Exam 10: Standard Costs and Overhead Analysis

Which of the following variances would be useful in calling attention to possible problems in the control of spending on overhead items? Variable overhead Fixed overhead spending variance volume variance A) No No B) No Yes C) Yes No D) Yes Yes

The following materials standards have been established for a particular product: Standard quantity per unit of output 8.3 metres Standard price \ 19.15 per metre The following data pertain to operations concerning the product for the last month: Actual materials purchased 7,500 grams Actual cost of materials purchased \ 141,375 Actual materials used in production 7,100 grams Actual output 700 units What was the materials price variance for the month?

The Murray Company makes and sells a single product. The company recorded the following activity and cost data for May: The fixed portion of the predetermined overhead rate is $0.95 per direct labour hour. -What was the amount of fixed overhead contained in the company's overhead flexible budget for May?

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 was the labour efficiency variance for the month?

The Ferris Company applies manufacturing overhead costs to products on the basis of direct labour hours. The standard cost card shows that 3 direct labour hours are required per unit of product. For August, the company budgeted to work 90,000 direct labour hours and to incur the following total manufacturing overhead costs: During August, the company completed 28,000 units of product, worked 86,000 direct labour hours, and incurred the following total manufacturing overhead costs: The denominator activity used for the predetermined overhead rate was 90,000 direct labour hours. -For August,what was the fixed overhead budget variance?

Lido Company's standard and actual costs per unit for the most recent period,during which 400 units were actually produced,are given below: There were no inventory of materials at the beginning or end of the period. Required: From the above information, compute the following variances. Show whether the variance is favourable (F) or unfavourable (U): a) Materials price variance b) Materials quantity variance c) Direct labour rate variance d) Direct labour efficiency variance e) Variable overhead spending variance f) Variable overhead efficiency variance

The following materials standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: -What was the materials price variance for the month?

(Appendix 10B)The following is the standard cost card for X Company's only product: Direct materials, 4 metres at \ 4.00 \ 16.00 Direct labour, 5 hours at \ 10.00 \ 15.00 Variable overhead, 1.5 hours at \ 3.00 \ 4.50 Fixed overhead, 1.5 hours at \ 7.00 \ 10.50 Standard cost per unit \ 46.00 The company manufactured and sold 18,000 units of product during the year. A total of 70,200 metres of material was purchased during the year at cost of $4.20 per metre. All of this material was used to manufacture the 18,000 units. The company records showed no beginning or ending inventories for the year. The company worked 29,250 direct labour hours during the year at a cost of $9.75 per hour. Overhead cost is applied to products on the basis of direct labour hours. The denominator activity level (direct labour hours) was 22,500 hours. Budgeted fixed overhead costs as shown on the flexible budget were $157,500, while actual fixed overhead costs were $156,000. Actual variable overhead costs were $90,000. Required: a) Compute the direct materials price and quantity variances for the year. b) Compute the direct labour rate and efficiency variances for the year. c) Compute the variable overhead spending and efficiency variances for the year. d) Compute the fixed overhead budget and volume variances for the year. e) (Appendix 10B) Prepare a journal entry to record the variable overhead costs incurred and applied, including the results of the variance analysis. f) (Appendix 10B) Prepare a journal entry to record the fixed overhead costs incurred and applied, including the results of the variance analysis.

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 was the labour rate variance for the month?

At the end of the variance analysis cycle,management should be able to identify possible causes for both favourable and unfavourable variances.

Which of the following refers to standards that allow for no machine breakdowns or other work interruptions and that require peak efficiency at all times?

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 favourable What was the labour rate variance for April?

Cox Company's direct material costs for the month of January were as follows: Actual quantity purchased 18,000 kilograms Actual unit purchase price \ 3.60 per kilogram Materials price variance- Unfavourable (based on purchases) \ \ 3,600 Standard quantity allowed for actual production 16,000 kilograms Actual quantity used 15,000 kilograms What was the favourable direct materials quantity variance for January?

The supervisor of the cost department has just conferred with you concerning the variance analysis of direct labour for the month just ended.As she talked,you wrote feverishly,but you weren't able to record all the information she gave you before she dashed off muttering something about "another brush fire to put out." Your efforts are shown below: Required: a)To redeem yourself,complete the form above,adding numbers and labels.(The usual notations,AH,SH,AR,SR,etc.,may be used where appropriate.) b)If you know that 18 minutes of labour is standard per unit of production,how many units were produced?

Under which product costing system for a manufacturing company would there be no fixed manufacturing overhead volume variance?

A manufacturing company has a standard costing system based on machine hours (MHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period: -What was the variable overhead spending variance for the period,rounded to the nearest dollar?

The following standards for variable manufacturing overhead have been established for a company that makes only one product: Standard hours per unit of output 6.9 hours Standard variable overhead rate \ 15.80 per hour The following data pertain to operations for the last month: Actual hours 6,100 hours Actual total variable overhead cost \ 97,600 Actual output 800 units Required: a)What was the variable overhead spending variance for the month? b)What was the variable overhead efficiency variance for the month?

The following materials standards have been established for a particular product: Standard quantity per unit of output 1.7 metres Standard price \ 19.80 per metre The following data pertain to operations concerning the product for the last month: Actual materials purchased 5,800 metres Actual cost of materials purchased \ 113,680 Actual materials used in production 5,100 metres Actual output 3,200 units What was the materials quantity variance for the month?

Which of the following statements is NOT correct?

One cause of an unfavourable overhead volume variance would be increases in cost for fixed overhead items.