,600.Planned and actual production for the month is 3,100 units.Rees has issued 10,000 pounds of direct materials to production.The journal entry to record this transaction is ________.

A) a debit to Work-in-Process Inventory for $45,198,a credit to Raw Materials Inventory for $55,800,and a debit to Direct Materials Efficiency Variance for $10,602 B) a debit to Work-in-Process Inventory for $45,198,a credit to Raw Materials Inventory for $60,000,and a debit to Direct Materials Efficiency Variance for $14,802 C) a debit to Work-in-Process Inventory for $55,800,a credit to Raw Materials Inventory for $60,000,and a debit to Direct Materials Efficiency Variance for $4,200 D) a debit to Work-in-Process Inventory for $60,000,a credit to Raw Materials Inventory for $48,600,and a credit to Direct Materials Efficiency Variance for $60,000 A) a debit to Work-in-Process Inventory for $45,198,a credit to Raw Materials Inventory for $55,800,and a debit to Direct Materials Efficiency Variance for $10,602 B) a debit to Work-in-Process Inventory for $45,198,a credit to Raw Materials Inventory for $60,000,and a debit to Direct Materials Efficiency Variance for $14,802 C) a debit to Work-in-Process Inventory for $55,800,a credit to Raw Materials Inventory for $60,000,and a debit to Direct Materials Efficiency Variance for $4,200 D) a debit to Work-in-Process Inventory for $60,000,a credit to Raw Materials Inventory for $48,600,and a credit to Direct Materials Efficiency Variance for $60,000

The management of Chung Fire Alarms has calculated the following variances: \[\begin{array} { | l | r | } \hline \text { Direct materials cost variance } & \$ 8,000 \mathrm { U } \\ \hline \text { Direct materials efficiency variance } & 40,000 \mathrm {~F} \\ \hline \text { Direct labor cost variance } & 15,000 \mathrm {~F} \\ \hline \text { Direct labor efficiency variance } & 13,500 \mathrm { U } \\ \hline \text { Total variable overhead variance } & 8,500 \mathrm {~F} \\ \hline \text { Total fixed overhead variance } & 3,500 \mathrm {~F} \\ \hline \end{array}\] What is the total direct labor variance of the company?

A) $15,000 F B) $12,000 F C) $28,500 F D) $1,500 F A) $15,000 F B) $12,000 F C) $28,500 F D) $1,500 F

For each of the following variances,state which manager is most likely to be responsible for the variance. \[\begin{array} { | l | l | } \hline \text { Variance } & \text { Responsible Manager } \\ \hline \text { Direct Materials Cost } & \\ \hline \text { Direct Labor Efficiency } & \\ \hline \text { Variable Overhead } & \\ \text { Efficiency } & \\ \hline \end{array}\]

\[\begin{array} { | l | l | } \hline \t

Exam 23: Flexible Budgets and Standard Cost Systems

A company is setting its direct materials and direct labor standards for its leading product.Direct material costs from the supplier are $9 per square foot,net of purchase discount.Freight-in amounts to $0.30 per square foot.Basic wages of the assembly line personnel are $19 per hour.Payroll taxes are approximately 23% of wages.How much is the direct labor cost standard per hour? (Round your answer to the nearest cent. )

(Multiple Choice)

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Question 61

Unfavorable variances are subtracted from each other to arrive at a favorable variance.

(True/False)

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Question 62

Which of the following is a reason companies use standard costs?

(Multiple Choice)

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Question 63

For each of the following efficiency standards,indicate which parties are responsible for the standard and list one factor that should be used in setting the standard. Efficiency standard Responsible party Factor used in setting the standard Direct materials Direct labor

(Essay)

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Question 64

On a standard cost income statement,the variances with debit balances are shown in parentheses because they are contra expenses and therefore decrease the expense Cost of Goods Sold.

(True/False)

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Question 65

Rees Manufacturing uses a standard cost system.Standards for direct materials are as follows: Direct materials (pounds per unit of output) 3 Cost per pound of direct materials \ 6 Actual purchases of direct materials for the current month are 10,000 pounds for $48,600.Planned and actual production for the month is 3,100 units.Rees has issued 10,000 pounds of direct materials to production.The journal entry to record this transaction is ________.

(Multiple Choice)

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Question 66

What does the fixed overhead volume variance measure?

(Essay)

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Question 67

The fixed overhead volume variance is a cost variance that explains why fixed overhead is overallocated or underallocated.

