Atlace Manufacturing uses a standard cost system.Standards for direct materials are as follows: \[\begin{array} { | l | r | } \hline \text { Direct materials (pounds per unit of output) } & 3 \\ \hline \text { Cost per pound of direct materials } & \$ 4 \\ \hline \end{array}\] The company plans to produce 3,000 units and has purchased 12,000 pounds of direct materials at a net cost of $43,200.What is the journal entry to record this transaction?

A) \[\begin{array} { | l | r | r | } \hline \text { Raw Materials Inventory } ( 12,000 \text { pounds } \times \$ 4 / \text { pound } ) & 48,000 & \\ \hline \text { Direct Materials Cost Variance } & & 4,800 \\ \hline \text { Accounts Payable } ( 12,000 \text { pounds } \times \$ 3.60 / \text { pound } ) & & 43,200 \\ \hline \end{array}\] B) \[\begin{array} { | l | r | r | } \hline \text { Raw Materials Inventory } ( 12,000 \text { pounds } \times \$ 4 / \text { pound } ) & 48,000 & \\ \hline \text { Direct Materials Cost Variance } & 4,800 & \\ \hline \text { Accounts Payable } ( 12,000 \text { pounds } \times \$ 3.60 / \text { pound } ) & & 43,200 \\ \hline \end{array}\] C) \[\begin{array} { | l | r | r | } \hline \text { Raw Materials Inventory } ( 12,000 \text { pounds } \times \$ 3.60 / \text { pound } ) & 43,200 & \\ \hline \text { Direct Materials Cost Variance } & 4,800 & \\ \hline \text { Accounts Payable } ( 12,000 \text { pounds } \times \$ 4 / \text { pound } ) & & 48,000 \\ \hline \end{array}\] D) \[\begin{array} { | l | r | r | } \hline \text { Raw Materials Inventory } ( 12,000 \text { pounds } \times \$ 3.60 / \text { pound } ) & 43,200 & \\ \hline \text { Direct Materials Cost Variance } & & 4,800 \\ \hline \text { Accounts Payable } ( 12,000 \text { pounds } \times \$ 4 / \text { pound) } & & 48,000 \\ \hline \end{array}\] A) \[\begin{array} { | l | r | r | } \hline \text { Raw Materials Inventory } ( 12,000 \text { pounds } \times \$ 4 / \text { pound } ) & 48,000 & \\ \hline \text { Direct Materials Cost Variance } & & 4,800 \\ \hline \text { Accounts Payable } ( 12,000 \text { pounds } \times \$ 3.60 / \text { pound } ) & & 43,200 \\ \hline \end{array}\] B) \[\begin{array} { | l | r | r | } \hline \text { Raw Materials Inventory } ( 12,000 \text { pounds } \times \$ 4 / \text { pound } ) & 48,000 & \\ \hline \text { Direct Materials Cost Variance } & 4,800 & \\ \hline \text { Accounts Payable } ( 12,000 \text { pounds } \times \$ 3.60 / \text { pound } ) & & 43,200 \\ \hline \end{array}\] C) \[\begin{array} { | l | r | r | } \hline \text { Raw Materials Inventory } ( 12,000 \text { pounds } \times \$ 3.60 / \text { pound } ) & 43,200 & \\ \hline \text { Direct Materials Cost Variance } & 4,800 & \\ \hline \text { Accounts Payable } ( 12,000 \text { pounds } \times \$ 4 / \text { pound } ) & & 48,000 \\ \hline \end{array}\] D) \[\begin{array} { | l | r | r | } \hline \text { Raw Materials Inventory } ( 12,000 \text { pounds } \times \$ 3.60 / \text { pound } ) & 43,200 & \\ \hline \text { Direct Materials Cost Variance } & & 4,800 \\ \hline \text { Accounts Payable } ( 12,000 \text { pounds } \times \$ 4 / \text { pound) } & & 48,000 \\ \hline \end{array}\]

McGrath's produces and sells two types of t-shirts-Fancy and Plain.The company provides the following data: \[\begin{array} { l l l } & \text { Budget } & \text { Actual } \\ \text { Unit sales price - Fancy } & \$ 24 & \$ 25 \\ \text { Unit sales price - Plain } & \$ 18 & \$ 17 \\ \text { Unit sales - Fancy } & 1,300 & 1,250 \\ \text { Unit sales - Plain } & 9 0 0&8 7 5 \end{array}\] Compute the flexible budget variance for Fancy t-shirts for sales revenue.

The answer of McGrath's produces and sells two types of...

Bentz Fashions uses standard costs for its manufacturing division.From the following data,calculate the total fixed overhead variance. \[\begin{array} { | l | l | } \hline \text { Actual fixed overhead } & \$ 40,000 \\ \hline \text { Budgeted fixed overhead } & \$ 27,000 \\ \hline \text { Allocated fixed overhead } & \$ 27,000 \\ \hline \text { Standard overhead allocation rate } & \$ 6,75 \\ \hline \text { Standard direct labor hours per unit } & 2,00 \mathrm { DLHr } \\ \hline \text { Actual output } & 2,000 \text { units } \\ \hline \end{array}\]

A) $13,000 U B) $13,000 F C) $13,500 U D) $13,500 F A) $13,000 U B) $13,000 F C) $13,500 U D) $13,500 F

Exam 23: Flexible Budgets and Standard Cost Systems

Underwater Sports Equipment Company projected sales of 79,000 units at a unit sales price of $12 for the year.Actual sales for the year were 75,000 units at $14 per unit.Variable costs were budgeted at $3 per unit,and the actual amount was $5 per unit.Budgeted fixed costs totaled $387,000,while actual fixed costs amounted to $450,000.What is the flexible budget variance for variable costs?

