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

Artigas Enterprises uses two materials in the production of its product. The materials, L and M, have the following standards: During January, the following actual production information was provided: Material Actual Mix L 15,000 units M 10,000 units Yield 18,000 units What is the materials mix variance?

Formidable Company collected the following information: Standard costs per unit: Variable overhead 4 machine hours @ $6 per machine hour Fixed overhead 4 machine hours @ $10 per machine hour Actual output 20,000 units Denominator (normal capacity) output 21,000 units Actual machine hours 79,000 machine hours Actual variable overhead cost $540,000 Actual fixed overhead cost $810,000 Using the three variance method, what is the spending variance?

All variances accounts are at the end of the operating year.

Which of the following equations measures the total budget variance?

Croissant Company's standard fixed overhead cost is $6 per direct labor hour based on budgeted fixed costs of $600,000. The standard allows 1 direct labor hour per unit. During 2016, Croissant produced 110,000 units of product, incurred $630,000 of fixed overhead costs, and recorded 212,000 actual hours of direct labor. What is Croissant's fixed overhead volume variance for 2016?

If the actual labor rate exceeds the standard labor rate and the actual labor hours exceed the number of hours allowed, the labor rate variance and labor efficiency variance will be Labor Rate Variance Labor Efficiency Variance

The following information is provided about three materials utilized in the production of a product: Material Standard Mix Standard Unit Price Standard Cost X 2,500 units $3.00 per unit $7,500 Y 1,500 units 5.00 per unit $7,500 Z 1,000 units 4.00 per unit $4,000 Yield 4,500 units During May, the following actual production information was provided: Yield 30,000 units Required: Calculate the materials mix and yield variances.

The sum of the standard plus allowable deviation is called the upper .

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 -The standard plus the allowable deviation is called the:

The standard overhead cost assigned to each unit of product manufactured is called the

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 -Refer to 9-2. What is the labor efficiency variance for Bodacious Corporation?

The usage variances focus on the difference between

Colina Production Company uses a standard costing system. The following information pertains to 2016. Direct labor hours is the driver used to assign overhead costs to products. Actual production 5,500 units Actual factory overhead costs ($16,500 is fixed) $40,125 Actual direct labor costs (11,250 hours) $131,625 Standard direct labor for 5,500 units: Standard hours allowed 11,000 hours Labor rate $12.00 The factory overhead rate is based on an activity level of 10,000 direct labor hours. Standard cost data for 5,000 units is as follows: Variable factory overhead $22,500 Fixed factory overhead 13,500 Total factory overhead $36,000 What is the fixed overhead volume variance for Colina Production Company?

In setting price standards, the purchasing manager must consider

The variable overhead efficiency variance measures the change in variable overhead consumption due to efficient or inefficient use of the activity driver used to assign overhead costs to products.

Total fixed overhead budget variance is always equal to

Formidable Company collected the following information: Standard costs per unit: Variable overhead 4 machine hours @ $6 per machine hour Fixed overhead 4 machine hours @ $10 per machine hour Actual output 20,000 units Denominator (normal capacity) output 21,000 units Actual machine hours 79,000 machine hours Actual variable overhead cost $540,000 Actual fixed overhead cost $810,000 Using the two variance method, what is the budget variance?

Biscuit Company has developed the following standards for one of its products. Direct labor hours is the driver used to assign overhead costs to products. Direct materials: 10 pounds × $3 per pound Direct labor: 2.5 hours × $8 per hour Variable manufacturing overhead: 2.5 hours × $2 per hour The following activity occurred during the month of June: Materials purchased: 125,000 pounds at $2.60 per pound Materials used: 110,000 pounds Units produced: 10,000 units Direct labor: 24,000 hours at $7.50 per hour Actual variable manufacturing overhead: $51,000 The company records materials price variances at the time of purchase. The direct labor efficiency variance is

The San Jose Corporation uses two materials in the production of its product. The materials, G and H, have the following standards: During June, the following actual production information was provided: Material Actual Mix G 45,000 units H 30,000 units Yield 54,000 units What is the materials yield variance?

Mozambique Industries uses two different types of labor to manufacture its product. The types of labor, Cutting and Setup, have the following standards: During September, the following actual production information was provided: Labor Type Actual Mix Cutting 7,000 hours Setup 3,000 hours Yield 42,000 units Required: Calculate the labor mix and yield variances.