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Exam 23: Flexible Budgets and Standard Costs

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Question 81

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Cavern Company's output for the current period results in a $5,250 unfavorable direct material price variance. The actual price per pound is $56.50 and the standard price per pound is $55.00. How many pounds of material are used in the current period?

A) 3,750.
B) 4,000.
C) 5,393.
D) 3,500.
E) 5,110.

F) C) and D)
G) C) and E)

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Question 82

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Direct materials variances are called price and quantity variances. However, when referring to direct labor, these variances are usually called ________and ___________variances.

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Question 83

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The difference between the flexible budget sales and the fixed budget sales is called the ________ variance.

A company's flexible budget for 36,000 units of production showed variable overhead costs of $54,000 and fixed overhead costs of $50,000. The company actually incurred total overhead costs of $95,300 while operating at a volume of 32,000 units. What is the controllable variance?

A company's flexible budget for 12,000 units of production showed sales, $48,000; variable costs, $18,000; and fixed costs, $16,000. The contribution margin expected if the company produces and sells 16,000 units is:

A company's flexible budget for 12,000 units of production showed sales, $48,000; variable costs, $18,000; and fixed costs, $16,000. The fixed costs expected if the company produces and sells 16,000 units is:

The difference between actual price per unit of input and the standard price per unit of input results in a:

Grant Co. uses the following standard to produce a single unit of its product: Variable overhead (2 hrs. per unit @ $4/hr.) Actual data for the month show total variable overhead costs of $190,000, and 23,000 units produced. The total variable overhead variance is:

During November, Gliem Company allocated overhead to products at the rate of $26.00 per direct labor hour. This figure was based on 80% of capacity or 1,600 direct labor hours. However, Gliem Company operated at only 70% of capacity, or 1,400 direct labor hours. Budgeted overhead at 70% of capacity is $38,900, and overhead actually incurred was $38,000. What is the company's volume variance for November? (Indicate whether the variance is favorable or unfavorable)

Milltown Company specializes in selling used cars. During the month, the dealership sold 22 cars at an average price of $15,000 each. The budget for the month was to sell 20 cars at an average price of $16,000. - Compute the dealership's sales price variance for the month.

The purchasing department is usually responsible for the price paid for materials.

Explain variance analysis. Describe how variance analysis assists managers.

Match the following definitions with the appropriate term

Differences between actual costs and standard costs are known as ________. These differences may be subdivided into ________ and ________.

A company has established 5 pounds of Material J at $2 per pound as the standard for the material in its Product Z. The company has just produced 1,000 units of this product, using 5,200 pounds of Material J that cost $9,880. The direct materials quantity variance is:

Parallel Enterprises has collected the following data on one of its products. During the period the company produced 25,000 units. The direct materials quantity variance is: Direct materials standard (7 kg. @ $2/kg) $ 14 per finished unit Actual cost of materials purchased $ 322,500 ^{Actual direct materials purchased and used 150,000} kg

Claremont Company specializes in selling refurbished copiers. During the month, the company sold 180 copiers at an average price of $3,000 each. The budget for the month was to sell 175 copiers at an average price of $3,200. - The expected total sales for 180 copiers were:

The following information describes production activities of the Midtown Corp.: $\begin{array}{llr} \text { Raw materials used } & \text { 16,000 lbs. at \$ 4.05 per \( \mathrm{lb} \)}\\ \text { Factory payroll } & \text { 5,545 hours for a total of \( \$ 72,085 \)} \\\end{array}$ 30,000 units were completed during the year Budgeted standards for each unit produced: 1/2 lb. of raw material at $4.15 per lb. 10 minutes of direct labor at $12.50 per hour Compute the direct materials price and quantity and the direct labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable.

The fixed overhead variance can be broken down into the ________ variance and the ________ variance.

Naches Co. assigned direct labor cost to its products in May for 1,300 standard hours of direct labor at the standard $8 per hour rate. The direct labor rate variance for the month was $200 favorable and the direct labor efficiency variance was $150 favorable. Prepare the journal entry to charge Work in Process Inventory for the standard labor cost of the goods manufactured in May and to record the direct labor variances. Assuming that the direct labor variances are immaterial, prepare the journal entry that Naches would make to close the variance accounts.