Exam 24: Standard Costing and Variance Analysis

In standard costing,

The variable overhead spending variance is also called the variable overhead rate variance.

Sport Runner Inc. ,produces a complete line of men's running apparel.The nylon short set is a very popular item in the southern states.During June,the company's records revealed the following information about the production of the nylon shorts set: Compute the standard unit cost for a nylon shorts set.

Discuss the keys to preparing a performance report based on standard costs and related variances.

In a fully integrated standard costing system,standard costs eventually flow into the

Keerin Inc. ,produces a complete line of women's athletic apparel.Sweat suits are very popular in the northern states.During August,the company's records revealed the following information about the production of sweat suits: Compute the standard unit cost for a sweat suit.

Fantastic Lips Inc.specializes in manufacturing lipstick.Racy Red,one of more than 75 shades produced by the company,is made from castor oil,beeswax,aloe vera,and a base compound.For the next 12 months,the company's purchasing agent believes that the cost of ingredients will be as follows: The direct labor time standard is 4 hours per case at a standard direct labor rate of $11.00 per hour.The standard overhead rates are $15.00 per direct labor hour for the standard variable overhead rate and $13.00 per direct labor hour for the standard fixed overhead rate. a.Using these production standards,compute the standard unit cost of direct materials per case of Racy Red if it takes 0.2 gallon of castor oil,0.5 pound of beeswax,0.3 gallon of aloe vera,and 1 gallon of base compound to produce one case. b.Using the standard unit cost of direct materials per case determined in (a)and the production standards given for direct labor and overhead,compute the standard unit cost of one case of Racy Red lipstick.

Good Sleep Inc.manufactures soft pillows.Its records revealed the following data: -Using the above information provided for Good Sleep,the total overhead cost variance is

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 total standard unit cost is

The flexible budget formula is an equation that determines budgeted costs for any level of output.

The total overhead cost variance is the difference between what actual overhead cost is and what it should have cost according to the flexible budget for the good units produced.

The effective evaluation of managers' performance depends on both human factors and company policies.Using variances from standard costs in a manager's performance report adds accuracy to the evaluation process.What actions should be taken to ensure effectiveness and fairness when setting up a performance evaluation process?

Using the information given below,determine the total standard unit cost. Round your intermediate calculations and final answers to two decimal places.

Robert Inc.uses the standard costing method.The company's main product is a fine-quality headphones that normally takes 0.5 hour to produce.Normal annual capacity is 5,000 direct labor hours,and budgeted fixed overhead costs for the year were $8,750.During the year,the company produced and sold 5,800 units.Actual fixed overhead costs were $6,000. -Using the information provided for Robert Inc,compute the fixed overhead budget variance.

The direct materials price variance is the difference between the standard price and the actual price,multiplied by the actual quantity.

The purchasing agent is responsible for developing the direct materials quantity standard.

Standard costs are realistically predetermined costs of direct materials,direct labor,and overhead that usually are expressed as a cost per unit.

The standard overhead cost is the sum of the estimates of variable and fixed overhead costs in the next accounting period.

The direct materials standards for the main product of Duchess Company are 8 grams of direct materials per product at a cost of $3 per gram.During April,969 grams of direct materials were used to produce 120 products at a direct materials cost of $2,900.The direct materials quantity variance for April was

The final step in variance analysis is taking appropriate corrective action.