Exam 9: Standard Costs and Variances

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 efficiency variance for May is:

Johnny Corporation makes a product that uses a material with the following standards: The company budgeted for production of 9,500 units in April, but actual production was 9,600 units. The company used 85,400 kilos of direct material to produce this output. The company purchased 91,900 kilos of the direct material at $1.10 per kilo. The direct materials purchases variance is computed when the materials are purchased. -The materials quantity variance for April 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.

Generally speaking,it is the responsibility of the production department to see that material usage is kept in line with standards.

Furson Corporation makes a single product.In a recent period 6,500 units were made and there was an unfavorable labor efficiency variance of $26,000.Direct labor workers were paid $8 per hour and total wages were $182,000.The labor rate variance was zero.The standard labor-hours per unit of output is closest to:

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 variable overhead rate variance for November is:

The following data have been provided by Spraglin Corporation,a company that produces forklift trucks: Supplies cost is an element of variable manufacturing overhead.The variable overhead efficiency variance for supplies cost is:

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 materials price variance for August is:

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 materials price variance for May is:

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 labor 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 rate variance for October is:

The following data have been provided by Pollo Corporation: Lubricants and supplies are both elements of variable manufacturing overhead. -The variable overhead rate variance for supplies is closest to:

The purchasing agent of the Clampett Company ordered materials of lower quality in an effort to economize on price and in response to the demands of the production manager due to a mistake in production scheduling.The materials were shipped by airfreight at a rate higher than that ordinarily charged for shipment by truck,resulting in an unfavorable materials price variance.The lower quality material proved to be unsuitable on the production line and resulted in excessive waste.In this situation,who should be held responsible for the materials price and quantity variances?

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 materials price variance is:

The following data have been provided by Augustave Corporation: Indirect labor and power are both elements of variable manufacturing overhead. -The variable overhead rate variance for power is closest to:

Schlager 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. 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.

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 variable overhead rate variance for August is:

The Cox Company uses standard costing.The following data are available for April: The standard quantity of material allowed for April production is: