Valatia Ltd has gathered the following data in preparing to record their direct labour payroll costs for the week: $\begin{array} { l l } \text { Actual hours worked } & 9,500 \\ \text { Standard hours allowed } & 10,000 \\ \text { Total direct labour variance } & \$ 1,810 \mathrm {~F} \\ \text { Direct labour price variance } & \$ 190 \mathrm { U } \end{array}$ The standard direct labour price was:

A) $4.00 B) $1.05 C) $5.52 D) $4.75 A) $4.00 B) $1.05 C) $5.52 D) $4.75 A

Given the following account balances at the end of the first year of operations: $\begin{array}{lr} \text { Direct materials inventory } & \$ 60,000 \\ \text { Work in process inventory } & 200,000 \\ \text { Finished goods inventory } & 200,000 \\ \text { Cost of goods sold } & 600,000 \\ \text { Direct material price variance } & 65,000 \mathrm{~F} \\ \text { Direct material efficiency } & 195,000 \mathrm{U} \end{array}$ Assuming that variances are considered material, the entry and amount of the direct material efficiency variance allocated to work in process inventory is:

A) Credit $39,000 B) Credit $36,792 C) Debit $36,792 D) Debit $39,000 A) Credit $39,000 B) Credit $36,792 C) Debit $36,792 D) Debit $39,000

Valatia Ltd has gathered the following data in preparing to record their direct labour payroll costs for the week: $\begin{array} { l l } \text { Actual hours worked } & 9,500 \\ \text { Stardard hours allowed } & 10,000 \\ \text { Total direct labour variance } & \$ 1,810 \mathrm {~F} \\ \text { Direct labour price variance } & \$ 190 \mathrm { U } \end{array}$ The actual direct labour costs were:

A) $38,000 B) $40,000 C) $37,810 D) $38,190 A) $38,000 B) $40,000 C) $37,810 D) $38,190

During the period Cash Spinner produced 2,000 units of product. The flexible budget for standard costs is: $\begin{array} { l r } \quad\quad\text { Direct materials } & \$ 43,000 \\ \quad\quad\text { Direct labor } & 67,000 \\ \quad\quad\text { Variable overhead } & 30,000 \\ \quad\quad\text { Fixed overhead } & 25,000 \\ \text { Variances for the period are: } & \\ \quad\quad\text { Direct materials price } & \$ 400 \mathrm { U } \\ \quad\text { Direct materials efficiency } & 500 \mathrm {~F} \\ \quad\text { Direct labor price } & 600 \mathrm {~F} \\ \quad\text { Direct labor efficiency } & 200 \mathrm { U } \\ \quad\text { Variable overhead spending } & 300 \mathrm {~F} \\ \quad\text { Variable overhead efficiency } & 100 \mathrm {~F} \\ \quad\text { Fixed overhead spending } & 500 \mathrm {~F} \\ \quad\text { Fixed overhead production volume } & 1,000 \mathrm { U } \end{array}$ The direct materials inventory increased during the period by 500 (at standard cost). What was the actual cost of direct materials purchased during the period?

A) $42,600 B) $42,900 C) $43,100 D) $43,400 A) $42,600 B) $42,900 C) $43,100 D) $43,400

Rilloto Ltd uses a standard costing system. Overhead costs are allocated based on direct labour hours. The standard variable overhead and fixed overhead rates are $3 and $10 per direct labour hour, respectively. Data relevant for the current period include: \[\begin{array} { | l | l | } \hline \text { Direct Materials Purchased } & 75,000 \mathrm { k } @ , \$ 11 \text { per kg } \\ \hline \text { Direct Materials Used } & 75,000 \mathrm { k } \\ \hline \begin{array} { l } \text { Standard quartity of direct materials for actual } \\ \text { production } \end{array} & 80,000 \mathrm {~kg} \\ \hline \text { Direct Materials stardard price } & \$ 13 \text { per kg } \\ \hline \text { Direct labour costs incured } & 76,000 @ \$ 14 \text { per hour } \\ \hline \begin{array} { l } \text { Standard Direct Lubour hours for actual } \\ \text { production } \end{array} & 78,000 \text { hours } \\ \hline \text { Stardard Direct Labour cost per hour } & \$ 15 \text { per hour } \\ \hline \text { Variable overhead costs incured } & \$ 231,210 \\ \hline \text { Fixed overhead costs ircured } & \$ 763,000 \\ \hline \end{array}\] The direct labour price variance is:

A) $30,000 F B) $30,000 U C) $76,000 F D) $76,000 U A) $30,000 F B) $30,000 U C) $76,000 F D) $76,000 U

Exam 9: Variance Analysis: Revenue and Cost

Consider the following data for Morethanmoney Ltd. Standard revenue per unit $10.00 Budgeted sales volume 5,000 Actual sales volume 5,500 Total standard cost per unit $8.00 Actual total revenue $53,900 The sales quantity variance for Morethanmoney Ltd is:

Free

(Multiple Choice)

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(81)

Question 1

Correct Answer:

Verified

D

The market size, market share and product mix variances are components of the:

Free

(Multiple Choice)

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Question 2

Correct Answer:

Verified

A

Valatia Ltd has gathered the following data in preparing to record their direct labour payroll costs for the week: Actual hours worked 9,500 Standard hours allowed 10,000 Total direct labour variance \ 1,810 Direct labour price variance \ 190 The standard direct labour price was:

Free

(Multiple Choice)

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(77)

Question 3

Correct Answer:

Verified

A

The sales price variance is favourable when the actual selling price exceeds the standard price.

(True/False)

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Question 4

Aztec Bromac budgeted the following cost standards for the current year: Direct materials = 2.8 kilos per unit @ $3.00 per kilo Direct labour = 1.5 hours per unit @ $6 per hour Actual production and costs were as follows: Units produced = 3,600 Direct materials used = 9,000 kg. Direct materials purchased = 10,000 kg. @ a cost of $29,000 Direct labour incurred = 4,000 hours at a cost of $26,000 The labour efficiency variance was

(Multiple Choice)

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(86)

Question 5

The direct materials price variance is calculated by (actual price - standard price) multiplied by quantity purchased.

(True/False)

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Question 6

Revenue drivers include competition, market share and brand strength.

(True/False)

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Question 7

The fixed overhead spending variance is the difference between the static budget and the actual fixed overhead cost.

(True/False)

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Question 8

Fixed overhead costs per unit have an inverse relationship to volume.

(True/False)

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Question 9

Which of the following variances is least likely to provide useful information for making decisions, if calculated as part of a comprehensive set of variances?

(Multiple Choice)

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Question 10

Given the following account balances at the end of the first year of operations: Direct materials inventory \ 60,000 Work in process inventory 200,000 Finished goods inventory 200,000 Cost of goods sold 600,000 Direct material price variance 65,000 Direct material efficiency 195,000 Assuming that variances are considered material, the entry and amount of the direct material efficiency variance allocated to work in process inventory is:

(Multiple Choice)

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Question 11

Valatia Ltd has gathered the following data in preparing to record their direct labour payroll costs for the week: Actual hours worked 9,500 Stardard hours allowed 10,000 Total direct labour variance \ 1,810 Direct labour price variance \ 190 The actual direct labour costs were:

(Multiple Choice)

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(79)

Question 12

A change in the price paid in materials will result in a direct materials efficiency variance.

(True/False)

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Question 13

The aggregation of favourable and unfavourable variances helps reveal operational problems.

(True/False)

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Question 14

During the period Cash Spinner produced 2,000 units of product. The flexible budget for standard costs is: Direct materials \ 43,000 Direct labor 67,000 Variable overhead 30,000 Fixed overhead 25,000 Variances for the period are: Direct materials price \ 400 Direct materials efficiency 500 Direct labor price 600 Direct labor efficiency 200 Variable overhead spending 300 Variable overhead efficiency 100 Fixed overhead spending 500 Fixed overhead production volume 1,000 The direct materials inventory increased during the period by 500 (at standard cost). What was the actual cost of direct materials purchased during the period?

