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Exam 9: Standard Costing and Variances

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Question 21

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Exeter has a material standard of 1 pound per unit of output. Each pound has a standard price of $26 per pound. During July, Exeter paid $66,100 for 2,475 pounds, which it used to produce 2,350 units. What is the direct materials quantity variance?

A) $1,750 unfavorable
B) $1,300 favorable
C) $3,250 unfavorable
D) $4,550 unfavorable

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

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Question 22

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Avon Co. has a favorable fixed overhead spending variance of $2,800. During February, Avon budgeted to produce 2,500 units, it actually produced 2,400 units, and it budgeted $75,000 for fixed overhead. How much was actually spent on fixed overhead?

A) $72,000
B) $72,200
C) $75,000
D) $77,800

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

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Question 23

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Delmar Inc. uses a standard cost system. Labor standards are 2 hours per widget at $13.30 per hour. During August, Delmar Inc. paid its workers $226,338 for 16,800 hours. Delmar Inc. produced 8,600 widgets during August. Calculate the: a. direct labor rate variance. b. direct labor efficiency variance.

Jupiter Co. applies overhead based on direct labor hours. The variable overhead standard is 4 hours at $12 per hour. During February, Jupiter Co. spent $113,400 for variable overhead. 9,150 labor hours were used to produce 2,400 units. What is the variable overhead efficiency variance?

The difference between budgeted volume and practical capacity, multiplied by the fixed overhead rate, is the:

Tulip Inc. uses standard costing, and its manufacturing standards are as follows: 2 pounds of materials at $13 per pound, and 3 hours of labor at $10 per hour. Budgeted production last period was 5,000 units, and actual production was 4,800 units. Last period, Tulip purchased and used 9,800 pounds of materials for $135,000, and used 15,000 labor hours, costing $145,000. What is the journal entry to record the purchase of materials?

Regency Corp. uses a standard cost system to account for the costs of its one product. Fixed overhead is applied to production at a rate of $27.50 per unit, based on budgeted production is 2,500 per month. During November, Regency produced 2,300 units. Fixed overhead incurred totaled $70,310. Calculate the: a. fixed overhead spending variance. b. fixed overhead volume variance. c. over- or under-applied fixed overhead.

The variable overhead rate variance is the difference between the actual variable overhead rate and the standard variable overhead rate multiplied by the actual value of the cost driver

Wisteria Co. produces snowboards and uses a standard cost system. Variable overhead is applied using direct labor hours. Standards allowed for each unit are 5.2 hours of labor at a standard variable overhead rate of $6.60. During December, Wisteria Co. produced 3,100 snowboards. Materials purchases totaled 20,800 pounds at a total cost of $224,780. Materials usage totaled 20,970 pounds. Payroll totaled $183,660 for 17,140 hours worked. Variable overhead incurred totaled $109,140. Calculate the: a. variable overhead rate variance. b. variable overhead efficiency variance.

Warner Co. has budgeted fixed overhead of $150,000. Practical capacity is 6,000 units, and budgeted production is 5,000 units. During February, 4,800 units were produced and $155,600 was spent on fixed overhead. What is the total fixed overhead capacity variance?

Fixed overhead does not have separate price and quantity variances

Jupiter Co. applies overhead based on direct labor hours. The variable overhead standard is 4 hours at $12 per hour. During February, Jupiter Co. spent $113,400 for variable overhead. 9,150 labor hours were used to produce 2,400 units. What is the variable overhead rate variance?

A fixed overhead rate based on _______________ highlights for management attention the cost of unutilized capacity.

The overall difference between the actual and applied manufacturing overhead is the:

Wallace Inc. uses a standard cost system and has provided the following information: Budgeted production = 6,000 units Prepare the journal entries to record the following transactions. Assume Wallace Inc. does not maintain inventories other than direct materials. a. Purchase of direct materials on account b. Issuance of direct materials to production c. Incurrence of direct labor d. Incurrence and application of variable overhead. e. Incurrence and application of fixed overhead

The standard labor rate is:

Venus Company applies overhead based on direct labor hours. The variable overhead standard is 10 hours at $3.50 per hour. During October, Venus Company spent $157,600 for variable overhead. 47,440 labor hours were used to produce 4,800 units. What is the variable overhead efficiency variance?

Standard cost systems depend on which two types of standards?

A standard cost system initially records manufacturing costs at the standard rather than the actual amount

Who would typically be responsible for the direct material quantity variance?