Exam 25: Standard Costs and Balanced Scorecard

All Urban Company produces a product requiring 4 pounds of material costing $3.50 per pound. During December All Urban purchased 4200 pounds of material for $14112 and used the material to produce 500 products. What was the materials price variance for December?

Allowances should not be made in the direct labor quantity standard for

The cost of freight-in

A standard differs from a budget because a standard

Income statements prepared internally for management often show cost of goods sold at standard cost and variances are

Setting standard costs is relatively simple because it is done entirely by accountants.

An overhead volume variance is calculated as the difference between normal capacity hours and standard hours allowed

Monte Industries has a standard costing system. The following data are available for July: a. Actual manufacturing overhead cost incurred: $22000 b. Actual machine hours worked: 1600 c. Overhead volume variance: $3600 Unfavorable d. Total overhead variance: $2000 Unfavorable e. Overhead is assigned to production on the basis of machine hours Instructions Determine the amount of (1) the controllable overhead variance and (2) the overhead applied.

Information on Jayhawk's direct labor costs for the month of August is as follows: Actual rate \ 10 Standard hours 11,000 Actual hours 10,000 Direct labor price variance\_unfavorable \ 4,000 What was the standard rate for August?

The difference between actual quantity of materials times the standard price and standard quantity times the standard price is the materials ________________ variance.

Edgar Inc. has a materials price standard of $2.00 per pound. Six thousand pounds of materials were purchased at $2.20 a pound. The actual quantity of materials used was 6000 pounds although the standard quantity allowed for the output was 5400 pounds. Edgar Inc.'s total materials variance is

If a company assigns factory labor to production at a cost of $84000 when standard cost is $80000 it will

In Zero Company's income statement they report gross profit of $55000 at standard and the following variances: Materials price \ 420 Materials quantity 600 Labor price 420 Labor quantity 1,000 Overhead 900 Zero would report actual gross profit of

During January Ajax Co. incurs 1850 hours of direct labor at an hourly cost of $11.80 in producing 1000 units of its finished product. Ajax standard labor cost per unit of output is $22 (2 hours x $11.00). Instructions Compute the total price and quantity labor variances for Ajax Co. for January.

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 $8900 variable and $5400 fixed and 1500 units were produced. The direct labor standard is 2 hours per unit produced. The total overhead variance is

In reviewing the activities of the Mixing Department for the month of June the manager of the department notices that there was an unfavorable materials price variance for the month and there was an unfavorable materials quantity variance. Under what circumstances if any can the responsibility for each variance be placed on (a) the purchasing department and (b) the production department?

Howard Inc. developed the following standards for 2016: The company planned to produce 120000 units of product and work at the 120000 direct labor level of activity in 2016. The company uses a standard cost accounting system which records standard costs in the accounts and recognizes variances in the accounts at the earliest opportunity. During 2016 116000 actual units of product were produced. Instructions Prepare the journal entries to record the following transactions for Howard Inc. during 2016. (a) Purchased 588000 pounds of raw materials for $4.90 per pound on account. (b) Actual direct labor payroll amounted to $2108000 for 114000 actual direct labor hours worked. Factory labor cost is to be recorded and distributed to production. (c) Direct materials issued for production amounted to 588000 pounds which actually cost $4.90 per pound. (d) Actual manufacturing overhead costs incurred were $1152000 in 2016. (e) Manufacturing overhead was applied when the 116000 units were completed. (f) Transferred the 116000 completed units to finished goods.

Shep Corporation estimated it would produce 6200 buckets though actual production was 6000 during August. The standard labor cost is 2 buckets per hour at $18.00 per hour. Actual cost per hour was $18.40 with a total labor cost of $53360. Instructions Determine the amounts of the labor price and the labor quantity variances for August.

The direct materials price standard should include an amount for all of the following except

Once set normal standards should not be changed during the year.