Exam 23: Flexible Budgets and Standard Cost Systems

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.

Zenith Fashions uses standard costs for their manufacturing division.From the following data,calculate the fixed overhead cost variance. Actual fixed overhead \ 36,000 Budgeted fixed overhead \ 21,000 Standard overhead allocation rate \ 8 Standard direct labor hours per unit 4 DLHr Actual output 2,400 units

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

Fernandez Manufacturing uses a standard cost system.Standard and actual data for manufacturing overhead are as follows: Variable overhead allocation rate: $30 per direct labor hour Fixed overhead allocation rate: $10 per direct labor hour Actual overhead incurred (variable and fixed): $45,600 Standards for direct labor are as follows: Hours per unit 0.5,Direct labor cost per hour $18.00 Actual direct labor for the month: 1,200 hours for a total cost of $24,000 Actual and planned production for the month: 3,000 units Prepare the journal entry to allocate overhead cost (both variable and fixed)to production.

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.

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

The management of Chung Fire Alarms has calculated the following variances: Direct materials cost variance \ 11,000 Direct materials efficiency variance 36,000 Direct labor cost variance 15,500 Direct labor efficiency variance 12,000 Total variable overhead variance 8,000 Total fixed overhead variance 3,000 What is the total direct labor variance of the company?

An unfavorable flexible budget variance in operating income might be due to a(n)________.

Which of the following is an example of a direct labor cost standard?

Standard costs are developed by the cooperative effort of purchasing,production,human resources,and accounting personnel.

Which of the following should be considered when analyzing manufacturing overhead variances?

Which of the following is an example of a direct materials cost standard?

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

Complete the following table: Variance How is the variance calculated? How does the variance arise? Flexible budget Sales volume

Based on the following,what is the total direct labor variance?

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

Austin Brands Company uses standard costs for its manufacturing division.Standards specify 0.1 direct labor hours per unit of product.At the beginning of the year,the static budget for variable overhead costs included the following data: Production volume 6,100 units Budgeted variable overhead costs \ 14,000 Budgeted direct labor hours 530 hours At the end of the year,actual data were as follows: Production volume 4,100 units Actual variable overhead costs \ 15,000 Actual direct labor hours 480 hours What is the variable overhead cost variance? (Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar.)

Mountain Sports Equipment Company projected sales of 82,000 units at a unit sales price of $12 for the year.Actual sales for the year were 76,000 units at $14.00 per unit.Variable costs were budgeted at $3 per unit,and the actual amount was $6 per unit.Budgeted fixed costs totaled $376,000,while actual fixed costs amounted to $410,000.What is the sales volume variance for total revenue?

Carlson Fashions uses standard costs for its manufacturing division.From the following data,calculate the fixed overhead volume variance. Actual fixed overhead \ 40,000 Budgeted fixed overhead \ 24,000 Standard overhead allocation rate \ 8 Standard direct labor hours per unit 2 DLHr Actual output 2,100 units

Favorable and unfavorable variances are subtracted from each other to arrive at a net favorable or unfavorable variance.