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Exam 13: Budgeting and Standard Cost Systems

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Question 1

Multiple Choice

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The following data relate to direct labor costs for the current period: What is the direct labor rate variance?

A) $2,250.00 unfavorable
B) $2,187.50 unfavorable
C) $2,250.00 favorable
D) $2,187.50 favorable

E) B) and C)
F) B) and D)

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Question 2

Multiple Choice

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Principal components of a master budget include which of the following?

A) Production budget
B) Sales budget
C) Capital expenditures budget
D) All of these

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

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D

Question 3

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The standard costs and actual costs for direct materials,direct labor,and factory overhead for the manufacture of 2,500 units of product are as follows: Variable cost @ $2 per hour Total variable cost,$18,000 Fixed cost @ $0.80 per hour Total fixed cost,$8,000 -The amount of the direct labor rate variance is

The first budget to be prepared is usually the sales budget.

The following data relate to direct labor costs for the current period: -What is the direct labor rate variance?

Assuming that the standard fixed overhead rate is based on full capacity,the cost of available but unused productive capacity is indicated by the

Efficient Corporation uses a standard cost system.The following information was provided for the period that just ended: -The direct labor time variance is

Nonmanufacturing activities are usually controlled using a static budget rather than a standard costing system.

If the price paid per unit differs from the standard price per unit for direct materials,the variance is termed

Efficient Corporation uses a standard cost system.The following information was provided for the period that just ended: -The direct labor rate variance is

The variance from standard for factory overhead cost resulting from operating at a level above or below 100% of normal capacity is termed volume variance.

Budgets are normally used by both profit-making businesses and nonprofit organizations.

The controllable variance measures

The following data relate to direct labor costs for the current period: -What is the direct labor time variance?

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% 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 amount of the fixed factory overhead volume variance?

The variance from standard for factory overhead resulting from incurring a total amount of factory overhead cost that is greater or less than the amount budgeted for the level of operations achieved is termed controllable variance.

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

Flexible budgeting builds the effect of changes in level of activity into the budget system.

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual was 800 units at $12,the direct materials price variance was $800 favorable.

Based on the following production and sales data of Jackson Co.for March of the current year,prepare (a)a sales budget and (b)a production budget.