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Exam 7: Performance Evaluation Using Variances From Standard Costs

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Question 41

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The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are as follows: The amount of the direct materials quantity variance is:

A) $875 favorable
B) $800 unfavorable
C) $800 favorable
D) $875 unfavorable

E) None of the above
F) A) and D)

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Question 42

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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: The amount of the direct labor time variance is:

A) $1,180 favorable
B) $1,140 unfavorable
C) $1,180 unfavorable
D) $1,140 favorable

E) A) and B)
F) None of the above

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Question 43

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The standard price and quantity of direct materials are separated because:

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows: The amount of the total factory overhead cost variance is:

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.

Standard and actual costs for direct labor for the manufacture of 1,000 units of product were as follows:

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 unfavorable.

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

An example of a nonfinancial measure is the number of customer complaints.

A company must choice either a standard system or nonfinancial performance measures to evaluate the performance of a company.

Cost systems using detailed estimates of each element of manufacturing cost entering into the finished product are called standard cost systems.

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.

Japan Company produces lamps that require 2.25 standard hours per unit at an hourly rate of $15.00 per hour. If 7,700 units required 19,250 hours at an hourly rate of $14.90 per hour, what is the direct labor (a) rate variance, (b) time variance, and (c) cost variance?

Standards are designed to evaluate price and quantity variances separately.

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

The principle of exceptions allows managers to

The St. Augustine Corporation originally budgeted for $360,000 of fixed overhead at 100% production capacity. Production was budgeted to be 12,000 units. The standard hours for production were 5 hours per unit. The variable overhead rate was $3 per hour. Actual fixed overhead was $360,000 and actual variable overhead was $170,000. Actual production was 11,700 units. Compute the factory overhead volume variance.

Calculate the Total Direct Materials cost variance using the above information:

The total manufacturing cost variance consists of:

Trumpet Company produced 8,700 units of product that required 3.25 standard hours per unit. The standard variable overhead cost per unit is $4.00 per hour. The actual variance factory overhead was $111,000. Determine the variable factory overhead controllable variance.