Exam 11: Standard Costs and Variances

The following information describes a company's usage of direct labor in a recent period: How much is the direct labor efficiency variance?

The standard for the direct labor rate per hour does not include fringe benefits such as health care insurance and vacations.

Sherwin Chemicals produces commercial strength cleansing supplies. Two of its main products are window cleanser that uses ammonia, and floor cleanser that uses bleach. Information for the most recent period follows: What is the direct materials price variance for ammonia?

Identify five benefits of standard costs.

McNabb Corporation makes shoe polish. The standard direct materials quantity is .5 pounds per container at a cost of $2.25 per pound. The actual usage for the production of 33,000 containers was .55 pounds per cushion at an actual cost of $2.20 per pound. Calculate the direct materials price variance and the direct materials quantity variance.

At lean companies, employees tend to be multi-skilled and cross-trained to perform a number of duties. These workers are held in high-esteem by management and are considered to be part of a team effort, rather than a labor force to be controlled. Consequently, this

The actual cost of direct labor per hour is $14.75. Two and one half standard direct labor hours are allowed per unit of finished goods. During the current period, 2,700 units were produced using 6,500 direct labor hours. The direct labor efficiency variance is $2,500 favorable. Calculate the standard direct labor rate per hour.

A(n)________ "arises because the number of units actually sold differs from the static budget units."

On the line in front of each variance, enter the letters of the items needed to compute that variance. You will enter more than one item on each line. A. Actual labor rate B. Actual labor hours C. Standard labor rate D. Standard labor hours ______ Direct labor rate variance ______ Direct labor efficiency variance

Raw materials inventory is credited for which of the following when recording the use of direct materials in the production process?

The ________ variance "measures how well the business keeps prices of direct labor inputs within standards".

Theresa Corporation, which manufactures baskets, is developing direct labor standards. The basic direct labor rate is $23.00 per hour. Payroll taxes are 10% of the basic direct labor rate, while fringe benefits such as vacation and health care insurance, are $8.00 per hour. What is the standard rate per direct labor hour?

Simon Sayz is a regional manufacturer of baby toys produced from plastic derived from organic and non-toxic sources. Management budgeted one-half hour of direct labor per toy at a standard rate of $12.50 per hour. The most current production run produced 1,850 toys and used 1,750 labor hours at a total cost of $22,750. What is the direct labor rate variance for this production run?

Standard costs for production inputs are used to develop flexible budgets.

Shamrock Manufacturing budgeted fixed overhead costs of $2.75 per unit at an anticipated production level of 1,350 units. In July Shamrock incurred actual fixed overhead costs of $4,400 and actually produced 1,300 units. What is Shamrock's fixed overhead volume variance for July?

Channel One Industries uses a standard costing system to apply manufacturing costs to its production process. In May, Channel One anticipated producing 2,450 units with fixed manufacturing overhead costs allocated at $7.40 per direct labor hour with a standard of 1.5 direct labor hours per unit. In May, actual production was 3,200 units and actual fixed manufacturing overhead costs were $23,000. What was Channel One's fixed manufacturing overhead budget variance for May?

What could cause a sales volume variance for fixed expenses?

Dozen Bakery makes cupcakes and cookies. Dozen gathered the following information for the current year regarding its use of flour and butter (flour is a direct material for cupcakes and butter is a direct material for cookies): What is the direct materials flexible budget variance for the flour in cupcakes?

The actual cost of direct materials is $10.50 per pound. The standard cost per pound is $10.25. During the current period, 9,100 pounds of direct materials were used in production and 17,500 pounds were purchased. The standard quantity of direct materials for actual units produced is 17,300 pounds. How much is the direct materials quantity variance?