Exam 13: Budgeting and Standard Costs

Nonmanufacturing activities are usually controlled using a static budget rather than a standard costing system.

Once a static budget has been determined, it is changed regularly as the underlying activity changes.

As of January 1 of the current year, the Butner Company had accounts receivables of $50,000.Sales for January, February, and March were as follows: $120,000, $140,000, and $150,000.20% of each month's sales are for cash.Of the remaining 80% (the credit sales), 60% are collected in the month of sale, with the remaining 40% collected in the following month.What is the total cash collected (both from accounts receivable and for cash sales) in the month of February?

The following data relate to direct labor costs for the current period of Executive Inc.: Standard costs 6,000 hours at \ 12.00 Actual costs 7,500 hours at \ 11.60 ? What is the direct labor rate variance?

A formal written statement of management's plans for the future, expressed in financial terms, is called a budget.

The following data is given for the Walker Company: Budgeted production 1,000 units Actual production 980 units Materials: Standard price per lb \ 2.00 Standard pounds per completed unit 12 Actual pounds purchased and used in production 11,800 Actual price paid for materials \ 23,000 Labor: Standard hourly labor rate \ 14 per hour Standard hours allowed per completed unit 4.5 Actual labor hours worked 4,560 Actual total labor costs \ 62,928 Overhead: Actual and budgeted fixed overhead \2 7,000 Standard variable overhead rate \ 3.50 per standard labor hour Actual variable overhead costs \1 5,500 Overhead is applied on standard labor hours. ? The factory overhead volume variance is:

It would be most appropriate to develop direct labor time standards for use in administrative activities when the activity involves:

Which of the following processes is involved in budgeting?

Fixed factory overhead volume variance is the difference between:

Normally standard costs should be revised when labor rates change to incorporate new union contracts.

A _____ summarizes actual costs, standard costs, and the differences for the units produced.

The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are as follows: Standard Costs Direct materials (per completed unit) $\quad 1.04$ kilograms $@ \$ 8.75$ Actual Costs Direct materials $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 2,500 kilograms $@ \$ 8$ ? The amount of direct materials price variance is:

The formula to compute direct material quantity variance is:

Standard and actual costs for direct labor for the manufacture of 1,500 units of product were as follows: Actual costs 450 hours @\ 17.00 Standard costs 455 hours @\ 16.50 ? Determine the (a) time variance, (b) rate variance, and (c) total direct labor cost variance.

Prepare a monthly flexible selling expense budget for Podism Company for sales volumes of $270,000, $350,000, and $480,000, based on the following data: Sales commissions 7\% of sales Sales manager's salary \ 62,000 per month Advertising expense \ 70,000 per month Shipping expense 2\% of sales Miscellaneous selling expense \ 2,500 per month plus 1/2\% of sales

The standard cost is a detailed estimate of how much a product should cost.

Standard costs serve as a device for measuring efficiency.

The standard factory overhead rate is $12 per machine hour ($10 for variable factory overhead and $2 for fixed factory overhead) based on 100% capacity of 42,000 machine hours.The standard cost and the actual cost of factory overhead for the production of 2,000 units were as follows: Actual: Variable factory overhead \ 350,500 Fixed factory overhead 84,000 Standard: 35,000 hours @\ 12 420,000 ? Determine the (a) volume variance, (b) controllable variance, and (c) total factory overhead cost variance.