Exam 10: Standard Costs and Operating Performance Measures

A manufacturing company that has only one product has established the following standards for its variable overhead.The company uses direct labor-hours (DLHs) as its measure of activity. The following data pertain to operations for the last month: -What is the variable overhead rate variance for the month?

The following data pertain to last month's operations: Required: a.What was the labor rate variance for the month? b.What was the labor efficiency variance for the month? Answer: a.Labor rate variance = (AH * AR) - (AH * SR) = $76,995 - (5,900 * $12.10) = $5,605 U b.Labor efficiency variance = SR(AH - SH*) = $12.10 (5,900 - 5,920) = $242 F *SH = Standard hours per unit * Actual output = 4.0 * 1,480 = 5,920 -The standards for product M74M specify 2.5 direct labor-hours per unit at $13.20 per direct labor-hour.Last month 3,160 units of product M74M were produced using 8,100 direct labor-hours at a total direct labor wage cost of $104,085. Required: a.What was the labor rate variance for the month? b.What was the labor efficiency variance for the month?

The following data pertain to operations concerning the product for the last month: 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) = $139,400 - (8,500 * $15.60) = $6,800 U b.SQ = Standard quantity per unit * Actual output = 5.2 * 1,640 = 8,528 Materials quantity variance = SP(AQ - SQ) = $15.60(8,200 - 8,528) = $5,117 F -Why is the total materials variance divided into a price variance and a quantity variance?

Albro Corporation keeps careful track of the time required to fill orders.The times recorded for a particular order appear below: -The manufacturing cycle efficiency (MCE) was closest to:

Galimba Corporation,which produces commercial windows,has provided the following data: -The variable overhead rate variance for supplies is closest to:

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?

The following data have been provided by Hanover Corporation,a company that produces forklift trucks: The variable overhead efficiency variance for supplies cost is:

During the most recent month at Hybarger Corporation,queue time was 3.0 days,inspection time was 0.8 day,process time was 2.8 days,wait time was 11.8 days,and move time was 0.6 day. Required: a.Compute the throughput time. b.Compute the manufacturing cycle efficiency (MCE). c.What percentage of the production time is spent in non-value-added activities? d.Compute the delivery cycle time.

The production manager is usually held responsible for the labor efficiency variance.

The Apoundright Company uses standard costing and has established the following standards for its single product: Direct materials: 2 gallons at $3 per gallon Direct labor: 0.5 hours at $8 per hour Variable overhead: 0.5 hours at $2 per hour During November,the company made 4,000 units and incurred the following costs: Direct materials purchased: 8,100 gallons at $3.10 per gallon Direct materials used: 7,600 gallons Direct labor used: 2,200 hours at $8.25 per hour Actual variable overhead: $4,175 The company applies variable overhead to products on the basis of standard direct labor-hours. -The materials quantity variance for November was:

A favorable labor rate variance indicates that

Cox Company's direct material costs for the month of January were as follows: For January there was a favorable direct materials quantity variance of:

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? Answer: Variable overhead rate variance = (AH * AR) - (AH* SR) = $142,245 - (8,700 * $16.05) = $2,610 U SH = Standard hours per unit * Actual output = 3.3 * 2,600 = 8,580 Variable overhead efficiency variance = SR(AH - SH) = $16.05(8,700 - 8,580) = $1,926 U -Calcagno Corporation's variable overhead is applied on the basis of direct labor-hours.The company has established the following variable overhead standards for product B47W:

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 efficiency variance for the month?

The following data pertain to operations concerning the product for the last month: What is the materials quantity variance for the month? A.$15,240 U B.$6,350 U <underLine>C.</underLine> $14,340 U D.$5,975 U SQ = 1,000 * 5.1 = 5,100 Materials quantity variance = SP (AQ - SQ) = $11.95 (6,300 - 5,100) = $14,340 U -The following materials standards have been established for a particular product:

Osier Corporation,which produces cellular transmission towers,has provided the following data: -The variable overhead efficiency variance for power is:

The following data pertain to operations concerning the product for the last month: What is the labor rate variance for the month? A.$2,955 F B.$4,935 F C.$2,955 U <underLine>D.</underLine> $1,890 U AR = $103,635 / 6,300 = $16.45 Direct labor rate variance = AH (AR - SR) = 6,300 ($16.45 - $16.15) = $1,890 U -Direct labor standards at Cepeda Manufacturing Corporation allow 5 direct labor-hours for every unit produced.The standard direct labor rate is $12.00 per hour.During the month of February,Cepeda incurred 35,000 direct labor-hours and recorded a $15,000 favorable labor efficiency variance.How many units did Cepeda produce during February?

Kronstedt 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?

The total variable overhead variance (including both the rate and efficiency variances) for November was:

Misemer Corporation is developing standards for its products.One product requires an input that is purchased for $57.00 per kilogram from the supplier.By paying cash,the company gets a discount of 8% off this purchase price.Shipping costs from the supplier's warehouse amount to $3.60 per kilogram.Receiving costs are $0.26 per kilogram.The standard price per kilogram of this input should be: