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

The variances that focus on the difference between actual quantity and standard quantity are called the variances.

Somalian Corporation uses a standard costing system. Information for the month of May is as follows: Actual manufacturing overhead costs ($26,000 is fixed) $80,000 Direct labor: Actual hours worked 12,000 hrs. Standard hours allowed for actual production 10,000 hrs. Average actual labor cost per hour $18 The factory overhead rate is based on a normal volume of 12,000 direct labor hours. Standard cost data at 12,000 direct labor hours were as follows:

During January, 7,175 direct labor hours were worked at a standard cost of $20 per hour. If the direct labor rate variance for January was $17,500 favorable, the actual cost per direct labor hour must be

LaPointe Corporation uses two different types of labor to manufacture its product. The types of labor, Cutting and Setup, have the following standards: Yield 5,000 units During January, the following actual production information was provided: Labor Type Actual Mix Cutting 7,000 hours Setup 3,000 hours Yield 45,000 units Required: Calculate the labor efficiency and mix and yield variances.

The standard cost sheet includes all of the following EXCEPT

Sparingly Manufacturing has developed the following standards for one of its products. STANDARD VARIABLE COST CARD One Unit of Product Materials: 5 yards × $6 per yard $30.00 Direct labor: 2 hours × $8 per hour 16.00 Variable manufacturing overhead: 2 hours × $5 per hour 10.00 Total standard variable cost per unit $56.00 The company records materials price variances at the time of purchase. The following activity occurred during the month of December: Materials purchased: 5,200 yards costing $29,900 Materials used: 4,750 yards Units produced: 1,000 units Direct labor: 2,100 hours costing $17,850 Required: a. Calculate the direct materials price variance. b. Calculate the direct materials usage variance. c. Calculate the direct labor rate variance. d. Calculate the direct labor efficiency variance.

Malkovich Company uses a standard costing system. The following information pertains to direct materials for the month of July: Standard price per lb. $18.00 Actual purchase price per lb. $16.50 Quantity purchased 3,100 lbs. Quantity used 2,950 lbs. Standard quantity allowed for actual output 3,000 lbs. Actual output 1,000 units Malkovich Company reports its material price variances at the time of purchase. What is the material usage variance for Malkovich Company?

During November, 10,000 units were produced. The standard quantity of material allowed per unit was 10 pounds at a standard cost of $3 per pound. If there was an unfavorable usage variance of $18,750 for November, the actual quantity of materials used must be

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 fixed overhead spending variance for Alumni?

Variances indicate

In standard costing, overhead is applied to a product by debiting work in process and crediting variable and fixed overhead control accounts.

The standard cost sheet includes all of the following EXCEPT

A mix variance is

Harrangue Company's standard variable overhead rate is $6 per direct labor hour, and each unit requires 2 standard direct labor hours. During March, Harry recorded 6,000 actual direct labor hours, $37,000 actual variable overhead costs, and 2,900 units of product manufactured. What is the total variable overhead variance for March for Harrangue?

Fixed manufacturing overhead was budgeted at $200,000, and 25,000 direct labor hours were budgeted. If the fixed overhead volume variance was $8,000 favorable and the fixed overhead spending variance was $6,000 unfavorable, fixed manufacturing overhead applied must be

Montecino Corporation uses two different types of labor to manufacture its product. The types of labor, Cutting and Setup, have the following standards: Labor Type Standard Mix Standard Unit Price Standard Cost Cutting 500 hours $7.50 per unit $3,750 Setup 125 hours 5.00 per unit $ 625 Yield 3,125 units During July, the following actual production information was provided: Labor Type Actual Mix Cutting 4,375 hours Setup 1,875 hours Yield 28,125 units What is the Labor mix variance?

Malkovich Company uses a standard costing system. The following information pertains to direct materials for the month of July: Standard price per lb. $18.00 Actual purchase price per lb. $16.50 Quantity purchased 3,100 lbs. Quantity used 2,950 lbs. Standard quantity allowed for actual output 3,000 lbs. Actual output 1,000 units Malkovich Company reports its material price variances at the time of purchase. What is the standard quantity of direct materials per unit for Malkovich Company?

The following condition which demands maximum efficiency and can be achieved only if everything operates perfectly is called:

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 mix variance?

A mix variance is created whenever the actual mix of inputs is equal to the standard mix.