Exam 24: Standard Costing and Variance Analysis

"The difference between actual hours worked and standard hours allowed for the good units produced,multiplied by the standard labor rate" is a description of the

Which of the following is not included in performance reports?

Corrective action is necessary even if a variance is insignificant.

Direct labor time standards express the hourly labor cost per function or job classification that exists during the current accounting period.

The primary difference between a fixed (static)budget and a flexible budget is that a fixed budget

The direct materials price standard for a period is determined by averaging that period's cost of direct material purchases.

A flexible budget is most useful

The Silent Door Company manufactures soundproof doors.Each door requires two pieces of 16-gauge sheet steel measuring 94 inches by 50 inches.The standard cost of each piece of steel is $150.During the month of July,2,040 doors were started and completed,and there were no beginning or ending work in process inventories.Accounting records revealed that 4,200 pieces of sheet steel were purchased during July at a cost of $623,700.All 4,200 pieces were used during the month.Compute the direct materials price and direct materials quantity variances for July production,assuming the price variance is isolated at the time of purchase.Note whether the variances are favorable or unfavorable.Round to the nearest dollar.

Service organizations do not develop standard rates for which of the following?

Although expensive to install and maintain,a standard cost accounting system can save a company considerable amounts of money by reducing resource waste.

Lucas Company has set standards for the manufacturing of clay pots to be 2 pounds of direct materials,per pot,at a cost of $3 per pound.During the current period,600 pounds of direct materials were purchased for $1,872.All of the direct materials were used to manufacture 295 pots.Lucas' direct materials price variance was

The use of realistic predetermined unit costs to facilitate product costing,cost control,cost flow,and inventory valuation is a description of the

The C.M.Landscaping Co.uses chicken manure to fortify the soil around trees bearing rare fruit.The price standard used is $3.50 per 10 pound sack of chicken manure.During the current year,the actual purchase price averaged $3.65 per sack,according to the company's purchasing agent.The company purchased and used 1,560 sacks of chicken manure during the year.Compute the direct materials price variance.Be sure to indicate whether it is favorable or unfavorable.

James Corporation's controller has developed the cost and usage data listed below in preparation of standard unit cost information for the coming year. -Using the above information provided for James Corporation,the standard unit cost for direct labor is

A standard costing system

The direct labor efficiency variance is the difference between standard hours allowed and actual hours worked for good units produced,multiplied by the standard labor rate.

Standard costing can be used only with a process costing system.

If a company is operating at a capacity below its normal capacity in units,the fixed overhead volume variance will be favorable.

An expression of the hourly labor pay cost per function or job classification that is expected to exist during the next accounting period is the definition of a

When actual capacity exceeds expected capacity,the result is a(n)