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Exam 10: Standard Costs and Variances

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Question 71

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Eliezrie Corporation makes a product with the following standard costs: In January the company's budgeted production was 7, 400 units but the actual production was 7, 500 units.The company used 45, 580 kilos of the direct material and 2, 030 direct labor-hours to produce this output.During the month, the company purchased 48, 500 kilos of the direct material at a cost of $53, 350.The actual direct labor cost was $18, 473 and the actual variable overhead cost was $7, 714. 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 variable overhead efficiency variance for January is:

A) $836 F
B) $836 U
C) $880 F
D) $880 U

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

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Question 72

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Blue Corporation's standards call for 2, 500 direct labor-hours to produce 1, 000 units of product.During May 900 units were produced and the company worked 2, 400 direct labor-hours.The standard hours allowed for May production would be:

A) 2, 500 hours
B) 2, 400 hours
C) 2, 250 hours
D) 1, 800 hours

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

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Question 73

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Pardoe, Inc. , manufactures a single product in which variable manufacturing overhead is assigned on the basis of standard direct labor-hours.The company uses a standard cost system and has established the following standards for one unit of product: During March, the following activity was recorded by the company: • The company produced 3, 000 units during the month. • A total of 8, 000 pounds of material were purchased at a cost of $23, 000. • There was no beginning inventory of materials on hand to start the month;at the end of the month, 2, 000 pounds of material remained in the warehouse. • During March, 1, 600 direct labor-hours were worked at a rate of $6.50 per hour. • Variable manufacturing overhead costs during March totaled $1, 800. The direct materials purchases variance is computed when the materials are purchased. The variable overhead efficiency variance for March is:

An unfavorable labor rate variance can occur if workers with high hourly wage rates are assigned to work on products with standards that assume workers have low hourly wage rates.

Oddo Corporation makes a product with the following standard costs: The company reported the following results concerning this product in December. 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 variable overhead efficiency variance for December is:

In a company's standard costing system direct labor-hours are used as the base for applying variable manufacturing overhead costs.The standard direct labor rate is twice the variable overhead rate.Last period the labor efficiency variance was unfavorable.From this information one can conclude that last period the variable overhead efficiency variance was:

Galla Corporation makes a product with the following standard costs: The company budgeted for production of 2, 400 units in June, but actual production was 2, 500 units.The company used 19, 850 pounds of direct material and 980 direct labor-hours to produce this output.The company purchased 21, 700 pounds of the direct material at $6.70 per pound.The actual direct labor rate was $19.20 per hour and the actual variable overhead rate was $1.80 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:

The following direct labor standards have been established for product S57S: The following data pertain to last month's operations: Required: a.What was the labor rate variance for the month? b.What was the labor efficiency variance for the month?

Oddo Corporation makes a product with the following standard costs: The company reported the following results concerning this product in December. 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 rate variance for December is:

Galla Corporation makes a product with the following standard costs: The company budgeted for production of 2, 400 units in June, but actual production was 2, 500 units.The company used 19, 850 pounds of direct material and 980 direct labor-hours to produce this output.The company purchased 21, 700 pounds of the direct material at $6.70 per pound.The actual direct labor rate was $19.20 per hour and the actual variable overhead rate was $1.80 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 price variance for June is:

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

The standards for direct materials in making a certain product are 20 pounds at $0.75 per pound.During the past period, 56, 000 units of product were made and the materials quantity variance was $30, 000 U.The number of pounds of direct material used during the period amounted to:

Vath Corporation, which makes landing gears, has provided the following data for a recent month: Required: Determine the rate and efficiency variances for the variable overhead item supplies and indicate whether those variables are favorable or unfavorable.Show your work!

Ledezma Corporation makes a product with the following standards for direct labor and variable overhead: In May the company produced 2, 500 units using 1, 210 direct labor-hours.The actual variable overhead cost was $9, 922.The company applies variable overhead on the basis of direct labor-hours. The variable overhead efficiency variance for May is:

The following data have been provided by Gerlach Corporation, a company that produces forklift trucks: Supplies cost is an element of variable manufacturing overhead.The variable overhead efficiency variance for supplies cost is:

Bronfenbrenner Co.uses a standard cost system for its single product in which variable overhead is applied on the basis of direct labor hours.The following information is given: Standard costs per unit: Actual experience for current year: Required: Compute the following variances for raw materials, direct labor, and variable overhead, assuming that the price variance for materials is recognized at point of purchase: a.Direct materials price variance. b.Direct materials quantity variance. c.Labor rate variance. d.Labor efficiency variance. e.Variable overhead rate variance. f.Variable overhead efficiency variance.

The following materials standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: The direct materials purchases variance is computed when the materials are purchased. What is the materials quantity variance for the month?

Waste on the production line will result in an unfavorable materials quantity variance.

Biery Corporation makes a product with the following standard costs: The company produced 4, 100 units in April using 5, 380 liters of direct material and 2, 610 direct labor-hours.During the month, the company purchased 6, 000 liters of the direct material at $5.80 per liter.The actual direct labor rate was $19.80 per hour and the actual variable overhead rate was $2.90 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 variable overhead efficiency variance for April is:

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 efficiency variance for the month?