Exam 9: Standard Costs and Variances

The Geurtz Company uses standard costing. The company makes and sells a single product called a Roff. The following data are for the month of August: • Actual cost of direct material purchased and used: $65,560 • Material price variance: $5,960 unfavorable • Total materials variance: $22,360 unfavorable • Standard cost per pound of material: $4 • Standard cost per direct labor-hour: $5 • Actual direct labor-hours: 6,500 hours • Labor efficiency variance: $3,500 favorable • Standard number of direct labor-hours per unit of Roff: 2 hours • Total labor variance: $400 unfavorable -The actual material cost per pound was:

An unfavorable direct labor efficiency variance could be caused by:

Hurren Corporation makes a product with the following standard costs: The company reported the following results concerning this product in June. 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 June is:

Cuda Corporation makes a product that uses a material with the following standards: The company budgeted for production of 3,500 units in November, but actual production was 3,300 units. The company used 23,050 pounds of direct material to produce this output. The company purchased 26,000 pounds of the direct material at a total cost of $158,600. The direct materials purchases variance is computed when the materials are purchased. -The materials quantity variance for November is:

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

Carskadon Corporation makes a product that uses a material with the following direct material standards: The company produced 3,000 units in December using 6,270 pounds of the material. During the month, the company purchased 7,100 pounds of the direct material at a total cost of $13,490. The direct materials purchases variance is computed when the materials are purchased. -The materials price variance for December is:

Which department should usually be held responsible for an unfavorable materials price variance?

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 materials price variance for June is:

Dowen Corporation applies manufacturing overhead to products on the basis of standard machine-hours.For the most recent month,the company based its budget on 4,400 machine-hours.Budgeted and actual overhead costs for the month appear below: The company actually worked 4,460 machine-hours during the month.The standard hours allowed for the actual output were 4,310 machine-hours for the month.What was the overall variable overhead efficiency variance for the month?

The Thompson Company uses standard costing and has established the following direct material and direct labor standards for each unit of Lept. Direct materials: 2 gallons at $4 per gallon Direct labor: 0.5 hours at $8 per hour During September, the company made 6,000 Lepts and incurred the following costs: Direct materials purchased: 13,400 gallons at $4.10 per gallon Direct materials used: 12,600 gallons Direct labor used: 2,800 hours at $7.65 per hour -The materials quantity variance for September was:

Variable manufacturing overhead is applied to products on the basis of standard direct labor-hours.If the direct labor efficiency variance is unfavorable,the variable overhead efficiency variance will be:

The standard quantity per unit for direct materials should not include an allowance for waste.

Tidd Corporation makes a product with the following standard costs: The company reported the following results concerning this product in November. 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 November is:

The Porter Company has a standard cost system.In July the company purchased and used 22,500 pounds of direct material at an actual cost of $53,000;the materials quantity variance was $1,875 Unfavorable;and the standard quantity of materials allowed for July production was 21,750 pounds.The materials price variance for July was:

Caquias Corporation makes a product with the following standard costs: The company reported the following results concerning this product in August. 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 August is:

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

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 rate variance for June is:

Tidd Corporation makes a product with the following standard costs: The company reported the following results concerning this product in November. 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 November is:

Millonzi Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs).The company has provided the following data for the most recent month: What was the variable overhead rate variance for the month?

Fastic Corporation makes a product with the following standard costs: The company reported the following results concerning this product in August. 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.