Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

The standards for product C54L specify 4.5 direct labor-hours per unit at $12.40 per direct labor-hour.Last month 1,560 units of product C54L were produced using 7,000 direct labor-hours at a total direct labor wage cost of $86,100.
Required:
a.What was the labor rate variance for the month?
b.What was the labor efficiency variance for the month?

Accepted Answer

a.Labor rate variance = (AH @#LAT-DLM& AR)- (AH @#LAT-DLM& S

Question 3

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!

Accepted Answer

Variable overhead rate variance = (AH @#LAT-DLM& A

Question 4

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 efficiency variance for November is:

Accepted Answer

A) $10,720 U 
B) $10,720 F 
C) $10,653 U 
D) $10,653 F 
A) $10,720 U 
B) $10,720 F 
C) $10,653 U 
D) $10,653 F

Question 5

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?

Accepted Answer

A) $354 unfavorable 
B) $252 unfavorable 
C) $54 favorable 
D) $102 unfavorable 
A) $354 unfavorable 
B) $252 unfavorable 
C) $54 favorable 
D) $102 unfavorable

Question 6

The materials quantity variance should be computed:

Accepted Answer

A) when materials are purchased. 
B) based upon the amount of materials used in production. 
C) based upon the difference between the actual and standard prices per unit times the actual quantity used. 
D) only when there is a difference between standard and actual cost per unit for the materials. 
A) when materials are purchased. 
B) based upon the amount of materials used in production. 
C) based upon the difference between the actual and standard prices per unit times the actual quantity used. 
D) only when there is a difference between standard and actual cost per unit for the materials.

Question 7

Tower Company planned to produce 3,000 units of its single product,Titactium,during November.The standards for one unit of Titactium specify six pounds of materials at $0.30 per pound.Actual production in November was 3,100 units of Titactium.There was an unfavorable materials price variance of $380 and a favorable materials quantity variance of $120.Based on these variances,one could conclude that:

Accepted Answer

A) more materials were purchased than were used. 
B) more materials were used than were purchased. 
C) the actual cost per pound for materials was less than the standard cost per pound. 
D) the actual usage of materials was less than the standard allowed. 
A) more materials were purchased than were used. 
B) more materials were used than were purchased. 
C) the actual cost per pound for materials was less than the standard cost per pound. 
D) the actual usage of materials was less than the standard allowed.

Question 8

The following labor 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 labor rate variance for the month?
b.What is the labor efficiency variance for the month?

Accepted Answer

a.Labor rate variance = (AH @#LAT-DLM& AR)- (AH @#LAT-DLM& S

Question 9

The Litton Company has established standards as follows:

Direct material: 3 pounds per unit   $4 per pound = $12 per unit
Direct labor: 2 hours per unit   $8 per hour = $16 per unit
Variable manufacturing overhead: 2 hours per unit   $5 per hour = $10 per unit

Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased.
  The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours.
-The variable overhead rate variance is:

Accepted Answer

A) $240 U 
B) $220 U 
C) $220 F 
D) $240 F 
A) $240 U 
B) $220 U 
C) $220 F 
D) $240 F

Question 10

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 efficiency variance for the month?

Accepted Answer

A) $9,219 U 
B) $10,179 U 
C) $9,867 U 
D) $648 U 
A) $9,219 U 
B) $10,179 U 
C) $9,867 U 
D) $648 U

Question 11

In general,the purchasing agent is responsible for the materials price variance.

Accepted Answer

A) True 
 B)False

Question 12

The standards for product U31 call for 7.1 liters of a raw material that costs $12.10 per liter.Last month,1,900 liters of the raw material were purchased for $23,180.The actual output of the month was 200 units of product U31.A total of 1,200 liters of the raw material were used to produce this output.
Required:
a.What is the materials price variance for the month?
b.What is the materials quantity variance for the month?

Accepted Answer

a.Materials price variance = (AQ @#LAT-DLM& AP)- (

Question 13

Jardell Corporation makes a product with the following standards for labor and variable overhead:   The company budgeted for production of 6,400 units in June, but actual production was 6,400 units. The company used 3,180 direct labor-hours to produce this output. The actual variable overhead rate was $4.90 per hour. The company applies variable overhead on the basis of direct labor-hours.
-The variable overhead efficiency variance for June is:

Accepted Answer

A) $100 F 
B) $98 F 
C) $100 U 
D) $98 U 
A) $100 F 
B) $98 F 
C) $100 U 
D) $98 U

Question 14

Kornfeld Corporation produces metal telephone poles.In the most recent month,the company budgeted production of 2,800 poles.Actual production was 3,200 poles.According to standards,each pole requires 2.2 machine-hours.The actual machine-hours for the month were 6,890 machine-hours.The standard variable manufacturing overhead rate is $9.20 per machine-hour.The actual variable manufacturing cost for the month was $67,020.The variable overhead efficiency variance is:

Accepted Answer

A) $1,380 U 
B) $1,380 F 
C) $2,252 F 
D) $2,252 U 
A) $1,380 U 
B) $1,380 F 
C) $2,252 F 
D) $2,252 U

Question 15

The following labor standards have been established for a particular product:   The following data pertain to operations concerning the product for the last month:

-What is the labor rate variance for the month?

