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Exam 29: Controlling Manufacturing Costs: Standard Costs

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Question 1

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The general model for computing a price variance is:

A) difference in unit price × actual quantity of inputs.
B) difference in unit price × standard quantity of inputs.
C) standard price × (actual quantity of inputs - standard quantity allowed for units of output) .
D) actual price × difference in quantity of inputs.

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

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verified

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Question 2

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A budget that shows expected costs at more than one level of activity is called a(n)____________________ budget.

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flexible

Question 3

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The high-low point method results can be misleading if the activity is not reflective of the normal activity.

Two variances associated with analyzing manufacturing overhead costs are the production volume variance and the flexible budget variance.

SweetBerry Ice-creams uses a standard cost system.The following data is available for June: The actual material cost for June was:

Costs that tend to change in total directly with the volume of manufacturing activity are called ____________________ costs.

The flexible budget usually shows

As the level of activity increases,the total variable costs for the period

Semi-variable costs vary in direct proportion to the volume of activity.

The Hoatzin Birdhouse Factory produced the following standard cost card.In July,the company had an order for 500 birdhouses (Model: Wren)for Job No.CB32.Manufacturing overhead is based on direct labor hours.The manufacturing overhead cost estimates for the year total $32,400 and total direct labor hours are estimated at 9,000 for the year.Complete the Standard Cost Card and Job Order Cost Sheet.Calculate the total cost variance.

Direct factory labor is usually considered to be

A decrease in activity level will result in:

If the actual cost of an item is lower than the standard cost,a(n)____________________ price variance will be recognized.

In a factory,the total variable costs are $600 if 500 units are produced.If 800 units are produced,the variable cost per unit would be

Examples of fixed manufacturing costs include all of the following except:

Canine Cottage Industries makes several specially designed doghouses.The Standard Cost Card for The Gables model is shown.A customer ordered three of this model for their Labrador retrievers.The Job Cost Sheet is shown. From the information given for Canine Cottage Industries,compute the labor total,time and rate variances.

The difference between the total standard cost and the total actual cost is the ___________________.

Better Blankets,Inc.makes a SnuggieBlank using flannel material and trim binding.They have instituted a successful JIT system and thus no longer have to stock inventory prior to their production need.The Standard Cost Card for The SnuggieBlank model is shown. The company reported the following results concerning January results: The material price variance for Trim used in January is:

Costs that vary in some degree with the volume of activity,but not in direct proportion to it are called ____________________ costs.

If a price variance for materials is unfavorable,the quantity variance for materials also must be unfavorable.