Exam 10: Standard Costs for Control: Direct Material and Direct Labour

The following data relates to QA firm: Cost standards: Actual results: 7 800 units were produced Calculate the direct labour rate variance.

Jasmine Morron is examining a statistical control chart on the recent cost report of her manufacturing company.Jasmine is focusing on one specific process,the labour efficiency variance of polishing.She determines that the critical values for this process are $1000.Which of the following statements is correct?

In general,it is felt that theoretical standards do not motivate employees to achieve goals,as employees are aware that the standards set are virtually impossible to achieve.

A direct labour efficiency variance cannot be caused by:

Dexter Surgical Tools has set the following direct labour standard: 0.5 hours at $20 per hour,for each unit of Tool #11.The company plans to produce 1200 units of Tool #11 in July;however,the actual production was 1000 units and only 900 units were actually sold.The actual labour cost for July was $22 per hour.The labour efficiency variance for July was:

Jay Bole is in the process of developing a standard for the labour cost of one unit of Product X.According to the design manual,it takes a skilled worker 30 minutes to produce one unit of Product X when the workshop is operating at peak condition.However,Product X is quite complex,and even a skilled worker operating in high efficiency often needs another 5 minutes to adjust the tools,re-oil the machine,and rework some aspects of the product.A skilled worker is paid $30 per hour,while the company pays 20% on-costs on top of this.Jay decides to develop a practical standard.The standard labour cost for one unit of Product X is:

A company using a standard costing system uses an actual quantity of 520 direct labour hours at an actual cost of $5.90 per hour.The direct labour hours quantity allowed was 500 hours at a standard cost of $6.00 per hour.What is the cost of direct labour that would appear in work in process inventory?

Variances are used for control purposes by highlighting problem areas,such as using too many materials,so that corrective action can be taken.

Flexer Company Ltd has set the following standards for the production of one unit of product.Normal production each month is 500 units.During June,actual production amounted to 420 units.All direct material was purchased and used this month.Actual cost amounted to: Determine the direct material price for June production.

Which of the following statements is/are true?

Flexer Company Ltd has set the following standards for the production of one unit of product.Normal production each month is 500 units.During June,actual production amounted to 420 units.All direct material was purchased and used this month.Actual cost amounted to: Determine the standard direct labour hours allowed for June production.

A department's budgeted output for a 4-week period was 500 units at a standard cost of $100 per unit.The actual production was 450 units and the firm's ledger revealed actual costs for the month to be $50 200.The standard production cost for the period is:

Production managers are usually in the best position to influence labour rates,labour usage and material prices.

The following data relates to QA firm: Cost standards: Actual results: 7 800 units were produced Calculate the direct material price variance,based on the quantity of materials purchased.

Flexer Company Ltd has set the following standards for the production of one unit of product.Normal production each month is 500 units.During June,actual production amounted to 420 units.All direct material was purchased and used this month.Actual cost amounted to: Determine the standard material quantity allowed for June production.

A material price variance of $5000 (unfavourable)for a period has been calculated.The actual unit price was $9.00.The actual quantity of material used was 6000.The standard quantity of materials was 5000.Calculate the standard unit price for a unit of raw materials for the period (round where necessary).

Under a standard costing system:

Given the following information,calculate the direct labour rate variance:

A company using a standard costing system uses an actual quantity of 1100 kg of material at an actual cost of $1.20 per kg.The standard quantity allowed was 1000 kg at a standard cost of $1.00 per kg.After the goods are completed and transferred from work in process inventory,what is the cost of direct material that would appear in finished goods inventory?

Which of the following could not be an explanation of the labour efficiency variance for a firm whose variances for the period included an unfavourable material price variance and a favourable labour efficiency variance?