Accepted Answer

A) $400 F 
B) $80 U 
C) $80 F 
D) $400 U 
A) $400 F 
B) $80 U 
C) $80 F 
D) $400 U

Question 16

Arrow Industries uses a standard cost system in which direct materials inventory is carried at standard cost. Arrow has established the following standards for the prime costs of one unit of product.   During May, Arrow purchased 160,000 pounds of direct material at a total cost of $304,000. The total direct labor wages for May were $37,800. Arrow manufactured 19,000 units of product during May using 142,500 pounds of direct material and 5,000 direct labor-hours.
-The direct labor rate variance for May is:

Accepted Answer

A) $2,200 favorable 
B) $1,900 unfavorable 
C) $2,000 unfavorable 
D) $2,090 favorable 
A) $2,200 favorable 
B) $1,900 unfavorable 
C) $2,000 unfavorable 
D) $2,090 favorable

Question 17

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 quantity variance for December is:

Accepted Answer

A) $660 F 
B) $660 U 
C) $627 F 
D) $627 U 
A) $660 F 
B) $660 U 
C) $627 F 
D) $627 U

Question 18

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 efficiency variance for the month?

Accepted Answer

A) $3,192 U 
B) $6,913 F 
C) $7,161 U 
D) $6,913 U 
A) $3,192 U 
B) $6,913 F 
C) $7,161 U 
D) $6,913 U

Question 19

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 materials quantity variance for March is:

Accepted Answer

A) $5,810 F 
B) $5,893 U 
C) $5,893 F 
D) $5,810 U 
A) $5,810 F 
B) $5,893 U 
C) $5,893 F 
D) $5,810 U

Question 20

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 quantity variance for June is:

Accepted Answer

A) $392 U 
B) $392 F 
C) $400 F 
D) $400 U 
A) $392 U 
B) $392 F 
C) $400 F 
D) $400 U

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 should be computed:

The following labor 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 labor rate variance for the month? b.What is the labor efficiency variance for the month?

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 efficiency variance for the month?

In general,the purchasing agent is responsible for the materials price variance.

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

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 efficiency variance for the month?

Managerial Accounting and Cost Concepts

Job-Order Costing

Process Costing

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Activity-Based Costing: a Tool to Aid Decision Making

Profit Planning

Flexible Budgets and Performance Analysis

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Statement of Cash Flows

Financial Statement Analysis

Least-Squares Regression Computations

Appendix B: Cost of Quality

The Predetermined Overhead Rate and Capacity

Further Classification of Labor Costs

Fifo Method

Service Department Allocations

Abc Action Analysis

Using a Modified Form of Activity-Based Costing to Determine Product Costs for External Reports

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variances

Transfer Pricing

Service Department Charges

The Concept of Present Value

Income Taxes in Capital Budgeting Decisions

The Direct Method of Determining the Net Cash Provided by Operating Activities

Pricing Products and Services

Profitability Analysis

Filters

Exam 9: Standard Costs and Variances

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 should be computed:

The following labor 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 labor rate variance for the month? b.What is the labor efficiency variance for the month?

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 efficiency variance for the month?

In general,the purchasing agent is responsible for the materials price variance.

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

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 efficiency variance for the month?

Managerial Accounting and Cost Concepts

Job-Order Costing

Process Costing

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Activity-Based Costing: a Tool to Aid Decision Making

Profit Planning

Flexible Budgets and Performance Analysis

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Statement of Cash Flows

Financial Statement Analysis

Least-Squares Regression Computations

Appendix B: Cost of Quality

The Predetermined Overhead Rate and Capacity

Further Classification of Labor Costs

Fifo Method

Service Department Allocations

Abc Action Analysis

Using a Modified Form of Activity-Based Costing to Determine Product Costs for External Reports

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variances

Transfer Pricing

Service Department Charges

The Concept of Present Value

Income Taxes in Capital Budgeting Decisions

The Direct Method of Determining the Net Cash Provided by Operating Activities

Pricing Products and Services

Profitability Analysis

Filters