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Exam 22: Performance Evaluation Using Variances From Standard Costs

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Question 61

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

A) variable variance
B) controllable variance
C) price variance
D) volume variance

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Question 62

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0 Calculate the Direct Materials Quantity variance using the above information:

A) $4,512.50 Unfavorable
B) $4,512.50 Favorable
C) $4,750 Unfavorable
D) $4,750 Favorable

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Question 63

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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: 0 What is the amount of the factory overhead controllable variance?

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.

The formula to compute direct materials price variance is to calculate the difference between

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

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

Since the controllable variance measures the efficiency of using variable overhead resources, if budgeted variable overhead exceeds actual results, the variance is favorable.

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.

A variable cost system is an accounting system where standards are set for each manufacturing cost element.

Standard costs are divided into which of the following components?

The following data is given for the Zoyza Company: Overhead is applied on standard labor hours. The factory overhead volume variance is:

Standard costs can be used with both the process cost and job order cost systems.

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 controllable variance.

The most effective means of presenting standard factory overhead cost variance data is through a factory overhead cost variance report.

Non-financial measures are often lined to the inputs or outputs of an activity or process.

The Finishing Department of Pinnacle Manufacturing Co. prepared the following factory overhead cost budget for October of the current year, during which it expected to operate at a 100% capacity of 10,000 machine hours: During October, the plant was operated for 9,000 machine hours and the factory overhead costs incurred were as follows: indirect factory wages, $16,400; power and light, $10,000; indirect materials, $3,000; supervisory salaries, $12,000; depreciation of plant and equipment, $8,800; insurance and property taxes, $3,200. Prepare a factory overhead cost variance report for October. (The budgeted amounts for actual amount produced should be based on 9,000 machine hours.)

Variances from standard costs are usually reported to:

If the standard to produce a given amount of product is 2,000 units of direct materials at $12 and the actual was 1,600 units at $13, the direct materials quantity variance was $5,200 favorable.

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 $1,000 unfavorable.