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Exam 7: Performance Evaluation Using Variances From Standard Costs

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Question 1

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The following data relate to direct labor costs for August: Actual costs: 5,500 hours at $24.00 per hour.Standard costs: 5,000 hours at $23.70 per hour. What is the direct labor time variance?

A) $1,650 favorable
B) $1,650 unfavorable
C) $1,500 favorable
D) $1,500 unfavorable

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

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Question 2

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The fixed factory overhead volume variance is

A) $9,000 favorable
B) $9,000 unfavorable
C) $5,500 favorable
D) $5,500 unfavorable

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

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Question 3

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Match the following formulas or descriptions with the term a-e it defines. -Actual direct hours - Standard direct hours × Standard rate per hour

The materials quantity variance is

Tucker Company produced 8,900 units of product that required 3.25 standard hours per unit.The standard variable overhead cost per unit is $4.00 per hour.The actual variable factory overhead was $111,000. Determine the variable factory overhead controllable variance.

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual was 800 units at $12, the direct materials quantity variance was $1,000 unfavorable.

The unfavorable volume variance may be due to all of the following factors except

What is the amount of the variable factory overhead controllable variance?

Standards are designed to evaluate price and quantity variances separately.

While setting standards, managers should never allow for spoilage or machine breakdowns in their calculations.

The direct materials price variance is

If the actual direct labor hours spent producing a commodity differs from the standard hours, the variance is a

The following data is given for the Bahia Company: Overhead is applied on standard labor hours. The fixed factory overhead controllable variance is

Match the following descriptions with the term a-e it describes: -normal standard

Oak Company produces a chair that requires 6 yards of material per unit.The standard price of one yard of material is $7.50.During the month, 8,500 chairs were manufactured, using 48,875 yards. Journalize the entry to record the standard direct materials used in production.

Ruby Company produces a chair that requires 5 yards of material per unit.The standard price of one yard of material is $7.60.During the month, 8,500 chairs were manufactured, using 40,000 yards at a cost of $7.50. Determine the a price variance, b quantity variance, and c total cost variance.

Greyson Company produced 8,300 units of product that required 4.25 standard hours per unit.Determine the standard fixed overhead cost per unit at 27,000 hours, which is 100% of normal capacity, if the favorable fixed factory overhead volume variance is $14,895.

Jaxson Corporation has the following data related to direct labor costs for September: actual costs are 10,200 hours at $15.75 per hour and standard costs are 10,800 hours at $15.50 per hour. What is the direct labor time variance?

Calculate the total direct materials cost variance.

The standard cost is how much a product should cost to manufacture.