Exam 22: Performance Evaluation Using Variances From Standard Costs

Rosser Company produces a container that requires 4 yds. of material per unit. The standard price of one yard of material is $4.50. During the month, 9,500 chairs were manufactured, using 37,300 yards. Required: Journalize the entry to record the standard direct materials used in production.

The following data is given for the Harry Company: Overhead is applied on standard labor hours. The direct labor time variance is:

Assuming that the standard fixed overhead rate is based on full capacity, the cost of available but unused productive capacity is indicated by the:

Assuming that the Morocco Desk Co. purchases 6,000 feet of lumber at $6.00 per foot and the standard price for direct materials is $5.00, the entry to record the purchase and unfavorable direct materials price variance is:

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual was 800 units at $12, the direct materials quantity variance was $2,200 unfavorable.

Standards that represent levels of operation that can be attained with reasonable effort are called:

Principle of exceptions allows managers to focus on correcting variances between standard costs and actual costs.

If the standard to produce a given amount of product is 500 direct labor hours at $15 and the actual was 600 hours at $17, the rate variance was $1,200 favorable.

The St. Augustine Corporation originally budgeted for $360,000 of fixed overhead at 100% production capacity. Production was budgeted to be 12,000 units. The standard hours for production were 5 hours per unit. The variable overhead rate was $3 per hour. Actual fixed overhead was $360,000 and actual variable overhead was $170,000. Actual production was 11,700 units. Compute the factory overhead volume variance.

Standards are performance goals used to evaluate and control operations.

A budget performance report compares actual results with the budgeted amounts and reports differences for possible investigation.

The following data is given for the Taylor Company: Overhead is applied on standard labor hours. Compute the direct material price and quantity variances for Taylor Company.

The standard cost is how much a product should cost to manufacture.

The standard price and quantity of direct materials are separated because:

Calculate the Direct Labor Rate Variance using the above information

The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are as follows: The amount of the direct materials quantity variance is:

If the standard to produce a given amount of product is 600 direct labor hours at $17 and the actual was 500 hours at $15, the time variance was $1,500 unfavorable.

Which of the following is not a reason for a direct materials quantity variance?

The following information is for the standard and actual costs for the Happy Corporation. Standard Costs: Budgeted units of production - 16,000 (80% of capacity) Standard labor hours per unit - 4 Standard labor rate - $26 per hour Standard material per unit - 8 lbs. Standard material cost - $ 12 per pound Standard variable overhead rate - $15 per labor hour Budgeted fixed overhead - $640,000 Fixed overhead rate is based on budgeted labor hours at 80% capacity. Actual Cost: Actual production - 16,500 units Actual material purchased and used - 130,000 pounds Actual total material cost - $1,600,000 Actual labor - 65,000 hours Actual total labor costs - $1,700,000 Actual variable overhead - $1,000,000 Actual fixed overhead - $640,000 Actual variable overhead - $1,000,000 Determine: (a) the quantity variance, price variance, and total direct materials cost variance; (b) the time variance, rate variance, and total direct labor cost variance; and (c) the volume variance, controllable variance, and total factory overhead cost variance.

Trumpet Company produced 8,700 units of product that required 3.25 standard hours per unit. The standard variable overhead cost per unit is $4.00 per hour. The actual variance factory overhead was $111,000. Determine the variable factory overhead controllable variance.