(Multiple Choice)

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Question 15

Variances for costs including material and labour can be broken down into price and efficiency variances.

(True/False)

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Question 16

The static budget compared to the flexible budget provides the profit variance that is due to volume difference.

(True/False)

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Question 17

Rilloto Ltd uses a standard costing system. Overhead costs are allocated based on direct labour hours. The standard variable overhead and fixed overhead rates are $3 and $10 per direct labour hour, respectively. Data relevant for the current period include: Direct Materials Purchased 75,000@,\ 11 per kg Direct Materials Used 75,000 Standard quartity of direct materials for actual production 80,000 Direct Materials stardard price \ 13 per kg Direct labour costs incured 76,000@\ 14 per hour Standard Direct Lubour hours for actual production 78,000 hours Stardard Direct Labour cost per hour \ 15 per hour Variable overhead costs incured \ 231,210 Fixed overhead costs ircured \ 763,000 The direct labour price variance is:

(Multiple Choice)

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(81)

Question 18

The fixed overhead spending variance is related to the variable overhead efficiency variance.

(True/False)

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Question 19

AASB 102 requires that variances relating to over and under applied overhead should be pro-rated between cost of sales and inventory.

(True/False)

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Question 20

Consider the following data for Morethanmoney Ltd. Standard revenue per unit $10.00 Budgeted sales volume 5,000 Actual sales volume 5,500 Total standard cost per unit $8.00 Actual total revenue $53,900 The sales quantity variance for Morethanmoney Ltd is:

The market size, market share and product mix variances are components of the:

Valatia Ltd has gathered the following data in preparing to record their direct labour payroll costs for the week: Actual hours worked 9,500 Standard hours allowed 10,000 Total direct labour variance \ 1,810 Direct labour price variance \ 190 The standard direct labour price was:

The sales price variance is favourable when the actual selling price exceeds the standard price.

The direct materials price variance is calculated by (actual price - standard price) multiplied by quantity purchased.

Revenue drivers include competition, market share and brand strength.

The fixed overhead spending variance is the difference between the static budget and the actual fixed overhead cost.

Fixed overhead costs per unit have an inverse relationship to volume.

Which of the following variances is least likely to provide useful information for making decisions, if calculated as part of a comprehensive set of variances?

Valatia Ltd has gathered the following data in preparing to record their direct labour payroll costs for the week: Actual hours worked 9,500 Stardard hours allowed 10,000 Total direct labour variance \ 1,810 Direct labour price variance \ 190 The actual direct labour costs were:

A change in the price paid in materials will result in a direct materials efficiency variance.

The aggregation of favourable and unfavourable variances helps reveal operational problems.

Variances for costs including material and labour can be broken down into price and efficiency variances.

The static budget compared to the flexible budget provides the profit variance that is due to volume difference.

The fixed overhead spending variance is related to the variable overhead efficiency variance.

AASB 102 requires that variances relating to over and under applied overhead should be pro-rated between cost of sales and inventory.

The Role of Accounting Information in Management Decision Making

Cost Concepts, Behaviour and Estimation

A Costing Framework and Cost Allocation

Costvolumeprofit Cvp Analysis

Planning Budgeting and Behaviour

Operational Budgets

Job and Process Costing Systems

Flexible Budgets, Standard Costs and Variance Analysis

Activity Analysis: Costing and Management

Relevant Costs for Decision Making

Strategy and Control

Capital Budgeting and Strategic Investment Decisions

The Strategic Management of Costs and Revenues

Strategic Management Control: a Lean Perspective

Responsibility Accounting, Performance Evaluation and Transfer Pricing

The Balanced Scorecard and Strategy Maps

Rewards, Incentives and Risk Management

Sustainability Management Accounting

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