Exam 9: Standard Costing: a Functional-Based Control Approach

The formula for the fixed overhead spending variance is:

Quantity price standards

Figure 9-4 San Francisco Corporation uses two materials in the production of its product. The materials, X and Y, have the following standards: During April, the following actual production information was provided: Material Actual Mix X 30,000 units Y 20,000 units Yield 36,000 units -Refer to Figure 9-4. What is the materials yield variance?

The unit quantity standards can be used to compute the total amount of inputs allowed for the actual output.

Both manufacturing and service firms may use standard costing systems.

Which of the following is NOT true about Kaizen Standards?

All variances accounts are closed out at the end of the year.

Standard costing

Figure 9-3 Alumni Manufacturing Company has the following information pertaining to a normal monthly activity of 10,000 units: Standard factory overhead rates are based on a normal monthly volume of one standard direct hour per unit. Standard factory overhead rates per direct labor hour are: -Refer to Figure 9-3. What is the variable overhead spending variance for Alumni?

The total budget variances are categorized into price variances and usage variances.

Figure 9-4 San Francisco Corporation uses two materials in the production of its product. The materials, X and Y, have the following standards: During April, the following actual production information was provided: Material Actual Mix X 30,000 units Y 20,000 units Yield 36,000 units -Refer to Figure 9-4. What is the materials usage variance?

Price/rate variances focus on the differences between

Organics Corporation uses two different types of labor to manufacture its product. The types of labor, Cutting and Setup, have the following standards: During July, the following actual production information was provided: Labor Type Actual Mix Cutting 3,500 hours Setup 1,500 hours Yield 22,500 units Required: Calculate the labor mix and yield variances.

During October, 10,000 direct labor hours were worked at a standard cost of $10 per hour. If the direct labor rate variance for October was $4,000 unfavorable, the actual cost per direct labor hour must be

The costing that establishes price and quantity standards for inputs is called costing.

Figure 9-2 Bodacious Corporation produced 100 units of Product AA. The total standard and actual costs for materials and direct labor for the 100 units of Product AA are as follows: Materials: Standard Actual Standard: 200 pounds at $3.00 per pound $600 Actual: 220 pounds at $2.85 per pound $627 Direct labor: Standard: 400 hours at $15.00 per hour 6,000 Actual: 368 hours at $16.50 per hour 6,072 -A materials price variance would NOT be caused by

Montana Company uses a standard costing system. The following information pertains to direct labor costs for the month of February: Standard direct labor rate per hour $15.00 Actual direct labor rate per hour $13.50 Labor rate variance $18,000 favorable Actual output 1,000 units Standard hours allowed for actual production 10,000 hours What is the total labor budget variance for Montana Company?

During September, 12,000 pounds of materials were purchased at a cost of $8 per pound. If there was an unfavorable direct materials price variance of $6,000 for June, the standard cost per pound must be

All of the following are true of currently attainable standards EXCEPT

The following information is provided about three materials utilized in the production of a product: Material Standard Mix Standard Unit Price Standard Cost X 1,250 units $3.00 per unit $3,750 Y 750 units 5.00 per unit $3,750 Z 500 units 4.00 per unit $2,000 Yield 2,250 units During May, the following actual production information was provided: Material Actual Mix X 10,000 units Y 5,000 units Z 2,500 units Yield 15,000 units What is the Material yield variance.