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Exam 22: Evaluating Variances From Standard Costs

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Question 41

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Standard costs are divided into which of the following components?

A) variance standard and quantity standard
B) materials standard and labor standard
C) quality standard and quantity standard
D) price standard and quantity standard

E) B) and C)
F) A) and C)

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verified

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Question 42

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Standard cost variances are usually not reported in reports to stockholders.

A) True
B) False

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Question 43

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Currently attainable standards do not allow for reasonable production difficulties.

-Calculate the direct labor time variance.

-The direct labor rate variance is

Though favorable fixed factory overhead volume variances are usually good news, if inventory levels are too high, additional production could be harmful.

Define ideal and currently attainable standards. Which type of standard should be used and why?

Standard costs are a useful management tool that can be used solely as a statistical device apart from the ledger or they can be incorporated in the accounts.

Use this information to answer the questions that follow. ​ *Actual hours are equal to standard hours for units produced.​ -The fixed factory overhead volume variance is

What is the variable factory overhead controllable variance?

Use this information for Taylor Company to answer the questions that follow. ​ The following data are given for Taylor Company: ​ Overhead is applied based on standard labor hours. ​ -Standard and actual costs for direct materials for the manufacture of 1,000 units of product were as follows:Actual costs1,550 lb. at $9.10Standard costs1,600 lb. at $9.00​Determine the direct materials (a) quantity variance, (b) price variance, and (c) total cost variance.​

Use this information for Zoyza Company to answer the questions that follow. ​ The following data are given for Zoyza Company: ​ Overhead is applied on standard labor hours. ​​ -The fixed factory overhead volume variance is

-The direct labor time variance is

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual is 800 units at $12, the direct materials quantity variance is $2,200 unfavorable.

If the actual direct labor hours spent producing a commodity differ from the standard hours, the variance is a

Standard costs should always be revised when they differ from actual costs.

Oak Company produces a chair that requires 6 yards of material per unit. The standard price of one yard of material is $7.50. During the month, 8,500 chairs were manufactured, using 48,875 yards.​Journalize the entry to record the standard direct materials used in production.

Use this information to answer the questions that follow. ​ The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory overhead) based on 100% of normal capacity of 30,000 direct labor hours. The standard cost and the actual cost of factory overhead for the production of 5,000 units during May were as follows: ​​ -What is the variable factory overhead controllable variance?

Titus Company produced 8,900 units of a product that required 3.25 standard hours per unit. The standard fixed overhead cost per unit is $1.20 per hour at 29,000 hours, which is 100% of normal capacity.? Determine the fixed factory overhead volume variance.

Volume variance measures the use of fixed factory overhead resources.