Exam 8: Flexible Budgets and Variance Analysis

Margaret Duffy Company has the following information available: Budgeted cost of direct materials at 900,000 units \9 00,000 Budgeted cost of direct materials at 820,000 units \8 20,000 Actual cost of direct materials at 820,000 units \8 40,000 Actual level of output(units) 820,000 Planned level of output(units) 900,000 The cost driver of product costs is units of output.What is the flexible budget variance for direct material costs?

________ is the degree to which an organization minimizes the ________ used to achieve an objective.

The following data are for California Closets: Flexible Budget for Actual Static Budget Actual Sales activity Units 18,000 16,000 18,000 Sales \3 60,000 \3 20,000 \3 60,000 Variable costs 234,000 192,000 216,000 Contribution margin \1 26,000 \1 28,000 \1 44,000 Fixed costs 76,000 80,000 80,000 Operating income \5 0,000 \4 8,000 \6 4,000 The sales activity variance for operating income is ________.

The Quinn Company makes tables for which the following standards have been developed: Standard Inputs Expected Standard Price Expected For Each Unit of Output Per Unit of Input Direct Materials 10 ounces \4 per ounce Direct Labor 3 hours \ 16 per hour Production of 200 tables was expected in June,but 220 tables were actually completed.Direct materials purchased and used were 2,100 pounds at an actual price of $4.40 per pound.Direct labor cost for the month was $10,620,and the actual pay per hour was $18.00.What is the direct labor quantity variance for the month of June?

Currently attainable standards do not make allowances for spoilage and waste.

Variable overhead efficiency variances are unfavorable when ________.

When should a company use an activity-based flexible budget with multiple cost drivers instead of a simple flexible budget with one cost driver?

Flexible budget variances are the difference between the actual results and ________.

If the direct labor price variance is $800 Favorable and the direct labor usage variance is $700 Unfavorable,then ________.

A favorable expense variance is when budgeted expenses are less than actual expenses.

Perez Company uses activity-based costing.The company is trying to estimate the costs of the processing activity in the factory.The company has developed the following flexible budget formula: Y = $10.50X + $13,000 Where: Y = Total processing cost per quarter and X = Number of machine hours If 10,000 machine hours are used next quarter,total variable costs are ________ and total fixed costs are ________.

Garcia Company planned to produce 12,000 units.This level of activity required 40 setups at a cost of $18,000 plus $500 per setup.Actual production was 10,000 units,requiring 15 setups.Actual setup cost was $26,000.What is the static budget amount for total setup costs?

Flexible budget variances are the deviations of actual results from the ________.

Perfection standards and ideal standards are different.

Johnsen Company reported a flexible budget variance for direct labor of $8,000 Favorable for the current year.If the direct labor price variance was $2,000 Unfavorable,what was the direct labor efficiency variance?

A budget prepared for different levels of activity is called a ________.

Butters Company produces 2,500 units.Each unit was expected to require 2 labor hours at a cost of $10 per hour.Total labor cost was $52,250 for 4,750 hours worked.Direct labor is measured in labor hours.What is the direct labor quantity variance?

Beckowski Company had the following information available for its specialty product: Standards for one unit of product: Direct Materials: 5 pounds at $2 per pound Direct Labor: 0.50 hour at $16 per hour Materials and Labor Used to produce 8,500 units: Direct Materials: 46,000 pounds at ? per pound Direct Labor: 4,000 hours at $16.80 per hour If the Direct Materials Price Variance is $4,600 Unfavorable,what is the actual cost per pound of direct materials used?

The flexible budget variance for variable overhead costs is composed of a(n)________ variance and a(n)________ variance.

The quantity variance and efficiency variance for direct labor are different types of variances.