Exam 25: Budgetary Control and Responsibility Accounting

A company developed the following per-unit standards for its product: 2 gallons of direct materials at $6 per gallon. Last month, 3,000 gallons of direct materials were purchased for $17,100. The direct materials price variance for last month was

National Sporting Goods Company manufactures aluminum baseball bats that it sells to university athletic departments. It has developed the following per unit standard costs for 2011 for each baseball bat: In 2011, the company planned to produce 80,000 baseball bats at a level of 40,000 hours of direct labor. Actual results for 2011 are presented below: 1. Direct materials purchases were 164,000 pounds of aluminum which cost $688,800. 2. Direct materials used were 145,000 pounds of aluminum. 3. Direct labor costs were $379,270 for 39,100 direct labor hours actually worked. 4. Total manufacturing overhead was $235,000. 5. Actual production was 76,000 baseball bats. Instructions (a) Compute the following variances: 1. Direct materials price. 2. Direct materials quantity. 3. Direct labor price. 4. Direct labor quantity. 5. Total overhead variance. (b) Prepare the journal entries to record the transactions and events in 2011.

LRF, Inc. produces a product requiring 4 pounds of material costing $2.50 per pound. During December, LRF purchased 4,200 pounds of material for $10,080 and used the material to produce 500 products. What was the materials price variance for December?

The following direct labor data pertain to the operations of Hainey Manufacturing Company for the month of November: Standard labor rate $10.00 per hr. Actual hours incurred and used 4,500 The standard cost card shows that 2.5 hours are required to complete one unit of product. The actual labor rate incurred exceeded the standard rate by 10%. Two thousand units were manu-factured in November. Instructions (a) Calculate the price, quantity, and total labor variances. (b) Journalize the entries to record the labor variances.

The most rigorous of all standards is the

The following information was taken from the annual manufacturing overhead cost budget of Coen Company. During the year, 5,600 units were produced, 18,340 hours were worked, and the actual manufacturing overhead was $75,600. Actual fixed manufacturing overhead costs equaled budgeted fixed manufacturing overhead costs. Overhead is applied on the basis of direct labor hours. Coen's total overhead rate is

The formula for the materials price variance is

The balanced scorecard approach

A favorable variance

If actual costs are less than standard costs, the variance is favorable.

If the actual direct labor hours worked is greater than the standard hours, the labor quantity variance will be ___________________, and the labor rate variance will be ____________________ if the standard rate of pay is greater than the actual rate of pay.

Herrera Co. produces a product requiring 10 pounds of material at $1.50 per pound. Herrera produced 10,000 units of this product during 2009 resulting in a $30,000 unfavorable materials quantity variance. How many pounds of direct material did Herrera use during 2011?

The overhead controllable variance relates primarily to fixed overhead costs.

In using variance reports, top management normally looks for _________________ variances.

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

Overhead data for Falk Inc. are given in BE 164. In addition, the flexible manufacturing overhead budget shows that budgeted costs are $3.50 variable per direct labor hour and $75,000 fixed. Instructions Compute the manufacturing overhead controllable variance.

If actual direct materials costs are greater than standard direct materials costs, it means that

The materials price variance is normally caused by the production department.

The standard unit cost is used in the calculation of which of the following variances?

The cost of freight-in