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Exam 7: Performance Evaluation Using Variances From Standard Costs

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Question 31

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Which of the following would not lend itself to applying direct labor variances?

A) Help desk
B) Research and development scientist
C) Customer service personnel
D) Telemarketer

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Question 32

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Ruby Company produces a chair that requires 5 yds. 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) cost variance.

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(a) Price variance = ($7.60 - ...

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Question 33

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Calculate the total factory overhead cost variance using the above information:

The controllable variance measures:

Prepare an income statement for the year ended December 31, 2012, through gross profit for Aframe Company using the following information. Assume Aframe Company sold 8,600 units at $125 per unit. (Note: Normal production is 9,000 units)

Incurring actual indirect factory wages in excess of budgeted amounts for actual production results in a:

Ruby Company produces a chair that requires 5 yds. of material per unit. The standard price of one yard of material is $7.50. During the month, 8,500 chairs were manufactured, using 43,600 yards at a cost of $7.55 per yard. Determine the (a) price variance, (b) quantity variance, and (c) cost variance.

Aquatic Corp.'s standard material requirement to produce a single of Model 2000 is 15 pounds of material @ $110.00 per pound. Last month, Aquatic purchased 170,000 pounds of material at a total cost of $17,850,000. They used 162,000 pounds to produce 10,000 units of Model 2000. Required: Calculate the material price variance and material quantity variance, and indicate whether each variance is favorable or unfavorable.

The St. Augustine Corporation originally budgeted for $360,000 of fixed overhead at 100% production capacity. Production was budgeted to be 12,000 units. The standard hours for production were 5 hours per unit. The variable overhead rate was $3 per hour. Actual fixed overhead was $360,000 and actual variable overhead was $170,000. Actual production was 11,700 units. Compute the factory overhead controllable variance.

A company should only use nonfinancial performance measures when financial measures cannot be calculated.

The total manufacturing cost variance is

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

Standards are more widely used for nonmanufacturing expenses than for manufacturing costs.

The standard costs and actual costs for direct materials for the manufacture of 3,000 actual units of product are as follows: The amount of direct materials price variance is:

The following data relate to direct labor costs for the current period: What is the direct labor rate variance?

Nonfinancial performance output measures are used to improve the input measures.

Prepare an income statement (through income before income tax) for presentation to management, using the following data from the records of Greenway Manufacturing Company for November of the current year:

Rosser Company produces a container that requires 4 yds. of material per unit. The standard price of one yard of material is $4.50. During the month, 9,500 chairs were manufactured, using 37,300 yards. Required: Journalize the entry to record the standard direct materials used in production.

The formula to compute direct labor time variance is to calculate the difference between

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