(Multiple Choice)

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Question 161

Because it is a cost variance,the fixed overhead volume variance explains why fixed overhead is underallocated or overallocated.

(True/False)

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Question 162

The total production cost flexible budget variance is obtained by adding direct labor efficiency variance and fixed overhead volume variance.

(True/False)

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Question 163

Golden Marine Stores Company manufactures special metallic materials and decorative fittings for luxury yachts that require highly skilled labor.Golden 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: 2 pounds per unit; $3 per pound Labor: 4 hours per unit; $20 per hour During the first quarter,Golden produced 5,000 units of this product.At the end of the quarter,an examination of the direct materials records showed that the company used 9,500 pounds of direct materials and the direct materials cost variance was $3,750 U.Which of the following is a logical explanation for this variance?

(Multiple Choice)

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Question 164

Atlace 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 \ 4 The company plans to produce 3,000 units and has purchased 12,000 pounds of direct materials at a net cost of $43,200.What is the journal entry to record this transaction?

(Multiple Choice)

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Question 165

The fixed overhead volume variance is a volume variance,not a cost variance.

(True/False)

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Question 166

The Maryland Cheese 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 flexible budget variance for fixed expenses?

(Multiple Choice)

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Question 167

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

(True/False)

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Question 168

Only unfavorable variances should be investigated,if substantial,to determine their causes.

(True/False)

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Question 169

Based on the following,what is the total production cost flexible budget variance?

(Multiple Choice)

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Question 170

Horizon Marine Stores Company manufactures special metallic materials and decorative fittings for luxury yachts that require highly skilled labor.Horizon 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: 4 pounds per unit; $4 per pound Direct labor: 4 hours per unit; $15 per hour Horizon produced 5,000 units during the quarter.At the end of the quarter,an examination of the labor costs records showed that the direct labor cost variance was $6,000 F.Which of the following is a logical explanation for this variance?

(Multiple Choice)

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Question 171

The following information relates to Welty 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 Welty allocates manufacturing overhead to production based on standard direct labor hours. Welty 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 volume variance.

(Essay)

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Question 172

McGrath's produces and sells two types of t-shirts-Fancy and Plain.The company provides the following data: Budget Actual Unit sales price - Fancy \ 24 \ 25 Unit sales price - Plain \ 18 \ 17 Unit sales - Fancy 1,300 1,250 Unit sales - Plain 900 875 Compute the flexible budget variance for Fancy t-shirts for sales revenue.

(Essay)

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Question 173

Define variance.What is the difference between a favorable and an unfavorable variance?

(Essay)

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Question 174

The fixed overhead volume variance always reveals underallocated fixed overhead costs.

(True/False)

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Question 175

The sales volume variance is the difference between the ________.

(Multiple Choice)

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Question 176

Which of the following best describes a standard?

(Multiple Choice)

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Question 177

Bentz Fashions uses standard costs for its manufacturing division.From the following data,calculate the total fixed overhead variance. Actual fixed overhead \ 40,000 Budgeted fixed overhead \ 27,000 Allocated fixed overhead \ 27,000 Standard overhead allocation rate \ 6,75 Standard direct labor hours per unit 2,00 Actual output 2,000 units

(Multiple Choice)

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Question 178

When a manufacturing company uses a standard cost system,Work-in-Process Inventory is debited at standard input quantities and standard costs.

(True/False)

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Question 179

Grace Company manufactures candles.The standard direct materials quantity required to produce one large candle is one pound at a cost of $5 per pound.During November,7,200 large candles were produced using 7,500 pounds of direct materials that cost $45,000. Using the format below,prepare an analysis of the direct materials variances.

(Essay)

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Question 180

Showing 161 - 180 of 204

Because it is a cost variance,the fixed overhead volume variance explains why fixed overhead is underallocated or overallocated.

The total production cost flexible budget variance is obtained by adding direct labor efficiency variance and fixed overhead volume variance.

The fixed overhead volume variance is a volume variance,not a cost variance.

The Maryland Cheese 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 flexible budget variance for fixed expenses?

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

Only unfavorable variances should be investigated,if substantial,to determine their causes.

Based on the following,what is the total production cost flexible budget variance?

Define variance.What is the difference between a favorable and an unfavorable variance?

The fixed overhead volume variance always reveals underallocated fixed overhead costs.

The sales volume variance is the difference between the ________.

Which of the following best describes a standard?

When a manufacturing company uses a standard cost system,Work-in-Process Inventory is debited at standard input quantities and standard costs.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

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Internal Control and Cash

Receivables

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Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

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Cost Management Systems: Activity-Based, just-In-Time, and Quality Management Systems

Cost-Volume-Profit Analysis

Variable Costing

Master Budgets

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