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Exam 22: Evaluating Variances From Standard Costs

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Question 1

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The most effective means of presenting standard factory overhead cost variance data is through a factory overhead cost variance report.

A) True
B) False

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Question 2

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

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

E) All of the above
F) B) and D)

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Question 3

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If the standard to produce a given amount of product is 600 direct labor hours at $17 and the actual is 500 hours at $15, the time variance is $1,500 unfavorable.

-Calculate the total direct labor variance.

Match each of the following formulas or descriptions with the term (a-e) it defines. -(Actual Price - Standard Price) × Actual Quantity

Variances from standard costs are reported to

The following information is for the standard and actual costs for Happy Corporation:?? Determine: (a) the direct materials quantity variance, price variance, and total cost variance; (b) the direct labor time variance, rate variance, and total cost variance; and (c) the factory overhead volume variance, controllable variance, and total factory overhead cost variance. (Note: If following text formulas, do not round interim calculations.)

The variance from standard for factory overhead cost resulting from operating at a level above or below 100% of normal capacity is termed volume variance.

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

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

Robin Company purchased on account and used 500 pounds of direct materials to produce a product with a 520-pound standard direct materials requirement. The standard materials price is $1.90 per pound. The actual materials price was $2.00 per pound.​Prepare the journal entries to record (1) the purchase of the materials and (2) the material entering production.

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

The total manufacturing cost variance is

If the wage rate paid per hour differs from the standard wage rate per hour for direct labor, the variance is a

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

The standard price and quantity of direct materials are separated because

If the price paid per unit differs from the standard price per unit for direct materials, the variance is a

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.

It is correct to rely exclusively on past cost data when establishing standards.

The Finishing Department of Pinnacle Manufacturing Co. prepared the following factory overhead cost budget for October of the current year, during which it expected to operate at a 100% capacity of 10,000 machine hours.​ During October, the plant was operated for 9,000 machine hours and the factory overhead costs incurred were as follows: indirect factory wages, $16,400; power and light, $10,000; indirect materials, $3,000; supervisory salaries, $12,000; depreciation of plant and equipment, $8,800; insurance and property taxes, $3,200.Prepare a factory overhead cost variance report for October. (The budgeted amounts for actual amount produced should be based on 9,000 machine hours.)