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Exam 22: Evaluating Variances From Standard Costs

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Question 61

Multiple Choice

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-The direct labor time variance is

A) $6,000 favorable
B) $6,000 unfavorable
C) $33,000 unfavorable
D) $33,000 favorable

E) All of the above
F) B) and D)

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Question 62

Multiple Choice

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Which of the following would not lend itself to applying direct labor variances?

A) help desk assistant
B) research and development scientist
C) customer service personnel
D) telemarketer

E) All of the above
F) B) and C)

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Question 63

True/False

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Changes in technology, machinery, or production methods may make past cost data irrelevant when setting standards.

Favorable volume variances may be harmful when

If the standard to produce a given amount of product is 500 direct labor hours at $15 and the actual is 600 hours at $17, the rate variance is $1,200 favorable.

If the actual quantity of direct materials used in producing a commodity differs from the standard quantity, the variance is a

The principle of exceptions allows managers to focus on correcting variances between standard costs and actual costs.

While setting standards, managers should never allow for spoilage or machine breakdowns in their calculations.

Standards are more widely used for nonmanufacturing activities than for manufacturing activities.

Which of the following is not a reason for a direct materials quantity variance?

Match each of the following descriptions with the term (a-e) it describes. -An example is the number of customer complaints

Jaxson Corporation has the following data related to direct labor costs for September: actual costs are 10,200 hours at $15.75 per hour and standard costs are 10,800 hours at $15.50 per hour.​What is the direct labor time variance?

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 fixed factory overhead volume variance?

The fact that workers are unable to meet a properly determined direct labor standard is sufficient cause to change the standard.

The unfavorable volume variance may be due to all of the following factors except

Use this information for Stringer Company to answer the questions that follow. ​The following data are given for Stringer Company: ​ Overhead is applied on standard labor hours. -The direct materials quantity variance is

Normal standards allow for normal production difficulties and mistakes.

Match each of the following descriptions with the term (a-e) it describes. -Actual cost < standard cost at actual volumes

Compute the standard cost for one hat, based on the following standards for each hat:

Match each of the following descriptions with the term (a-e) it describes. -Actual cost > standard cost at actual volumes