Exam 25: Standard Costs and Balanced Scorecard

Purvis Manufacturing which produces a single product has prepared the following standard cost sheet for one unit of the product. Direct materials (6 pounds at \ 2 per pound) \ 12 Direct labor (2 hours at \ 12 per hour) \ 24 During the month of April the company manufactures 300 units and incurs the following actual costs. Direct materials purchased and used (1,850 pounds) \4 ,070 Direct labor (620 hours) \7 ,130 Instructions Compute the total price and quantity variances for materials and labor.

A materials quantity variance is calculated as the difference between the standard direct materials price and the actual direct materials price multiplied by the actual quantity of direct materials used.

It is possible that a company's financial statements may report inventories at

Pepper Industries uses a standard cost accounting system. During March 2016 the company reported the following manufacturing variances: Materials price variance \ 1,600 Materials quantity variance 2,400 Labor price variance 600 Labor quantity variance 2,200 Overhead controllable 500 Overhead volume 3,000 In addition 15000 units of product were sold at $18 per unit. Each unit sold had a standard cost of $14. Selling and administrative expenses for the month were $15000. Instructions Prepare an income statement for management for the month ending March 31 2016.

The following information was taken from the annual manufacturing overhead cost budget of Fergie Manufacturing. Variable manufacturing overhead costs \ 92,400 Fixed manufacturing overhead costs \ 55,440 Normal production level in labor hours 30,800 Normal production level in units 5,775 Standard labor hours per unit 4 During the year 5600 units were produced 18340 hours were worked and the actual manufacturing overhead was $151200. Actual fixed manufacturing overhead costs equaled budgeted fixed manufacturing overhead costs. Overhead is applied on the basis of direct labor hours. - Fergie's total overhead rate is

Dillon has a standard of 1.5 pounds of materials per unit at $6 per pound. In producing 2000 units Dillon used 3100 pounds of materials at a total cost of $18135. Dillon's total variance is

Most companies that use standards set them at

If 10000 pounds of direct materials are purchased for $9300 on account and the standard cost is $.90 per pound the journal entry to record the purchase is a. Raw Materials Inventory 9,300 Accounts Payable 9,300 b. Work In Process Inventory 9,300 Accounts Payable 9,000 Materials Quantity Variance 300 c. Raw Materials Inventory 9,300 Accounts Payable 9,000 Materials Price Variance 300 d. Raw Materials Inventory 9,000 Materials Quantity Variance 300 Accounts Payable 9,300

The standard number of hours allowed times the predetermined overhead rate is the amount of ________________ to the products produced.

An unfavorable materials quantity variance would occur if

Ideal standards will generally result in favorable variances for the company.

If a company incurs direct labor cost of $82000 when the standard cost is $84000 it will

The costing of inventories at standard cost for external financial statement reporting purposes is

Explain the similarities and differences between standards and budgets. (b) Contrast the accounting for standard and budgets.

The following direct labor data pertain to the operations of Pearce Corp. for the month of November: Instructions Prepare a matrix and calculate the labor variances.

Which is not one of the four most commonly used perspectives on a balanced scorecard?

Dillon has a standard of 1.5 pounds of materials per unit at $6 per pound. In producing 2000 units Dillon used 3100 pounds of materials at a total cost of $18135. Dillon's materials quantity variance is

If the standard hours allowed are less than the standard hours at normal capacity the volume variance

The predetermined overhead rate for Zane Company is $5 comprised of a variable overhead rate of $3 and a fixed rate of $2. The amount of budgeted overhead costs at normal capacity of $150000 was divided by normal capacity of 30000 direct labor hours to arrive at the predetermined overhead rate of $5. Actual overhead for June was $9500 variable and $6050 fixed and standard hours allowed for the product produced in June was 3000 hours. The total overhead variance is

During March Patt Inc. purchases and uses 8800 pounds of materials costing $35640 to make 4000 tiles. Patt's standard material cost per tile is $8 (2 pounds of material × $4.00). Instructions Compute the total price and quantity material variances for Patt Inc. for March.