Exam 10: Standard Costs and Operating Performance Measures

Purchase of poor quality materials will generally result in a favorable materials price variance and an unfavorable labor rate variance.

The following data pertain to operations concerning the product for the last month: What is the labor efficiency variance for the month? <underLine>A.</underLine> $5,955 U B.$9,240 U C.$9,240 F D.$6,090 U SH = 5.0 * 1,400 = 7,000 Direct labor efficiency variance = SR (AH - SH) = $19.85 (7,300 - 7,000) = $5,955 U -The following labor standards have been established for a particular product:

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? Answer: a.Materials price variance = (AQ * AP) - (AQ * SP) = $82,680 - (5,200 * $15.50) = $2,080 U b.Materials quantity variance = SP(AQ - SQ*) = $15.50(4,600 - 4,752) = $2,356 F *SQ = Standard quantity per unit * Actual output = 2.7 *1,760 = 4,752 -The standards for product J35 call for 1.0 pounds of a raw material that costs $15.60 per pound.Last month,5,700 pounds of the raw material were purchased for $90,345.The actual output of the month was 5,280 units of product J35.A total of 5,200 pounds 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?

The management of Granger Sports Equipment has been maintaining delivery performance data in order to improve the company's customer service.Data for the most recent month follows: -What is the Process Time?

The Upton Company uses a standard costing system in which variable overhead is assigned to production on the basis of standard direct labor-hours.Data for the month of February include the following: $\bullet$ Variable overhead cost incurred: $48,700 $\bullet$ Total variable overhead variance: $300 F $\bullet$ Standard hours allowed for actual production: 7,000 $\bullet$ Actual direct labor-hours worked: 6,840 -The standard variable overhead rate per direct labor-hour is:

Lido Company's standard and actual costs per unit for the most recent period,during which 400 units were actually produced,are given below: Required: From the foregoing information,compute the following variances.Show whether the variance is favorable (F) or unfavorable (U): a.Materials price variance. b.Materials quantity variance. c.Direct labor rate variance. d.Direct labor efficiency variance. e.Variable overhead rate variance. f.Variable overhead efficiency variance.

Couey Corporation,which produces highway lighting poles,has provided the following data: -The variable overhead efficiency variance for supplies is:

Czepiel Corporation is developing standards for its products.One product requires an input that is purchased for $48.00 per kilogram from the supplier.By paying cash,the company gets a discount of 9% off this purchase price.Shipping costs from the supplier's warehouse amount to $2.84 per kilogram.Receiving costs are $0.59 per kilogram. Required: Determine the standard price per kilogram of this input.Show your work!

The labor efficiency variance for November was:

A favorable materials price variance coupled with an unfavorable material usage variance would most likely result from:

Sifford Corporation,which makes landing gears,has provided the following data for a recent month: Required: Determine the rate and efficiency variances for the variable overhead item supplies and indicate whether those variables are favorable or unfavorable.Show your work!

The following data have been provided by Dicus Corporation: -The variable overhead rate variance for lubricants is closest to:

Management by exception means that a manager's attention is directed toward those parts of the organization where things are not proceeding according to plans.

The following materials standards have been established for a particular product:

Quantity standards indicate how much of an input should be used for manufacturing a unit of product or in providing a unit of service.

The following data for January have been provided by Hillin Corporation,a producer of precision drills for oil exploration: Required: Compute the variable overhead rate variances for indirect labor and for power for January.Indicate whether each of the variances is favorable (F) or unfavorable (U).Show your work!

The Clark Company makes a single product and uses standard costing.Some data concerning this product for the month of May follow: -The actual direct labor rate for May in dollars per hour was closest to:

Mackessy Corporation applies manufacturing overhead to products on the basis of standard machine-hours.Budgeted and actual variable overhead costs for the most recent month appear below: The original budget was based on 7,400 machine-hours.The company actually worked 7,620 machine-hours during the month and the standard hours allowed for the actual output were 7,730 machine-hours.What was the overall variable overhead efficiency variance for the month?

Reenu Company manufactures wigs out of used dental floss.The variable cost standards for wig production developed by Reenu are as follows: Variable overhead at Reenu is based on direct labor-hours.The actual results for the month of October were as follows: -What is Reenu's variable overhead rate variance for October?

Dezan Corporation is developing direct labor standards.A particular product requires 0.90 direct labor-hours per unit.The allowance for breaks and personal needs is 0.04 direct labor-hours per unit.The allowance for cleanup,machine downtime,and rejects is 0.13 direct labor-hours per unit. Required: Determine the standard direct labor-hours per unit of product.Show your work!