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Exam 22: Performance Evaluation Using Variances From Standard Costs

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Question 31

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Compute the standard cost for one pair of boots, based on the following standards for each pair of boots: Standard material quantity: 1.25 yards of leather at $35.00 per yard Standard labor: 9 hours at $25.75 per hour Factory overhead: $1.75 per direct labor hour

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Question 32

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The standard factory overhead rate is $7.50 per machine hour $6.20 for variable factory overhead and $1.30 for fixed factory overhead) based on 100% of normal capacity of 80,000 machine hours. The standard cost and the actual cost of factory overhead for the production of 15,000 units during August were as follows: -What is the amount of the variable factory overhead controllable variance?

A) $12,000 unfavorable
B) $12,000 favorable
C) $14,000 unfavorable
D) $26,000 unfavorable

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

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Question 33

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

Calculate the direct labor rate variance.

Standard and actual costs for direct labor for the manufacture of 300 units of product were as follows: Determine the direct labor a) time variance, b) rate variance, and c) total cost variance.

Accounting systems that use standards for product costs are called budgeted cost systems.

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

Non-financial measures are often linked to the inputs or outputs of an activity or process.

Ruby Company produces a chair that requires 5 yards of material per unit. The standard price of one yard of material is $7.50. During the month, 8,400 chairs were manufactured, using 43,700 yards at a cost of $7.30 per yard. Determine the a) price variance, b) quantity variance, and c) total cost variance.

Which of the following conditions normally would not indicate that standard costs should be revised?

?If the actual quantity of direct materials used in producing a commodity differs from the standard quantity, the variance is a

The following data is given for the Taylor Company: Overhead is applied based on standard labor hours. -Compute the direct labor rate and time variances for Taylor Company.

Define ideal and currently attainable standards. Which type of standard should be used and why?

Currently attainable standards do not allow for reasonable production difficulties.

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

The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are Standard Costs Direct materials 2,500 kilograms @ $8.50 Actual Costs Direct materials 2,600 kilograms @ $8.75 The amount of the direct materials quantity variance is

The direct labor rate variance is

At the end of the fiscal year, the variances from standard are usually transferred to the finished goods account.

Which of the following is not a reason for a direct materials quantity variance?

*Actual hours are equal to standard hours for units produced. -The total factory overhead cost variance is