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Exam 23: Flexible Budgets and Standard Costs

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Question 81

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Fletcher Company collected the following data regarding production of one of its products.Compute the direct labor efficiency variance.

A) $19,125 favorable.
B) $80,250 favorable.
C) $61,125 favorable.
D) $19,125 unfavorable.
E) $80,250 unfavorablE.AH * SR = (81,500 * $12.75) = $1,039,125

F) D) and E)
G) A) and D)

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Question 82

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Within the same flexible budget performance report,it is impossible to have both favorable and unfavorable variances.

A) True
B) False

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Question 83

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A flexible budget may be prepared:

Beluga Corp.has developed standard costs based on a predicted operating level of 352,000 units of production,which is 80% of capacity.Variable overhead is $281,600 at this level of activity,or $0.80 per unit.Fixed overhead is $440,000.The standard costs per unit are: Beluga actually produced 330,000 units at 75% of capacity and actual costs for the period were: Calculate the following variances and indicate whether each variance is favorable or unfavorable: (1)Direct labor efficiency variance: $__________________ (2)Direct materials price variance: $__________________ (3)Controllable overhead variance: $__________________

A company's flexible budget for 10,000 units of production reflects sales of $200,000;variable costs of $40,000;and fixed costs of $75,000.Calculate the expected level of operating income if the company produces and sells 13,000 units.

Lavoie Company planned to use 18,500 pounds of material costing $2.50 per pound to make 4,000 units of its product.In actually making 4,000 units,the company used 18,800 pounds that cost $2.54 per pound.Calculate the direct materials price variance.

A company's flexible budget for 48,000 units of production showed variable overhead costs of $72,000 and fixed overhead costs of $64,000.The company incurred overhead costs of $122,800 while operating at a volume of 40,000 units.The total controllable cost variance is:

Georgia Inc. ,has collected the following data on one of its products.The actual cost of the direct materials used is:

Fixed budgets are also known as flexible budgets.

Which of the following is not part of the flow of events in variance analysis:

Fletcher Company collected the following data regarding production of one of its products.Compute the direct materials price variance.

Job #411 was budgeted to require 3.5 hours of labor at $11.00 per hour.However,it was completed in 3 hours by a person who worked for $14.00 per hour.What is the total labor cost variance for Job #4115?

Whidbey Co.fixed budget for the year is shown below: Prepare a flexible budget for Whidbey Co.that shows a detailed budget for its actual sales volume of 42,000 units.Use the contribution margin format.

Summerlin Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units.The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units.What is the direct materials price variance?

Claymore Corp.has the following information about its standards and production activity for September.The controllable variance is:

Ransom,Inc.budgets direct materials cost at $1.10/liter and each product requires 4 liters per unit of finished product.April's activities show usage of 832 liters to complete 196 units at a cost of $798.72.Compute the direct materials price and quantity variances.Indicate if the variance is favorable or unfavorable.

A cost variance equals the difference between the quantity variance and the price variance.

Levelor Company's flexible budget shows $10,710 of overhead at 75% of capacity,which was the operating level achieved during May.However,the company applied overhead to production during May at a rate of $2.00 per direct labor hour based on a budgeted operating level of 6,120 direct labor hours (90% of capacity) .If overhead actually incurred was $11,183 during May,the controllable variance for the month was:

The difference between actual overhead costs incurred and the budgeted overhead costs based on a flexible budget is the:

Maxwell Co.collected the following information about its production activities for the current year. a.Compute the direct materials price and quantity variances and indicate whether each is favorable or unfavorable. b.Prepare the journal entry to record the issuance of direct materials into production. Actual costs and quantities: Direct materials used 95,000 lbs.@ $6.30 per lb. Units completed during the year,50,000 units Standard costs and quantities: Price per lb.of direct material,$6.05 Two lbs.of direct material per unit