(True/False)

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Question 68

Western Outfitters projected sales of 79,000 units for the year at a unit sales price of $12.00.Actual sales for the year were 73,000 units at $14.00 per unit.Variable costs were budgeted at $4.00 per unit,and the actual variable cost was $5.00 per unit.Budgeted fixed costs totaled $375,000 while actual fixed costs amounted to $415,000.What is the flexible budget variance for operating income?

(Multiple Choice)

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Question 69

The following information relates to Bloomberg 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 Bloomberg allocates manufacturing overhead to production based on standard direct labor hours. Bloomberg 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 efficiency variance.(round the answer to the nearest dollar)

(Essay)

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Question 70

The management of Chung Fire Alarms has calculated the following variances: Direct materials cost variance \ 8,000 Direct materials efficiency variance 40,000 Direct labor cost variance 15,000 Direct labor efficiency variance 13,500 Total variable overhead variance 8,500 Total fixed overhead variance 3,500 What is the total direct labor variance of the company?

(Multiple Choice)

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Question 71

For each of the following variances,state which manager is most likely to be responsible for the variance. Variance Responsible Manager Direct Materials Cost Direct Labor Efficiency Variable Overhead Efficiency

(Essay)

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Question 72

The difference between cost variances and efficiency variances pertains to ________.

(Multiple Choice)

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Question 73

The Washington Fish Company completed the flexible budget analysis for the second quarter,which is given below. Which of the following statements would be a correct analysis of the sales volume variance for operating income?

(Multiple Choice)

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Question 74

The following information relates to Leonard 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 Leonard allocates manufacturing overhead to production based on standard direct labor hours. Leonard 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 fixed overhead cost variance.

(Essay)

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Question 75

A cost variance measures the difference in quantities of actual inputs used and the standard quantity of inputs allowed for the actual number of units produced.

(True/False)

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Question 76

Which of the following is not a flexible budget variance?

(Multiple Choice)

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Question 77

The static budget,at the beginning of the month,for Assembly Furniture Company follows: Static budget: Sales volume: 1,100 units; Sales price: $\$ 71.00$ per unit Variable costs: $\$ 33.00$ per unit; Fixed costs: $\$ 36,400$ per month Operating income: $\$ 5,400$ Actual results, at the end of the month, follows: Actual results: Sales volume: 980 units; Sales price: $\$ 75.00$ per unit Variable costs: $\$ 36.00$ per unit; Fixed costs: $\$ 33,500$ per month Operating income: $\$ 4,720$ Calculate the sales volume variance for fixed costs.

(Multiple Choice)

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Question 78

Cheapo Sales Company uses a standard cost system.Overhead costs are allocated based on direct labor hours.In the first quarter,Cheapo Sales had a favorable efficiency variance for variable overhead costs.Which of the following scenarios is a reasonable explanation for this variance?

(Multiple Choice)

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Question 79

What does a favorable direct materials cost variance indicate?

(Multiple Choice)

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Question 80

Showing 61 - 80 of 204

Unfavorable variances are subtracted from each other to arrive at a favorable variance.

Which of the following is a reason companies use standard costs?

For each of the following efficiency standards,indicate which parties are responsible for the standard and list one factor that should be used in setting the standard. Efficiency standard Responsible party Factor used in setting the standard Direct materials Direct labor

On a standard cost income statement,the variances with debit balances are shown in parentheses because they are contra expenses and therefore decrease the expense Cost of Goods Sold.

What does the fixed overhead volume variance measure?

The fixed overhead volume variance is a cost variance that explains why fixed overhead is overallocated or underallocated.

For each of the following variances,state which manager is most likely to be responsible for the variance. Variance Responsible Manager Direct Materials Cost Direct Labor Efficiency Variable Overhead Efficiency

The difference between cost variances and efficiency variances pertains to ________.

The Washington Fish Company completed the flexible budget analysis for the second quarter,which is given below. Which of the following statements would be a correct analysis of the sales volume variance for operating income?

A cost variance measures the difference in quantities of actual inputs used and the standard quantity of inputs allowed for the actual number of units produced.

Which of the following is not a flexible budget variance?

Cheapo Sales Company uses a standard cost system.Overhead costs are allocated based on direct labor hours.In the first quarter,Cheapo Sales had a favorable efficiency variance for variable overhead costs.Which of the following scenarios is a reasonable explanation for this variance?

What does a favorable direct materials cost variance indicate?

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