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Exam 9: Standard Costs and Variances

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Question 61

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Landram Corporation makes a product with the following standard costs: In March the company produced 4,700 units using 10,230 kilos of the direct material and 2,210 direct labor-hours. During the month, the company purchased 10,800 kilos of the direct material at a cost of $76,680. The actual direct labor cost was $38,233 and the actual variable overhead cost was $11,934. 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 materials quantity variance for March is:

A) $5,810 F
B) $5,893 U
C) $5,893 F
D) $5,810 U

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

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Question 62

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Carskadon Corporation makes a product that uses a material with the following direct material standards: The company produced 3,000 units in December using 6,270 pounds of the material. During the month, the company purchased 7,100 pounds of the direct material at a total cost of $13,490. The direct materials purchases variance is computed when the materials are purchased. -The materials quantity variance for December is:

A) $660 F
B) $660 U
C) $627 F
D) $627 U

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

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Question 63

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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?

Vitko Corporation makes automotive engines.For the most recent month,budgeted production was 6,000 engines.The standard power cost is $8.80 per machine-hour.The company's standards indicate that each engine requires 6.1 machine-hours.Actual production was 6,400 engines.Actual machine-hours were 38,730 machine-hours.Actual power cost totaled $350,628. Required: Determine the rate and efficiency variances for the variable overhead item power cost and indicate whether those variances are unfavorable or favorable.Show your work!

The standards for product U31 call for 7.1 liters of a raw material that costs $12.10 per liter.Last month,1,900 liters of the raw material were purchased for $23,180.The actual output of the month was 200 units of product U31.A total of 1,200 liters of the raw material were used to produce this output. Required: a.What is the materials price variance for the month? b.What is the materials quantity variance for the month?

Tavorn Corporation applies manufacturing overhead to products on the basis of standard machine-hours.The company's standard variable manufacturing overhead rate is $1.80 per machine-hour.The actual variable manufacturing overhead cost for the month was $13,080.The original budget for the month was based on 7,100 machine-hours.The company actually worked 7,210 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 7,070 machine-hours.What was the variable overhead efficiency variance for the month?

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?

The materials quantity variance should be computed:

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?

Kibodeaux Corporation makes a product with the following standard costs: The company budgeted for production of 3,300 units in June, but actual production was 3,400 units. The company used 33,240 liters of direct material and 320 direct labor-hours to produce this output. The company purchased 35,900 liters of the direct material at $4.90 per liter. The actual direct labor rate was $22.70 per hour and the actual variable overhead rate was $2.70 per hour. 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 materials quantity variance for June is:

When more hours of labor time are necessary to complete a job than the standard allows,the labor rate variance is unfavorable.

In general,the purchasing agent is responsible for the materials price variance.

Tidd Corporation makes a product with the following standard costs: The company reported the following results concerning this product in November. 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 labor efficiency variance for November is:

Jardell Corporation makes a product with the following standards for labor and variable overhead: The company budgeted for production of 6,400 units in June, but actual production was 6,400 units. The company used 3,180 direct labor-hours to produce this output. The actual variable overhead rate was $4.90 per hour. The company applies variable overhead on the basis of direct labor-hours. -The variable overhead efficiency variance for June is:

The standards for product C54L specify 4.5 direct labor-hours per unit at $12.40 per direct labor-hour.Last month 1,560 units of product C54L were produced using 7,000 direct labor-hours at a total direct labor wage cost of $86,100. Required: a.What was the labor rate variance for the month? b.What was the labor efficiency variance for the month?

Tower Company planned to produce 3,000 units of its single product,Titactium,during November.The standards for one unit of Titactium specify six pounds of materials at $0.30 per pound.Actual production in November was 3,100 units of Titactium.There was an unfavorable materials price variance of $380 and a favorable materials quantity variance of $120.Based on these variances,one could conclude that:

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

Kornfeld Corporation produces metal telephone poles.In the most recent month,the company budgeted production of 2,800 poles.Actual production was 3,200 poles.According to standards,each pole requires 2.2 machine-hours.The actual machine-hours for the month were 6,890 machine-hours.The standard variable manufacturing overhead rate is $9.20 per machine-hour.The actual variable manufacturing cost for the month was $67,020.The variable overhead efficiency variance is:

Arrow Industries uses a standard cost system in which direct materials inventory is carried at standard cost. Arrow has established the following standards for the prime costs of one unit of product. During May, Arrow purchased 160,000 pounds of direct material at a total cost of $304,000. The total direct labor wages for May were $37,800. Arrow manufactured 19,000 units of product during May using 142,500 pounds of direct material and 5,000 direct labor-hours. -The direct labor rate variance for May is:

The Litton Company has established standards as follows: Direct material: 3 pounds per unit $4 per pound = $12 per unit Direct labor: 2 hours per unit $8 per hour = $16 per unit Variable manufacturing overhead: 2 hours per unit $5 per hour = $10 per unit Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased. The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours. -The variable overhead rate variance is: