Exam 12: Standard Costs and Variances

Vitko Corporation makes automotive engines. For the most recent month, budgeted production was 6,000 engines. The standard power cost is $8.80 per machine-hour. The company's standards indicate that each engine requires 6.1 machine-hours. Actual production was 6,400 engines. Actual machine-hours were 38,730 machine-hours. Actual power cost totaled $350,628. Required: Determine the rate and efficiency variances for the variable overhead item power cost and indicate whether those variances are unfavorable or favorable. Show your work!

A labor efficiency variance resulting from the use of poor quality materials should be charged to:

The materials quantity variance for October is:

The variable overhead efficiency variance for November is:

The labor efficiency variance is:

The materials quantity variance for June is:

Silmon Corporation makes a product with the following standard costs: In June the company produced 4,200 units using 21,830 grams of the direct material and 2,580 direct labor-hours. During the month the company purchased 24,100 grams of the direct material at a price of $6.80 per gram. The actual direct labor rate was $14.60 per hour and the actual variable overhead rate was $3.90 per hour. The materials price variance is computed when materials are purchased. Variable overhead is applied on the basis of direct labor-hours. Required: a. Compute the materials quantity variance. b. Compute the materials price variance. c. Compute the labor efficiency variance. d. Compute the direct labor rate variance. e. Compute the variable overhead efficiency variance. f. Compute the variable overhead rate variance.

A materials price variance is favorable if the actual price exceeds the standard price.

Tavorn Corporation applies manufacturing overhead to products on the basis of standard machine-hours. The company's standard variable manufacturing overhead rate is $1.80 per machine-hour. The actual variable manufacturing overhead cost for the month was $13,080. The original budget for the month was based on 7,100 machine-hours. The company actually worked 7,210 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 7,070 machine-hours. What was the variable overhead efficiency variance for the month?

The labor rate variance for September is:

The variable overhead efficiency variance for May is:

If the labor efficiency variance is unfavorable, then

When more hours of labor time are necessary to complete a job than the standard allows, the labor rate variance is unfavorable.

The materials quantity variance is:

The following standards for variable manufacturing overhead have been established for a company that makes only one product: The following data pertain to operations for the last month: What is the variable overhead rate variance for the month?

Standard costs should generally be based on the actual costs of prior periods.

Blomdahl Corporation makes a product with the following standard costs: The company reported the following results concerning this product in October. The materials price variance is recognized when materials are purchased. Variable overhead is applied on the basis of direct labor-hours. Required: a. Compute the materials quantity variance. b. Compute the materials price variance. c. Compute the labor efficiency variance. d. Compute the direct labor rate variance. e. Compute the variable overhead efficiency variance. f. Compute the variable overhead rate variance.

The labor efficiency variance for May is:

The materials quantity variance for November is:

The variable overhead efficiency variance for October is: