FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 8: Flexible Budgets and Standard Costs

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 111

Essay

Review LaterAdd Note

Review Later

What are some causes of direct labor rate and efficiency variances?

Correct Answer

verified

The use of workers with different skill ...

View Answer

Show Answer

Question 112

True/False

Review LaterAdd Note

Review Later

Cost variances are ignored under management by exception.

A) True
B) False

Correct Answer

verified

Show Answer

Question 113

Essay

Review LaterAdd Note

The following information comes from the records of Magno Co. for the current period. a. Compute the overhead controllable and volume variances. In each case, state whether the variance is favorable or unfavorable. b. Prepare the journal entries to charge overhead costs to work in process and the overhead variances to their proper accounts. Factory overhead (based on budgeted production of 24,500 units) Variable overhead $2.25/direct labor hour Fixed overhead $1.95/direct labor hour

Georgia, Inc. has collected the following data on one of its products. The direct materials quantity variance is: $\begin{array} { l l } \text { Direct materials standard (4 lbs. @ \$1/16.) } & \$ 4 \text { per finished unit } \\\text { Total direct materials cost variarne - unfavorable } & \$ 13,750 \\\text { Actual direct materials used } & 150,000 \text { lbs } \\\text { Actual finished units produced } & 30,000 \text { units }\end{array}$

Fletcher Company collected the following data regarding production of one of its products. Compute the variable overhead cost variance. $\begin{array}{lrl}\text { Direct labor standard (2 hrs. @ } \$ 12.75 / \mathrm{hr} .) & \$ 25.50& \text { per finished unit} \\\text { Actual direct labor hours } & 81,500& \text { hrs.} \\\text { Budgeted units } & 42,000& \text { units} \\\text { Actual finished units produced } & 40,000 & \text { units}\\\text { Standard variable OH rate }(2 \mathrm{hrs} . @ \$ 14.30 / \mathrm{hr} .) & \$ 28.60& \text { per finished unit} \\\text { Standard fixed OH rate }(\$ 336,000 / 42,000 \text { units) } & \$ 8.00 & \text { per unit}\\\text { Actual cost of variable overhead costs incurred } & \$ 1,140,000 \\\text { Actual cost of fixed overhead costs incurred } & \$ 338,000\end{array}$

If actual price per unit of materials is greater than the standard price per unit of materials, the direct materials price variance is ________.

A company's flexible budget for 12,000 units of production showed sales, $48,000; variable costs, $18,000; and fixed costs, $16,000. The operating income expected if the company produces and sells 16,000 units is:

A company's flexible budget for 10,000 units of production reflects sales of $200,000; variable costs of $40,000; and fixed costs of $75,000. Calculate the expected level of operating income if the company produces and sells 13,000 units.

Based on predicted production of 25,000 units, Fresh Co. anticipates $175,000 of fixed costs and $137,500 of variable costs. What are the flexible budget amounts of total costs for 20,000 and 30,000 units?

At the end of the accounting period, immaterial variances are closed to ________.

The following information comes from the records of Barney Co. for the current period. a. Compute the direct materials price and quantity variances, direct labor rate and efficiency variances and state whether the variance is favorable or unfavorable. b. Prepare the journal entries to charge direct materials and direct labor costs to work in process and the materials and labor variances to their proper accounts.

Beluga Corp. has developed standard costs based on a predicted operating level of 352,000 units of production, which is 80% of capacity. Variable overhead is $281,600 at this level of activity, or $0.80 per unit. Fixed overhead is $440,000. The standard costs per unit are: $\begin{array} { | l | r | } \hline \text { Direct materials (0.51bs. @\$1/1b.)..... } & \$ 0.50 \text { per unit } \\\hline \text { Direct labor (1hour@\$6hour) ........ } & \$ 6.00 \text { per unit } \\\hline \text { Overhead (1hour@ } \$ 2.05 / \text { hour)........ } & \$ 2.05 \text { per unit } \\\hline\end{array}$ Beluga actually produced 330,000 units at 75% of capacity and actual costs for the period were: Calculate the following variances and indicate whether each variance is favorable or unfavorable: (1) Direct labor efficiency variance: $________ (2) Direct materials price variance: $________ (3) Controllable overhead variance: $________

Fletcher Company collected the following data regarding production of one of its products. Compute the fixed overhead cost variance. $\begin{array}{lrl}\text { Direct labor standard (2 hrs. @ } \$ 12.75 / \mathrm{hr} .) & \$ 25.50& \text { per finished unit} \\\text { Actual direct labor hours } & 81,500& \text { hrs.} \\\text { Budgeted units } & 42,000& \text { units} \\\text { Actual finished units produced } & 40,000 & \text { units}\\\text { Standard variable OH rate }(2 \mathrm{hrs} . @ \$ 14.30 / \mathrm{hr} .) & \$ 28.60& \text { per finished unit} \\\text { Standard fixed OH rate }(\$ 336,000 / 42,000 \text { units) } & \$ 8.00 & \text { per unit}\\\text { Actual cost of variable overhead costs incurred } & \$ 1,140,000 \\\text { Actual cost of fixed overhead costs incurred } & \$ 338,000\end{array}$

Fletcher Company collected the following data regarding production of one of its products. Compute the direct labor rate variance. $\begin{array}{lrl}\text { Direct labor standard (2hrs. @, } \$ 12.75 / \mathrm{hr} .) & \$ 5.50&\text {per finished} \\&&\text {unit}\\\text { Actual direct labor hours } & 81,500 &\text {hrs.} \\\text { Actual finished units produced } & 40,000&\text {units}\\\text { Actual cost of direct labor } & \$ 1,100,250\end{array}$

Cavern Company's output for the current period results in a $5,250 unfavorable direct material price variance. The actual price per pound is $56.50 and the standard price per pound is $55.00. How many pounds of material are used in the current period?

Sanchez Company's output for the current period was assigned a $200,000 standard direct materials cost. The direct materials variances included a $5,000 favorable price variance and a $3,000 unfavorable quantity variance. What is the actual total direct materials cost for the current period?

The difference between the actual sales and the flexible budget sales is called the ________ variance.

A flexible budget expresses all costs on a per unit basis, regardless of cost behavior.

The following information relating to a company's overhead costs is available. Based on this information, the total overhead variance is:

A company uses the following standard costs to produce a single unit of output. $\begin{array} { l l l } \text { Direct materials } & 6 \text { pounds at } \$ 0.90 \text { per pound } & = \$ 5.40 \\\text { Direct labor } & 0.5 \text { hour at } \$ 12.00 \text { per hour } & = \$ 6.00 \\\text { Manufacturing overhead } & 0.5 \text { hour at } \$ 4.80 \text { per hour } & = \$ 2.40\end{array}$ During the latest month, the company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $56,350 based on 4,900 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was $10,400. Based on this information, the total direct materials cost variance for the month was: