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Exam 23: Evaluating Variances From Standard Costs

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Question 1

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Flapjack Corporation had 8,200 actual direct labor hours at an actual rate of $12.40 per hour. Original production had been budgeted for 1,100 units, but only 1,000 units were actually produced. Labor standards were 7.6 hours per completed unit at a standard rate of $13.00 per hour.​ -The direct labor time variance is

A) $9,880 favorable
B) $9,880 unfavorable
C) $7,800 unfavorable
D) $7,800 favorable

E) A) and C)
F) All of the above

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Question 2

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St. Augustine Corporation originally budgeted for $360,000 of fixed overhead at 100% of normal 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.​ -The fixed factory overhead volume variance is a.$9,000 favorable b.$9,000 unfavorable c.$5,500 favorable d.$5,500 unfavorable

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b

Question 3

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The total manufacturing cost variance consists of

An unfavorable cost variance occurs when the standard cost exceeds the actual cost.

The following data relate to direct labor costs for the current period: Standard costs 7,500 hours at $11.70 Actual costs 6,000 hours at $12.00 The direct labor time variance is

In most businesses, cost standards are established principally by accountants.

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows: Standard Costs Fixed overhead (based on 10,000 hours) 3 hours per unit at $0.80 per hour Variable overhead 3 hours per unit at $2.00 per hour Actual Costs Total variable cost, $18,000 Total fixed cost, $8,000 -The total factory overhead cost variance is

A budget performance report compares actual costs with the standard costs and reports differences for possible investigation.

The following data relate to direct labor costs for March: Rate: standard, $12.00; actual, $12.25 Hours: standard, 18,500; actual, 17,955 Units of production: 9,450 -Which of the following is not a reason for a direct materials quantity variance?

The following data relate to direct labor costs for March: Rate: standard, $12.00; actual, $12.25 Hours: standard, 18,500; actual, 17,955 Units of production: 9,450 -The total direct labor variance is

Standard costs serve as a device for measuring efficiency.

Tippi Company produces lamps that require 2.25 standard hours per unit at a standard hourly rate of $15.00 per hour. Production of 7,700 units required 17,550 hours at an hourly rate of $15.20 per hour.​ What is the direct labor (a) rate variance, (b) time variance, and (c) total cost variance?

Normally, standard costs should be revised when labor rates change to incorporate new union contracts.

Match each of the following phrases with the term (a-e) it describes. -Actual cost > standard cost at actual volumes

Financial reporting systems that are guided by the principle of exceptions focus attention on variances from standard costs.

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

Standards can be used in nonmanufacturing settings where the tasks are nonrepetitive in nature.

The following data relate to direct labor costs for February: Actual costs 7,700 hours at $14.00 Standard costs 7,000 hours at $16.00 -The direct labor time variance is

Ideal standards are developed under conditions that assume no idle time, no machine breakdowns, and no materials spoilage.

Match each of the following formulas and phrases with the term (a-e) it describes. -Standard variable overhead for actual units produced