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

Using more highly skilled direct laborers might affect which of the following variances?

Fixed manufacturing overhead was budgeted at $105,000, and 25,000 direct labor hours were budgeted. If the fixed overhead volume variance was $4,000 unfavorable and the fixed overhead spending variance was $1,500 favorable, fixed manufacturing overhead applied must be

If variable manufacturing overhead is applied based on direct labor hours and there is an unfavorable direct labor efficiency variance

A five-percent wage increase for all factory employees would affect which of the following variances?

The unit standard cost is

Production of a product utilizes materials D, E, and F. The following are their standards: During August, the following actual production information was provided: Material Actual Mix D 37,000 units E 17,000 units F 7,000 units Yield 50,000 units Required: Calculate the materials mix, yield, and usage variances.

Which of the following factors would cause an unfavorable labor rate variance?

Firecracker Company has developed the following standards for one of its products. Direct materials: 15 pounds × $16 per pound Direct labor: 4 hours × $24 per hour Variable manufacturing overhead: 4 hours × $14 per hour The following activity occurred during the month of October: Materials purchased: 10,000 pounds costing $170,000 Materials used: 7,200 pounds Units produced: 500 units Direct labor: 2,300 hours at $23.60/hour Actual variable manufacturing overhead: $30,000 The company records materials price variances at the time of purchase. The direct materials price variance is

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 How many actual labor hours were worked during February for Montana Company?

If actual fixed manufacturing overhead was $55,000 and there was a $1,400 unfavorable spending variance and a $1,000 unfavorable volume variance, budgeted fixed manufacturing overhead must have been

Which is NOT an acceptable method of disposing of variances?

The Awesome Systems Company, which uses direct labor hours to assign overhead costs to products, developed the following standard cost for one of their products: STANDARD COST CARD PER UNIT Materials: 10 pounds × $8 per pound $80.00 Direct labor: 3 hours × $32 per hour 96.00 Variable manufacturing overhead: $20 per direct labor hour ? Fixed manufacturing overhead ? Total standard cost per unit ? The following information is available regarding the company's operations for the period: Units produced: 15,000 Materials purchased: 180,000 pounds @ $7.20 per pound Materials used: 160,000 pounds Direct labor: 18,000 hours @ $37.00 per hour Manufacturing overhead incurred: Variable $880,000 Fixed $2,560,000 Budgeted fixed manufacturing overhead for the period is $4,800,000, and expected capacity for the period is 60,000 direct labor hours. Required: a. Calculate the standard fixed manufacturing overhead rate. b. Complete the standard cost card for the product.

A yield variance occurs when the actual output is the same as the standard output.

Which of the following equations measures a price variance?

The most detailed method to compute overhead variances is the four-variance method.

Rowing Company has developed the following standards for one of its products: Direct materials: 7 pounds × $8 per pound Direct labor: 2 hours × $12.50 per hour Variable manufacturing overhead: 2.5 hours × $7 per hour The following activity occurred during the month of March: Materials purchased: 5,000 pounds costing $42,500 Materials used: 3,600 pounds Units produced: 500 units Direct labor: 1,150 hours at $11.80/hour Actual variable manufacturing overhead: $7,500 The company records materials price variances at the time of purchase. The variable standard cost per unit is

The condition where everything operates perfectly and demands maximum efficiency is called __________ .

Figure 9-1 Bender 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: 210 pounds at $3.00 per pound $630 Actual: 240 pounds at $2.85 per pound $684 Direct labor: Standard: 400 hours at $15.00 per hour 6,000 Actual: 368 hours at $16.50 per hour 6,072 -Refer to Figure 9-1. What is the material price variance for Bender Corporation?

standards are the standards used for continuous improvement.

During September, 40,000 units were produced. The standard quantity of material allowed per unit was 5 pounds at a standard cost of $2.50 per pound. If there was a favorable usage variance of $25,000 for September, the actual quantity of materials used must have been