Exam 11: Relevant Costs for Decision Making

Tracton Corporation uses a standard costing system in which manufacturing overhead costs are applied to products on the basis of machine time. Required: a)Several numbers and labels have been omitted from the analysis of fixed overhead below.Supply the missing numbers and labels.

The labour efficiency variance for January is:

The variable overhead spending variance is:

The following standards for variable manufacturing overhead have been established for a company that makes only one product: The following data pertains to operations for the last month: What is the variable overhead spending variance for the month?

To record the incurrence of direct labour cost and its use in production,the general ledger would include what entry to the labour rate variance account?

Analysis of all sales volume variances provides no useful information to management.

Web Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of machine-hours.During February,the company used a denominator activity of 80,000 machine-hours in computing its predetermined fixed overhead rate.However,only 75,000 standard machine-hours were allowed for the month's actual production.If the fixed overhead volume variance for February was $6,400 unfavourable,then the total budgeted fixed overhead cost for the month was:

The direct labour efficiency variance for March is:

To record the incurrence of direct labour costs and its use in production,the general ledger would include what entry to the labour efficiency variance account?

The following labour standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: What is the labour rate variance for the month?

Borden Enterprises uses standard costing.For the month of April,the company reported the following data: • Standard direct labour rate: $10 per hour • Standard hours allowed for actual production: 8,000 • Actual direct labour rate: $9.50 per hour • Labour efficiency variance: $4,800 F The labour rate variance for April is:

If a company has a favourable labour efficiency variance,it used less units of labour than were budgeted for the output units achieved.

The standards for direct labour for a product are 2.5 hours at $8 per hour.Last month,9,000 units of the product were made and the labour efficiency variance was $8,000 F.The actual number of hours worked during the past period was:

The total variance for variable overhead for January is:

The materials price variance is:

The materials price variance is:

A favourable labour efficiency variance would result in a credit balance in the labour efficiency variance account.

The following standards for variable manufacturing overhead have been established for a company that makes only one product:

A flexible budget cost variance can be decomposed into a quantity variance and a price variance.

The total variable overhead variance for November was: