Exam 8: Flexible Budgets and Variance Analysis

A static budget has multiple levels of activity.

The following information is for Pepper Pike Corporation: Direct Material Standard price per unit of input \ 20 Actual price per unit of input \ 18 Standard inputs allowed per unit of output 3 pounds Actual units of input 8,300 pounds Actual units of output 2,770 units * Direct material is measured in pounds _____ is the total direct-material flexible-budget variance.

Variances should be investigated if they _____.

Effectiveness is indicated by _____.

Pizza Company planned to produce 12,000 units.This level of activities required 40 set-ups at a cost of $18,000 plus $500 per set-up.Actual sales were 10,000 units, requiring 15 set-ups and 12,000 machine hours.Actual set-up cost was $26,000._____ is the static budget amount for set-ups.

The following information is for Brooklyn Corporation: Direct Material Standard price per unit of input \ 29 Actual price per unit of input \ 27 Standard inputs allowed per unit of output 3 pounds Actual units of input 9,000 pounds Actual units of output 3,000 units * Direct material is measured in pounds _____ is the direct-material price variance.

Strongsville Company produces 2,500 units.Each unit was expected to require 2 labor hours at a cost of $10 per hour.Total labor cost was $55,250 for 4,750 hours worked.Direct labor is measured in hours._____ is the direct-labor price variance.

The Vito Company makes tables for which the following standards have been developed: Standard Inputs Standard Frice Expected for Each Expected per Unit of Output Unit of Output Direct materials 10 pounds \ 4 per pound Direct labor 3 hours \ 16 per hour Production of 200 tables was expected in July, but 220 tables were actually completed. Direct materials purchased and used were 2,000 pounds at an actual price of $4.40 per pound.Direct-labor cost for the month was $10,620, and the actual pay per hour was $18.00._____ is the direct-material quantity variance for July.

Super Company produces 2,500 units.Each unit was expected to require 2 labor hours at a cost of $10 per hour.Total labor cost was $55,250 for 4,750 hours worked.Direct labor is measured in hours._____ is the total flexible-budget variance for direct labor.

_____ compares actual results with budget.

The following data for the Glass Company pertain to the produc?tion of 2,000 bottles during June: Standard variable-overhead cost: $26.00 per pound of glass. Total actual variable-overhead cost: $24,800. Standard variable-overhead cost allowed for units produced was $26,000. Variable-overhead efficiency variance was $540 unfavorable. _____ is standard direct-material amount per bottle.

A favorable materials price variance may lead to an unfavorable materials usage variance.

Ideal standards have an adverse effect on employee motivation.

Flat Company currently produces cardboard boxes in an automated process.Expected produc?tion per month is 50,000 units.The required direct materials cost is $0.30 per unit.Manufacturing fixed overhead costs are $25,000 per month.Manufacturing overhead is allocated based on units of production._____ is the budgeted manufacturing fixed overhead rate.

The following data for the Safety Company pertain to the produc?tion of 3,000 clay pigeons during July: Standard variable-overhead cost was $5.00 per pound of clay. Total actual variable-overhead cost was $11,340. Standard variable-overhead cost allowed for units produced was $12,000. Variable-overhead efficiency variance was $340 unfavorable. _____ is the variable-overhead rate variance.

The Violet Company makes mugs for which the following standards have been developed: Standard Inputs Standard Frice Expected for Each Expected per Unit of Output Unit of Output Direct materials 5 ounces \ 2 per ounce Direct labor 1.5 hours \ 8 per hour Production of 400 mugs was expected in June, but 440 mugs were actually completed. Direct materials purchased and used were 2,100 ounces at an actual price of $2.20 per ounce.Direct-labor cost for the month was $5,310, and the actual pay per hour was $9.00._____ is the direct-labor price variance for the month of June.

Loopy Company had the following information: At a manufacturing level of 5,000 units, variable and fixed manufacturing costs are $30 and $10 per unit, respectively.Selling price is $60 per unit._____ is the total manufacturing cost for 15,000 units.

Most organizations believe that it is not worthwhile to monitor individual overhead to the same extent as labor and material variances.

A variance that occurs when actual expenses are less than budgeted expenses

A _____ is most likely to be held directly accountable for a quantity variance.