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Exam 11: Standard Costs and Variances

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Question 51

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The Southside Corporation budgeted 4,400 pounds of direct materials to make 2,600 units of product. The company actually used 4,800 pounds of direct materials to make the 2,600 units. The direct materials quantity variance is $1,500 unfavorable. What is the standard price per pound of direct materials?

A) $0.59
B) $2.22
C) $6.35
D) $3.75

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Question 52

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Ideal standards allow for a normal amount of waste and inefficiency.

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Question 53

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Which variance is directly impacted if a worker drops the raw material during production and the raw material must be discarded?

Razzle Baking Company gathered the following actual results for the current month: Budgeted production and standard costs were: What is the direct materials price variance?

The ________ "measures how well the business keeps unit prices of direct materials within standards."

Dozen Bakery makes cupcakes and cookies. Dozen gathered the following information for the current year regarding its use of flour and butter (flour is a direct material for cupcakes and butter is a direct material for cookies) : What is the standard direct material price per pound for the butter in the cookies?

An unfavorable direct labor rate variance indicates which of the following?

River Mills manufactures reproduction antique furniture using historic manufacturing methods. River often uses waterpower, which is not only historically accurate, but also saves energy costs. Although River uses old-fashioned manufacturing techniques it is still a modern company that performs modern business analysis. River incurred actual fixed manufacturing overhead costs of $286,000. Using standard costing, River allocated $225,000 in fixed manufacturing overhead costs. If River observed a $2,125 unfavorable fixed manufacturing overhead volume variance, what amount had management budgeted for fixed manufacturing overhead?

If the purchasing manager purchased a greater quantity of raw materials than budgeted, but paid the standard price, which variance would be affected?

The ________ department would most likely be responsible for a "sales volume variance."

A company uses sugar in producing its product. If the price of sugar doubles, which variance is directly impacted?

The fixed overhead budget variance measures the difference between the actual fixed overhead costs incurred and the budgeted fixed overhead costs.

Pyne Corporation's actual output for a period was assigned the standard labor cost of $32,500. If the company had an unfavorable direct labor rate variance of $1,750 and a favorable direct labor efficiency variance of $975, what was the total actual cost of direct labor incurred during the period?

Batchelder Manufacturing reported the following budgeted and actual figures for one of its products: Given this data, what is the total variable overhead variance for this product?

Myles Company budgeted 10,500 pounds of direct materials costing $23.50 per pound to make 5,300 units of product. The company actually purchased 11,000 pounds of direct materials costing $25.00 per pound to make the 5,300 units. What is the direct materials price variance?

Jennings Manufacturing gathered the following flexible budget information: How much is the total budgeted overhead cost at 90% of normal capacity?

Standard Products Company recognizes variances from standards at the earliest opportunity, and the quantity of direct materials purchased is equal to the quantity used. The following information is available for the most recent month. Assume the allocation base for fixed overhead costs is the number of units. Direct Materials Direct Labor Standard quantity/unit 6.00 lbs. 2.5 hrs. Standard price/lb. or hr. $8.10/lb. $8.00/hr. Actual quantity/unit 6.25 lbs. 2.8 hrs. Actual price/lb. or hr. $8.00/lb. $7.50/hr Price variance $562.50 F $1,260.00 F Quantity/Efficiency variance $1,822.50 U $2,160.00 U Static budget volume 800 units Actual volume 900 units Actual overhead cost $11,000 Standard variable overhead cost $5/unit Standard fixed overhead cost $5,600 Overhead flexible budget variance $900 U Production volume variance $700 F Journalize the direct labor costs incurred and the assignment of direct labor to Work in Process Inventory, including the related variances.

Kahn Performance Nutrition produces a protein shake which contains whey protein as one of its ingredients. The whey protein (materials) standards for each batch of protein shake produced are 12 pounds of whey protein at a standard cost of $3.00 per pound. During July, Kahn Performance Nutrition purchased and used 54,000 pounds of whey protein at a total of $170,000 to make a total of 4,300 batches of protein shake. What is the materials quantity variance for whey protein in July?

Disadvantages of using standard costs include all of the following except

Direct labor standards are becoming less relevant to many companies due to the shift towards automated production processes.