In Command Ltd completed operations for the week and the accountant was preparing to make journal entries necessary to prepare a set of interim financial statements. Unfortunately, he discovered some of the data concerning direct materials had been lost. He was able to find the following: \[\begin{array} { l l } \text { Efficiency variance } & \$ 9,000 \text { Unfavourable } \\ \text { Stardard price } & \$ 10 \text { per urit } \\ \text { Actual units purchased } & 18,000 \\ \text { Inventory decrease } & 1,000 \text { units } \\ \text { Budget variance } & \$ 1,800 \text { Favourable } \end{array}\] The actual direct materials price paid per unit was:

A) $9.60 B) $9.40 C) $10.00 D) $10.60 A) $9.60 B) $9.40 C) $10.00 D) $10.60

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). The variable overhead allocated was:

A) $29,600 B) $30,000 C) $29,900 D) $30,400 A) $29,600 B) $30,000 C) $29,900 D) $30,400

Scenesay Ltd is a capital intensive firm. Indirect costs make up nearly 70% of the product costs. The company has no direct material costs because customers provide the direct materials used for each job. To plan and control such costs, the firm employs flexible budgets and standard costs. Overhead rates, based on direct labour hours, are derived from the master budget. \[\begin{array} { | l | l | l | } \hline & \text { Master Budget } & \text { Actual Results } \\ \hline \text { Units produced } & 4,000 &3 , 6 2 0 \\ \hline \text { Direct Labour Hours } & 10,000 & 11,000 \\ \hline \text { Fixed Overhead } & \$ 200,000 & \$ 205,000 \\ \hline \text { Variable Overhead } & \$ 320,000 & \$ 355,000 \\ \hline \text { Direct Labour } & \$ 200,000 & \$ 180,000 \\ \hline \end{array}\] The direct labour efficiency variance was:

A) $39,000 F B) $7,000 U C) $39,000 U D) $7,000 F A) $39,000 F B) $7,000 U C) $39,000 U D) $7,000 F

Exam 9: Variance Analysis: Revenue and Cost

In Command Ltd completed operations for the week and the accountant was preparing to make journal entries necessary to prepare a set of interim financial statements. Unfortunately, he discovered some of the data concerning direct materials had been lost. He was able to find the following: Efficiency variance \ 9,000 Unfavourable Stardard price \ 10 per urit Actual units purchased 18,000 Inventory decrease 1,000 units Budget variance \ 1,800 Favourable The actual direct materials price paid per unit was:

(Multiple Choice)

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Question 141

The variable overhead spending variance is the difference between actual variable overhead costs and the expected variable overhead costs for the actual use of the allocation base.

(True/False)

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Question 142

If manufacturing cost variances are considered to be material the preferred treatment is to pro rata the variance to work in process, finished goods inventory and cost of sales.

(True/False)

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Question 143

The journal entry to record the use of direct materials for Aztec Bromac is:

(Multiple Choice)

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Question 144

The market share variance provides an indication of the changes in contribution margin due to selling a different mix of products than planned.

(True/False)

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Question 145

Castinata Co. uses a standard job cost system and a denominator volume of 25,000 direct labour hours for allocating overhead. The actual output was 12,000 units, which cost $185,700 for direct labour (23,000 hours), $28,000 for variable overhead, and $150,000 for fixed overhead. The standard variable overhead per unit is $2 (2 hours @ $1 per hour), and the standard fixed overhead per unit is $10 (2 hours @ $5 per hour). All variances are immaterial and are closed to Cost of Sales at the end of the period. The entry to close the variable overhead variances includes a:

(Multiple Choice)

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Question 146

The information required for the market size variance is collected by the marketing department.

(True/False)

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Question 147

Tycoon Manufacturing uses a standard costing system. The standard time to produce one unit is 4 hours, and normal production is 5,000 units monthly. Overhead costs were estimated to be $250,000. The standard variable overhead rate is $5 per machine hour. During October the following results were recorded: Units produced 4,900 Units sold 4,600 Machine hours required 20,500 Actual overhead cost \ 248,000 The fixed overhead production volume variance was:

(Multiple Choice)

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Question 148

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). The variable overhead allocated was:

(Multiple Choice)

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Question 149

In standard costing the price and efficiency variances account for the differences between actual and standard costs in the ledger accounts.

(True/False)

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Question 150

Fixed costs remain the same for both the budgeted level of volume and the static budget level of volume.

(True/False)

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Question 151

Misc Ltd entered into a new contract with one of its raw material suppliers. The new contract required the supplier to deliver raw materials with a 24-hour notice from Misc. This reduces Misc's material handling costs, but has increased the cost of the raw materials delivered. Which of the following variances is most likely to result?

(Multiple Choice)

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Question 152

Actual overhead costs are allocated to inventory each period.

(True/False)

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Question 153

The direct materials efficiency variance is favourable when direct materials used is less than expected for the actual level of output.

(True/False)

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Question 154

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 material efficiency variance was:

(Multiple Choice)

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Question 155

Scenesay Ltd is a capital intensive firm. Indirect costs make up nearly 70% of the product costs. The company has no direct material costs because customers provide the direct materials used for each job. To plan and control such costs, the firm employs flexible budgets and standard costs. Overhead rates, based on direct labour hours, are derived from the master budget. Master Budget Actual Results Units produced 4,000 3,620 Direct Labour Hours 10,000 11,000 Fixed Overhead \ 200,000 \ 205,000 Variable Overhead \ 320,000 \ 355,000 Direct Labour \ 200,000 \ 180,000 The direct labour efficiency variance was:

(Multiple Choice)

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Question 156

The sales price variance is caused by a difference in the volume of units sold.

(True/False)

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Question 157

Showing 141 - 157 of 157

The variable overhead spending variance is the difference between actual variable overhead costs and the expected variable overhead costs for the actual use of the allocation base.

If manufacturing cost variances are considered to be material the preferred treatment is to pro rata the variance to work in process, finished goods inventory and cost of sales.

The journal entry to record the use of direct materials for Aztec Bromac is:

The market share variance provides an indication of the changes in contribution margin due to selling a different mix of products than planned.

The information required for the market size variance is collected by the marketing department.

In standard costing the price and efficiency variances account for the differences between actual and standard costs in the ledger accounts.

Fixed costs remain the same for both the budgeted level of volume and the static budget level of volume.

Actual overhead costs are allocated to inventory each period.

The direct materials efficiency variance is favourable when direct materials used is less than expected for the actual level of output.

The sales price variance is caused by a difference in the volume of units sold.

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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