Exam 3: Standard Costs and Variances

Pardoe, Inc., manufactures a single product in which variable manufacturing overhead is assigned on the basis of standard direct labor-hours. The company uses a standard cost system and has established the following standards for one unit of product: During March, the following activity was recorded by the company: • The company produced 3,000 units during the month. • A total of 8,000 pounds of material were purchased at a cost of $23,000. • There was no beginning inventory of materials on hand to start the month; at the end of the month, 2,000 pounds of material remained in the warehouse. • During March, 1,600 direct labor-hours were worked at a rate of $6.50 per hour. • Variable manufacturing overhead costs during March totaled $1,800. The direct materials purchases variance is computed when the materials are purchased. -The materials quantity variance for March 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: What is the materials quantity variance for the month?

Gilder 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 materials price variance for June is:

The Maxwell Corporation has a standard costing system in which variable manufacturing overhead is assigned to production on the basis of standard machine-hours. The following data are available for July: • Actual variable manufacturing overhead cost incurred: $22,620 • Actual machine-hours worked: 1,600 hours • Variable overhead rate variance: $3,420 Unfavorable • Total variable overhead spending variance: $4,620 Unfavorable -The variable overhead efficiency variance for July is:

Taccone Corporation makes a product that has the following direct labor standards: In February the company produced 4,100 units using 1,120 direct labor-hours. The actual direct labor rate was $20.40 per hour. -The labor efficiency variance for February is:

Berends Corporation makes a product with the following standard costs: The company reported the following results concerning this product in April. 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 April 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 efficiency variance for the month?