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Exam 7: Performance Evaluation Using Variances From Standard Costs

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Question 31

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

A) variable variance
B) controllable variance
C) price variance
D) volume variance

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

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Question 32

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If the standard to produce a given amount of product is 500 direct labor hours at $15 and the actual was 600 hours at $17, the rate variance was $1,200 favorable.

A) True
B) False

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Question 33

Multiple Choice

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The amount of the fixed factory overhead volume variance is

The controllable variance measures

Calculate the direct materials price variance.

Japan Company produces lamps that require 2.25 standard hours per unit at an hourly rate of $15.00 per hour.Production of 7,700 units required 19,250 hours at an hourly rate of $14.90 per hour. What is the direct labor a rate variance, b time variance, and c total cost variance?

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

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

What is the amount of the fixed factory overhead volume variance?

The direct labor time variance is

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

Compute the direct materials price and quantity variances for Taylor Company.

Standard costs are divided into which of the following components?

Robin Company purchased 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 amount of the variable factory overhead controllable variance is

Match the following descriptions with the term a-e it describes: -actual cost < standard cost at actual volumes

If a company records inventory purchases at standard cost and also records purchase price variances, prepare the journal entry for a purchase of widgets that were bought at $7.45 per unit and have a standard cost of $7.15.The total amount owed to the vendor for this purchase is $33,525.

The following data relate to direct labor costs for the current period: Standard costs 6,000 hours at $12.00 Actual costs 7,500 hours at $11.40 What is the direct labor rate variance?

Standard cost variances are usually not reported in reports to stockholders.

Standards that represent levels of operation that can be attained with reasonable effort are called