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Exam 10: Standard Costs and Variances

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Question 81

True/False

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The standard quantity or standard hours allowed refers to the amount of the input that should have been used to produce the actual output of the period.

A) True
B) False

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Question 82

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A favorable labor rate variance indicates that

A) actual hours exceed standard hours.
B) standard hours exceed actual hours.
C) the actual rate exceeds the standard rate.
D) the standard rate exceeds the actual rate.

E) A) and D)
F) A) and C)

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Question 83

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The general model for calculating a quantity variance is:

Warp Manufacturing Corporation uses a standard cost system for the production of its ski lift chairs. Warp uses machine-hours as an overhead base. The variable manufacturing overhead standards for each chair are 1.2 machine-hours at a standard cost of $18 per hour. During the month of September, Warp incurred 34,000 machine-hours in the production of 32,000 ski lift chairs. The total variable manufacturing overhead cost was $649,400. What is Warp's variable overhead rate variance for September?

The production department should generally be responsible for materials price variances that resulted from:

Chhom Corporation makes a product whose direct labor standards are 0.4 hours per unit and $19.00 per hour. In November the company produced 1,800 units using 760 direct labor-hours. The actual direct labor cost was $13,300. The labor rate variance for November is:

Majer Corporation makes a product with the following standard costs: The company reported the following results concerning this product in February. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead efficiency variance for February is:

Highfill Corporation's variable overhead is applied on the basis of direct labor-hours. The standard cost card for product D80D specifies 8.4 direct labor-hours per unit of D80D. The standard variable overhead rate is $5.60 per direct labor-hour. During the most recent month, 800 units of product D80D were made and 6,800 direct labor-hours were worked. The actual variable overhead incurred was $41,140. Required: a. What was the variable overhead rate variance for the month? b. What was the variable overhead efficiency variance for the month?

Luma Inc. has provided the following data concerning one of the products in its standard cost system. The company has reported the following actual results for the product for September: The raw materials price variance for the month is closest to:

The following labor standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: Required: a. What is the labor rate variance for the month? b. What is the labor efficiency variance for the month?

The following standards for variable overhead have been established for a company that makes only one product: The following data pertain to operations for the last month: Required: a. What is the variable overhead rate variance for the month? b. What is the variable overhead efficiency variance for the month?

The following information relates to the direct labor at Padmaja Manufacturing, Inc. for March: During March, Padmaja produced 2,100 units. What is Padmaja's labor efficiency variance for March?

When more hours of labor time are necessary to complete a job than the standard allows, the labor efficiency variance is unfavorable.2017-09-13

Mirabito Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. The company has reported the following actual results for the product for December: Required: a. Compute the materials price variance for December. b. Compute the materials quantity variance for December. c. Compute the labor rate variance for December. d. Compute the labor efficiency variance for December. e. Compute the variable overhead rate variance for December. f. Compute the variable overhead efficiency variance for December.

Glaab Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. The company has reported the following actual results for the product for September: Required: a. Compute the materials price variance for September. b. Compute the materials quantity variance for September. c. Compute the labor rate variance for September. d. Compute the labor efficiency variance for September. e. Compute the variable overhead rate variance for September. f. Compute the variable overhead efficiency variance for September.

Kartman Corporation makes a product with the following standard costs: In June the company's budgeted production was 3,400 units but the actual production was 3,500 units. The company used 22,150 pounds of the direct material and 2,290 direct labor-hours to produce this output. During the month, the company purchased 25,400 pounds of the direct material at a cost of $170,180. The actual direct labor cost was $57,021 and the actual variable overhead cost was $8,931. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead rate variance for June is:

Reagen Corporation makes a product with the following standard costs: The company reported the following results concerning this product in December. The materials price variance is recognized when materials are purchased. Variable overhead is applied on the basis of direct labor-hours. Required: a. Compute the materials quantity variance. b. Compute the materials price variance. c. Compute the labor efficiency variance. d. Compute the labor rate variance. e. Compute the variable overhead efficiency variance. f. Compute the variable overhead rate variance.

Grub Chemical Corporation has developed cost standards for the production of its new cologne, ChocO. The variable cost standards below relate to each 10 gallon batch of ChocO: Variable manufacturing overhead at Grub is applied based on direct labor-hours. The actual results for last month were as follows: What is ChocO's materials (milk chocolate) quantity variance?

Thyne Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. The actual output for the period was 3,900 units. The standard hours allowed for the actual output is closest to:

The following standards for variable manufacturing overhead have been established for a company that makes only one product: The following data pertain to operations for the last month: What is the variable overhead efficiency variance for the month?