Exam 8: Standard Costing and Variance Analysis

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

If standard costing is not economically feasible for a company, predetermined overhead rates should not be used.

Standard costs are based solely on expected future costs and conditions.

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 $1842. All of the direct materials were used to manufacture 295 pots. Lucas's direct materials price variance was

A(n) ________ cost is synonymous with the product cost calculated in a conventional standard cost accounting system.

Under which of the following circumstances would the base used to calculate the variable overhead rate be the same as that used for the fixed overhead rate?

In standard costing,

The direct materials quantity variance is the difference between the actual quantity used and the standard quantity times the standard price.

Ewing Corporation's controller has developed the cost and usage data listed below in preparation of standard unit cost information for the coming year. Direct materials quantity standard 3 pounds per prochuct Direct labor time standard 5 hours per product Direct materials price standard \ 10 per pound Direct labor rate standard \ 9 per hour Standard variable overhead rate \ 5 per labor hour Standard fixed overhead rate \ 10 per labor hour - The total standard unit cost is

A flexible budget is most useful

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: Standerds: Direct materials 4 yards@ \ 2.50 per yard Direct labor 1.5 hour@ \9 per hour Overhead: Variable \ 5.00 per direct labor hour Fixed. \5 .50 per direct labor hour Compute the standard unit cost for a nylon shorts set.

Harrison, Inc., has computed direct labor standards for the manufacture of its product to be 4 hours of labor per product at a cost of $15 per hour. During March, Harrison produced 45 products in 190 hours and incurred direct labor costs of $2,720. Harrison's direct labor efficiency variance was

The direct labor rate standard is either set by a labor contract or defined by the company.

Sweet Dreams manufactures candy. Its records revealed the following data: Number of units produced 4,000 Standard direct labor hours per unit 2 Standard variable overhead rate \ 2.50 per hour Standard fixed overhead rate \ 5.00 per hour Budgeted fixed overhead costs \ 40,800 Actual variable overhead costs \ 16,800 Actual fixed overhead costs \ 40,400 Actual labor hours 8,000 direct labor hours Total actual overhead \ 57,200 - The total variable overhead variance is

The Lennon Company uses a standard costing system and a flexible budget. At a normal level of activity of 15,000 units and 45,000 standard direct labor hours, the standard direct labor cost would be $270,000. During June, 44,050 hours were worked to produce 14,000 units at an actual direct labor cost of $352,000. The direct labor efficiency variance in June was

Using the labor time standard of 0.5 labor hour per unit and a labor cost standard of $10 per labor hour for a 10 pound bag of chocolate and the following actual cost and usage data, compute the direct labor efficiency variance. Direct labor hours used 4,950 hours Total cost of direct labor \ 53,460 Number of good units prochuced 9,000 units

Point Company uses the standard costing method. The company's main product is a fine-quality audio speaker that normally takes 0.25 hour to produce. Normal annual capacity is 3,000 direct labor hours, and budgeted fixed overhead costs for the year were $6,750. During the year, the company produced and sold 8,000 units. Actual fixed overhead costs were $4,800. - Compute the fixed overhead volume variance.

Underfoot Products uses standard costing. The following information about overhead was generated during May: Standard variable overhead rate Standard fixed overhead rate Actual variable overhead costs Actual fixed overhead costs Budgeted fixed overhead costs Standard machine hours per unit produced Good units prockuced Actual machine hours \ 2 per machine hours \ 1 per machine hours \ 390,000 \ 175,000 \ 190,000 10 18,000 195,000 - Compute the fixed overhead variance.

Underfoot Products uses standard costing. The following information about overhead was generated during May: Standard variable overhead rate Standard fixed overhead rate Actual variable overhead costs Actual fixed overhead costs Budgeted fixed overhead costs Standard machine hours per unit produced Good units prockuced Actual machine hours \ 2 per machine hours \ 1 per machine hours \ 390,000 \ 175,000 \ 190,000 10 18,000 195,000 - Compute the fixed overhead budget variance.

Standard costs are useful for all but which of the following?