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Exam 9: Standard Costing and Variance Analysis

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Question 21

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Lakewood Inc.uses a standard cost system.Materials standards are 7 components per widget at $12 per component.During August,Lakewood Inc.purchased 64,500 components for $768,750,using the components to produce 8,600 widgets.Calculate the: a.direct materials price variance. b.direct materials quantity variance.

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a.$5,250 favorable = $768,750 - (64,500 ...

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Question 22

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Venus Company applies overhead based on direct labor hours.The variable overhead standard is 10 hours at $3.50 per hour.During October,Venus Company spent $157,600 for variable overhead.47,440 labor hours were used to produce 4,800 units.What is the variable overhead rate variance?

A) $8,440 favorable
B) $1,960 favorable
C) $10,400 favorable
D) $1,960 unfavorable

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

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Question 23

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The variable overhead rate variance is the difference between the actual variable overhead rate and the standard variable overhead rate multiplied by the actual value of the cost driver.

Beech has budgeted fixed overhead of $202,500 based on budgeted production of 13,500 units.During July,14,100 units were produced and $214,200 was spent on fixed overhead.What is the fixed overhead volume variance?

Scarlett Company has a direct materials standard of 3 gallons of input at a cost of $5 per gallon.During July,Scarlett Company purchased and used 7,500 gallons.The direct materials quantity variance was $750 unfavorable and the direct materials price variance was $3,000 favorable.How many units were produced?

Whitman has a direct labor standard of 2 hours per unit of output.Each employee has a standard wage rate of $22.50 per hour.During July,Whitman paid $94,750 to employees for 4,445 hours worked.2,350 units were produced during July.What is the direct labor efficiency variance?

Delmar Inc.uses a standard cost system.Labor standards are 2 hours per widget at $13.30 per hour.During August,Delmar Inc.paid its workers $226,338 for 16,800 hours.Delmar Inc.produced 8,600 widgets during August.Calculate the: a.direct labor rate variance. b.direct labor efficiency variance.

________ variances are calculated by comparing the master budget to the flexible budget,and ________ variances are calculated by comparing actual costs to the flexible budget (not the master budget) .

The difference between the actual cost driver amount and the standard cost driver amount,multiplied by the standard variable overhead rate,is the:

Willow Inc.has provided the following information: Budgeted production = 7,000 units Calculate the: a.direct materials price variance. b.direct materials quantity variance. c.direct labor rate variance. d.direct labor efficiency variance. e.variable overhead rate variance. f.variable overhead efficiency variance. g.fixed overhead spending variance.

The difference between actual volume and budgeted production,multiplied by the fixed overhead rate based on practical capacity,is the:

A spending variance is calculated by comparing actual costs with the static budget.

Both the master budget and the flexible budget are based on:

Blossom,Inc.prepared the following master budget items for July: During July,Blossom actually sold 36,000 units.Prepare a flexible budget for Blossom based on actual sales.

Regency Corp.uses a standard cost system to account for the costs of its one product.Fixed overhead is applied to production at a rate of $27.50 per unit,based on budgeted production of 2,500 per month.During November,Regency produced 2,300 units.Fixed overhead incurred totaled $70,310.Calculate the: a.fixed overhead spending variance. b.fixed overhead volume variance. c.over- or underapplied fixed overhead.

Delaware Corp.prepared a master budget that included $21,360 for direct materials,$33,600 for direct labor,$18,000 for variable overhead,and $46,440 for fixed overhead.Delaware Corp.planned to sell 4,000 units during the period,but actually sold 4,300 units.What would Delaware's direct labor cost be if it used a flexible budget for the period based on actual sales?

Jupiter Co.applies overhead based on direct labor hours.The variable overhead standard is 4 hours at $12 per hour.During February,Jupiter Co.spent $113,400 for variable overhead.9,150 labor hours were used to produce 2,400 units.What is the over- or underapplied variable overhead?

Scarlett Company has a direct materials standard of 3 gallons of input at a cost of $5 per gallon.During July,Scarlett Company purchased and used 7,500 gallons.The direct materials quantity variance was $750 unfavorable and the direct materials price variance was $3,000 favorable.What price per gallon was paid for the purchases?

Ferry Chemical uses a standard cost system to account for the costs of its production of Chemical X.Standards are 1.4 gallons of materials at $105 per gallon and 10 hours of labor at a standard wage rate of $12.During September,Ferry Chemical produced 2,600 gallons of Chemical X.Ferry Chemical purchased and used totaled 3,560 gallons at a total cost of $381,180.Payroll totaled $302,730 for 25,430 hours worked.Calculate the: a.direct materials price variance. b.direct materials quantity variance. c.direct labor rate variance. d.direct labor efficiency variance.

Melrose Inc.uses standard costing.Last period,its flexible budget for labor was $144,000.The direct labor rate variance was $5,000 favorable,and the direct labor efficiency variance was $6,000 unfavorable.In the journal entry to record the use of direct labor,the amount credited to wages payable would be: