Question 1

The variable overhead efficiency variance is:

Accepted Answer

A)  $430 U. 
B)  $740 F. 
C)  $950 U. 
D)  $1,120 F. 
A)  $430 U. 
B)  $740 F. 
C)  $950 U. 
D)  $1,120 F. D

Question 2

Lido Company's standard and actual costs per unit for the most recent period,during which 400 units were actually produced,are given below:

Accepted Answer

All materials used were purchased during the period - there were no opening or closing inventories.
Required:
From the foregoing information,compute the following variances.Show whether the variance is favourable (F)or unfavourable (U):
a.Material price variance
b.Material quantity variance
c.Direct labour rate variance
d.Direct labour efficiency variance
e.Variable overhead spending variance
f.Variable overhead efficiency variance
a.Material price variance = AQ(AP - SP)
= (2.1 × 400)× ($1.60 - $1.50)
= $84 U
b.Material quantity variance = SP(AQ - SQ)
= $1.50(2.1 × 400 - 2.0 × 400)
= $60 U
c.Direct labour rate variance = AH(AR - SR)
= (1.4 × 400)× ($6.50 - $6.00)
= $280 U
d.Direct labour efficiency variance = SR(AH - SH)
= $6.00(1.4 × 400 - 1.5 × 400)
= $240 F
e.Variable overhead spending variance = AH(AR - SR)
= (1.4 × 400)× ($3.10 - $3.40)
= $168 F
f.Variable overhead efficiency variance = SR(AH - SH)
= $3.40(1.4 × 400 - 1.5 × 400)
= $136 F

Question 3

The standard hours allowed to make one unit of finished product are:

Accepted Answer

A)  1.0. 
B)  1.2. 
C)  1.5. 
D)  2.0. 
A)  1.0. 
B)  1.2. 
C)  1.5. 
D)  2.0. C

Question 4

The variable overhead efficiency variance is:

Accepted Answer

A)  $500 F. 
B)  $500 U. 
C)  $520 U. 
D)  $520 F. 
A)  $500 F. 
B)  $500 U. 
C)  $520 U. 
D)  $520 F.

Question 5

What is the variable overhead spending variance for the month?

Accepted Answer

A)  $1,715 U. 
B)  $1,715 F. 
C)  $2,870 U. 
D)  $2,870 F. 
A)  $1,715 U. 
B)  $1,715 F. 
C)  $2,870 U. 
D)  $2,870 F.

Question 6

Agatha Company produced 4,000 units of Red Apple products.Each unit requires 0.5 standard hours.The standard labour rate is $12 per hour.Actual direct labour for the period was $22,000 (2,200 hours x $10 per hour).The direct labour efficiency variance is:

Accepted Answer

A)  $2,000 U. 
B)  $2,400 U. 
C)  $8,000 F. 
D)  $8,100 F. 
A)  $2,000 U. 
B)  $2,400 U. 
C)  $8,000 F. 
D)  $8,100 F.

Question 7

The labour rate variance for January is:

Accepted Answer

A)  $475 F. 
B)  $475 U. 
C)  $585 F. 
D)  $585 U. 
A)  $475 F. 
B)  $475 U. 
C)  $585 F. 
D)  $585 U.

Question 8

The standards that allow for no machine breakdowns or other work interruptions and that require peak efficiency at all times are referred to as:

Accepted Answer

A)  normal standards. 
B)  practical standards. 
C)  ideal standards. 
D)  budgeted standards. 
A)  normal standards. 
B)  practical standards. 
C)  ideal standards. 
D)  budgeted standards.

Question 9

The total standard cost for direct labour for May was:

Accepted Answer

A)  $120,000. 
B)  $161,000. 
C)  $168,000. 
D)  $180,000. 
A)  $120,000. 
B)  $161,000. 
C)  $168,000. 
D)  $180,000.

Question 10

The total standard cost for variable overhead for May was:

Accepted Answer

A)  $40,000. 
B)  $50,000. 
C)  $56,000. 
D)  $60,000. 
A)  $40,000. 
B)  $50,000. 
C)  $56,000. 
D)  $60,000.

Question 11

The production manager is usually held responsible for the labour efficiency variance.

Accepted Answer

A) True 
 B)False

Question 12

In a performance report,actual costs should be compared to budgeted costs at the original budgeted activity level.

Accepted Answer

A) True 
 B)False

Question 13

The standard variable overhead rate per direct labour hour is:

Accepted Answer

A)  $6.91. 
B)  $6.95. 
C)  $7.00. 
D)  $7.12. 
A)  $6.91. 
B)  $6.95. 
C)  $7.00. 
D)  $7.12.

Question 14

Determine labour efficiency variance:

Accepted Answer

Actual Time 16,600
S

Question 15

A flexible budget is a budget that is developed using budgeted revenue or cost amounts and is not adjusted at the end of the budgeted period.

Accepted Answer

A) True 
 B)False

Question 16

Yola Company manufactures a product with standards for direct labour of 4 direct labour-hours per unit at a cost of $12.00 per direct labour-hour.During June,1,000 units were produced using 4,100 hours at $12.20 per hour.The direct labour efficiency variance was:

Accepted Answer

A)  $1,200 favourable. 
B)  $1,200 unfavourable. 
C)  $2,020 favourable. 
D)  $2,020 unfavourable. 
A)  $1,200 favourable. 
B)  $1,200 unfavourable. 
C)  $2,020 favourable. 
D)  $2,020 unfavourable.

Question 17

Under a standard cost system,the material price variances are usually the responsibility of the:

Accepted Answer

A)  production manager. 
B)  sales manager. 
C)  purchasing manager. 
D)  engineering manager. 
A)  production manager. 
B)  sales manager. 
C)  purchasing manager. 
D)  engineering manager.

Question 18

In a standard cost system,the resources applied to production are recorded as additions to work in process inventory using the standard quantities and the standard prices for each actual unit added.

Accepted Answer

A) True 
 B)False

Question 19

Determine the total material cost variance:

Accepted Answer

Price Variance of $4

Question 20

Management by exception means that a manager's attention is directed toward those parts of the organization where variances between actual and budget are significant.

Accepted Answer

A) True 
 B)False

The variable overhead efficiency variance is:

Lido Company's standard and actual costs per unit for the most recent period,during which 400 units were actually produced,are given below:

The standard hours allowed to make one unit of finished product are:

The variable overhead efficiency variance is:

What is the variable overhead spending variance for the month?

Agatha Company produced 4,000 units of Red Apple products.Each unit requires 0.5 standard hours.The standard labour rate is $12 per hour.Actual direct labour for the period was $22,000 (2,200 hours x $10 per hour).The direct labour efficiency variance is:

The labour rate variance for January is:

The standards that allow for no machine breakdowns or other work interruptions and that require peak efficiency at all times are referred to as:

The total standard cost for direct labour for May was:

The total standard cost for variable overhead for May was:

The production manager is usually held responsible for the labour efficiency variance.

In a performance report,actual costs should be compared to budgeted costs at the original budgeted activity level.

The standard variable overhead rate per direct labour hour is:

Determine labour efficiency variance:

A flexible budget is a budget that is developed using budgeted revenue or cost amounts and is not adjusted at the end of the budgeted period.

Yola Company manufactures a product with standards for direct labour of 4 direct labour-hours per unit at a cost of $12.00 per direct labour-hour.During June,1,000 units were produced using 4,100 hours at $12.20 per hour.The direct labour efficiency variance was:

Under a standard cost system,the material price variances are usually the responsibility of the:

In a standard cost system,the resources applied to production are recorded as additions to work in process inventory using the standard quantities and the standard prices for each actual unit added.

Determine the total material cost variance:

Management by exception means that a manager's attention is directed toward those parts of the organization where variances between actual and budget are significant.

An Introduction to Managerial Accounting and Cost Concepts

Systems Design: Job-Order Costing

Systems Design: Activity-Based Costing

Systems Design: Process Costing

Cost Behavior: Analysis and Use

Cost-Volume-Profit Relationships

Profit Planning

Standard Costs

Flexible Budgets and Overhead Analysis

Decentralization

Capital Budgeting Decisions

How Well Am I Doing Statement of Cash Flows

How Well Am I Doing Financial Statement Analysis

Filters

Exam 11: Relevant Costs for Decision Making

The variable overhead efficiency variance is:

Lido Company's standard and actual costs per unit for the most recent period,during which 400 units were actually produced,are given below:

The standard hours allowed to make one unit of finished product are:

The variable overhead efficiency variance is:

What is the variable overhead spending variance for the month?

Agatha Company produced 4,000 units of Red Apple products.Each unit requires 0.5 standard hours.The standard labour rate is $12 per hour.Actual direct labour for the period was $22,000 (2,200 hours x $10 per hour).The direct labour efficiency variance is:

The labour rate variance for January is:

The standards that allow for no machine breakdowns or other work interruptions and that require peak efficiency at all times are referred to as:

The total standard cost for direct labour for May was:

The total standard cost for variable overhead for May was:

The production manager is usually held responsible for the labour efficiency variance.

In a performance report,actual costs should be compared to budgeted costs at the original budgeted activity level.

The standard variable overhead rate per direct labour hour is:

Determine labour efficiency variance:

A flexible budget is a budget that is developed using budgeted revenue or cost amounts and is not adjusted at the end of the budgeted period.

Yola Company manufactures a product with standards for direct labour of 4 direct labour-hours per unit at a cost of $12.00 per direct labour-hour.During June,1,000 units were produced using 4,100 hours at $12.20 per hour.The direct labour efficiency variance was:

Under a standard cost system,the material price variances are usually the responsibility of the:

In a standard cost system,the resources applied to production are recorded as additions to work in process inventory using the standard quantities and the standard prices for each actual unit added.

Determine the total material cost variance:

Management by exception means that a manager's attention is directed toward those parts of the organization where variances between actual and budget are significant.

An Introduction to Managerial Accounting and Cost Concepts

Systems Design: Job-Order Costing

Systems Design: Activity-Based Costing

Systems Design: Process Costing

Cost Behavior: Analysis and Use

Cost-Volume-Profit Relationships

Profit Planning

Standard Costs

Flexible Budgets and Overhead Analysis

Decentralization

Capital Budgeting Decisions

How Well Am I Doing Statement of Cash Flows

How Well Am I Doing Financial Statement Analysis

Filters