Exam 23: Performance Evaluation Using Variances From Standard Costs

Greyson Company produced 8,300 units of their product that required 4.25 standard hours per unit. Determine the standard fixed overhead cost per unit at 27,000 hours, which is 100% of normal capacity, if the favorable fixed factory overhead volume variance is $14,895.

The following data is given for the Stringer Company: Overhead is applied on standard labor hours. The direct material price variance is:

Match the following terms with the best definition given.

If a company records inventory purchases at standard cost and also records purchase price variances, prepare the journal entry for a purchase of 6,000 widgets that were bought at $8.00 and have a standard cost of $8.15.

The standard costs and actual costs for direct materials for the manufacture of 3,000 actual units of product are as follows: The amount of direct materials price variance is:

The formula to compute direct material quantity variance is to calculate the difference between

Robin Company purchased and used 520 pounds of direct materials to produce a product with a 510 pound standard direct materials requirement. The standard materials price is $2.10 per pound. The actual materials price was $2.00 per pound. Prepare the journal entries to record (1) the purchase of the materials and (2) the material entering production. Robin records standards and variances in the general ledger.

Match the following terms with the best definition given.

Using the following information, prepare a factory overhead flexible budget for Andover Company where the total factory overhead cost is $75,500 at normal capacity (100%). Include capacity at 75%, 90%, 100%, and 110%. Total variable cost is $6.25 per unit and total fixed costs are $38,000. The information is for month ended August 31, 2012. (Hint: Determine units produced at normal capacity.)

Cost systems using detailed estimates of each element of manufacturing cost entering into the finished product are called standard cost systems.

The following are inputs and outputs to the help desk. Operator training Number of calls per day Maintenance of computer equipment Number of operators Number of complaints Identify whether each is an input or an output to the help desk.

Standards are more widely used for nonmanufacturing expenses than for manufacturing costs.

At the end of the fiscal year, variances from standard costs are usually transferred to the:

Standard costs are determined by multiplying expected price by expected quantity.

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

Standard costs can be used with both the process cost and job order cost systems.

Variances from standard costs are usually reported to:

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

The following information relates to manufacturing overhead for the Chapman Company: Standards: Total fixed factory overhead - $450,000 Estimated production - 25,000 units (100% of capacity) Overhead rates are based on machine hours. Standard hours allowed per unit produced - 2 Fixed overhead rate - $9.00 per machine hour Variable overhead rate - $3.50 per hour Actual: Fixed factory overhead - $450,000 Production - 24,000 units Variable overhead - $170,000 Required:

The standard factory overhead rate is $7.50 per machine hour ($6.20 for variable factory overhead and $1.30 for fixed factory overhead) based on 100% capacity of 80,000 machine hours. The standard cost and the actual cost of factory overhead for the production of 15,000 units during August were as follows: What is the amount of the factory overhead controllable variance?