Exam 9: Standard Costs and Variances

The following standards have been established for a raw material used to make product P62: The following data pertain to a recent month's operations: Required: a.What is the materials price variance for the month? b.What is the materials quantity variance for the month?

Hickory Corporation, which produces commercial safes, has provided the following data: Supplies cost is an element of variable manufacturing overhead. -The variable overhead rate variance for supplies is closest to:

Hickory Corporation, which produces commercial safes, has provided the following data: Supplies cost is an element of variable manufacturing overhead. -The variable overhead efficiency variance for supplies is closest to:

Gentile Corporation makes a product with the following standard costs: The company produced 6,000 units in May using 36,970 kilos of direct material and 4,340 direct labor-hours. During the month, the company purchased 40,400 kilos of the direct material at $4.70 per kilo. The actual direct labor rate was $13.70 per hour and the actual variable overhead rate was $2.70 per hour. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. -The variable overhead rate variance for May is:

Fabiano Corporation makes a product whose direct labor standards are 0.5 hours per unit and $23.00 per hour. In February the company produced 3,300 units using 1,640 direct labor-hours. The actual direct labor cost was $38,540. -The labor rate variance for February is:

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

Cox Engineering performs cement core tests in its laboratory. The following standards have been set for each core test performed: During March, the laboratory performed 2,000 core tests. On March 1 no direct materials (sand) were on hand. Variable manufacturing overhead is assigned to core tests on the basis of standard direct labor-hours. The following events occurred during March: • 8,600 pounds of sand were purchased at a cost of $7,310. • 7,200 pounds of sand were used for core tests. • 840 actual direct labor-hours were worked at a cost of $8,610. • Actual variable manufacturing overhead incurred was $3,200. -The materials price variance for March is:

Snuggs Corporation makes a product with the following standard costs: The company reported the following results concerning this product in October. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. -The materials quantity variance for October is:

The standard cost per unit is computed by multiplying the standard quantity or hours by the standard price or rate.

Kibodeaux Corporation makes a product with the following standard costs: The company budgeted for production of 3,300 units in June, but actual production was 3,400 units. The company used 33,240 liters of direct material and 320 direct labor-hours to produce this output. The company purchased 35,900 liters of the direct material at $4.90 per liter. The actual direct labor rate was $22.70 per hour and the actual variable overhead rate was $2.70 per hour. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. -The labor rate variance for June is:

Todco planned to produce 3,000 units of its single product,Teragram,during November.The standard specifications for one unit of Teragram include six pounds of material at $0.30 per pound.Actual production in November was 3,100 units of Teragram.The accountant computed a favorable materials purchase price variance of $380 and an unfavorable materials quantity variance of $120.Based on these variances,one could conclude that:

The following materials standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: -What is the materials quantity variance for the month?

Landram Corporation makes a product with the following standard costs: In March the company produced 4,700 units using 10,230 kilos of the direct material and 2,210 direct labor-hours. During the month, the company purchased 10,800 kilos of the direct material at a cost of $76,680. The actual direct labor cost was $38,233 and the actual variable overhead cost was $11,934. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. -The variable overhead efficiency variance for March is:

Snuggs Corporation makes a product with the following standard costs: The company reported the following results concerning this product in October. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. -The labor efficiency variance for October is:

The following materials standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: Required: a.What is the materials price variance for the month? b.What is the materials quantity variance for the month?

Cox Engineering performs cement core tests in its laboratory. The following standards have been set for each core test performed: During March, the laboratory performed 2,000 core tests. On March 1 no direct materials (sand) were on hand. Variable manufacturing overhead is assigned to core tests on the basis of standard direct labor-hours. The following events occurred during March: • 8,600 pounds of sand were purchased at a cost of $7,310. • 7,200 pounds of sand were used for core tests. • 840 actual direct labor-hours were worked at a cost of $8,610. • Actual variable manufacturing overhead incurred was $3,200. -The labor efficiency variance for March is:

Kibodeaux Corporation makes a product with the following standard costs: The company budgeted for production of 3,300 units in June, but actual production was 3,400 units. The company used 33,240 liters of direct material and 320 direct labor-hours to produce this output. The company purchased 35,900 liters of the direct material at $4.90 per liter. The actual direct labor rate was $22.70 per hour and the actual variable overhead rate was $2.70 per hour. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. -The variable overhead efficiency variance for June is:

The Wright Company has a standard costing system.The following data are available for September: The actual price per pound of direct materials purchased in September is:

Sande Corporation makes a product with the following standard costs: In November the company's budgeted production was 2,900 units but the actual production was 3,000 units. The company used 27,670 grams of the direct material and 1,390 direct labor-hours to produce this output. During the month, the company purchased 31,700 grams of the direct material at a cost of $196,540. The actual direct labor cost was $29,607 and the actual variable overhead cost was $2,502. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. -The variable overhead rate variance for November is:

The Richie Company uses a standard costing system in which variable manufacturing overhead is assigned to production on the basis of the number of machine setups. Data for the month of October include the following: • Variable manufacturing overhead cost incurred: $42,750 • Total variable manufacturing overhead variance: $5,430 favorable • Standard machine setups allowed for actual production: 2,920 setups • Actual machine setups incurred: 2,850 setups -The variable overhead rate variance is: