Exam 7: Flexible Budgets,direct-Cost Variances,and Management Control

Nicholas Company manufacturers TVs.Some of the company's data was misplaced.Use the following information to replace the lost data: Required: a.What are the respective flexible-budget revenues (A)? b.What are the static-budget revenues (B)? c.What are the actual variable costs (C)? d.What is the total flexible-budget variance (D)? e.What is the total sales-volume variance (E)? f.What is the total static-budget variance?

Zebra Corporation currently produces baseball caps in an automated process.Expected production per month is 17,000 units,direct material costs are $7.50 per unit,and manufacturing overhead costs are $60,000 per month.Manufacturing overhead is entirely fixed costs.What is the flexible budget for 11,000 and 17,000 units,respectively?

The actual information pertains to the third quarter.As part of the budgeting process,the Duck Decoy Department of Paralith Incorporated had developed the following static budget for the third quarter.Duck Decoy is in the process of preparing the flexible budget and understanding the results. The flexible budget will report ________ for variable costs.

A flexible-budget variance can be subdivided into the static-budget variance and the sales-volume variance.

Genent Industries,Inc.(GII),developed standard costs for direct material and direct labor.In 2017,GII estimated the following standard costs for one of their major products,the 30-gallon heavy-duty plastic container. During July,GII produced and sold 4,000 containers using 2,700 pounds of direct materials at an average cost per pound of $19 and 1,290 direct manufacturing labor hours at an average wage of $14.30 per hour. The direct manufacturing labor flexible-budget variance during July is ________.

A company purchases $650,000 of materials on credit.The standard cost for the materials is $675,000.Which of the following would be the correct journal entries to record the purchase under a standard costing system? Direct Materials Price Variance $25,000 Direct Materials Price Variance $25,000

Genent Industries,Inc.(GII),developed standard costs for direct material and direct labor.In 2017,GII estimated the following standard costs for one of their major products,the 30-gallon heavy-duty plastic container. During July,GII produced and sold 4,000 containers using 600 pounds of direct materials at an average cost per pound of $26 and 1,290 direct manufacturing labor hours at an average wage of $18.40 per hour. The direct manufacturing labor price variance during July is ________.

A company budgets 10,000 units of sales based on a projected selling price of $13.00.The actual units sold were 15,000 at a price of $10.What is the flexible budget for sales?

Heavy Products,Inc.developed standard costs for direct material and direct labor.In 2017,AII estimated the following standard costs for one of their major products,the 10-gallon plastic container. During June,Heavy Products produced and sold 15,000 containers using 2,400 pounds of direct materials at an average cost per pound of $92 and 3,750 direct manufacturing labor-hours at an average wage of $91.25 per hour. The direct manufacturing labor efficiency variance during June is ________.

A master budget is called a static budget because it is developed around a single planned output level.

Nancy's Draperies manufactures curtains.A certain window curtain requires the following: During the second quarter,the company made 1,500 curtains and used 14,000 square yards of fabric costing $72,000.Direct labor totaled 7,600 hours for $83,600. Required: a.Compute the direct materials price and efficiency variances for the quarter. b.Compute the direct manufacturing labor price and efficiency variances for the quarter.

A percentage of products started and completed without requiring any rework is an example of nonfinancial performance measure.

Schooner Corporation used the following data to evaluate its current operating system.The company sells items for $24 each and used a budgeted selling price of $24 per unit. What is the static-budget variance of operating income?

A flexible-budget variance is $600 favorable for unit-related costs.This indicates that costs were ________.

Standard labor rate is $7.50 per hour.Standard labor allowed per unit is 0.7 hours.Actual cost per labor hour is $7.00 and actual labour hour per unit is 1 hours.What is the standard labor cost per output unit?

Efficiency is ________.

Classic Products Company manufactures colonial style desks.Some of the company's data was misplaced.Use the following information to replace the lost data: What is the total sales-volume variance (E)?

Mid City Products Inc.(MCP),developed standard costs for direct material and direct labor.In 2017,MCP estimated the following standard costs for one of their most popular products. During September,MCP produced and sold 1,000 units using 2,200 pounds of direct materials at an average cost per pound of $2.00 and 360 direct labor hours at an average wage of $15.15 per hour. The direct material efficiency variance during September is ________.

With a direct materials price variance of $40,000 F and direct materials efficiency,direct manufacturing labor price,and direct labor efficiency variances of $60,000 U,20,000 U,and 15,000 U,the write-off to cost of goods sold if these are deemed immaterial would be a debit of $55,000.

In variance analysis,if any single performance measure is underemphasized,managers will tend to make decisions that will cause the particular performance measure to look good.