Parallel Enterprises has collected the following data on one of its products. During the period the company produced 25,000 units. The direct materials price variance is: \[\begin{array} { l l } \text { Direct materials standard } ( 7 \mathrm {~kg} @ \$ 2 / \mathrm { kg } ) & \$ 014 \text { per finished unit } \\ \text { Actual cost of materials purchased } & \$ 322,500 \\ \text { Actual direct materials purchared and used } & 150,000 \text { lbs. } \end{array}\]

A) $27,500 unfavorable. B) $50,000 unfavorable. C) $50,000 favorable. D) $22,500 unfavorable. E) $22,500 favorable. A) $27,500 unfavorable. B) $50,000 unfavorable. C) $50,000 favorable. D) $22,500 unfavorable. E) $22,500 favorable.

A) Actual costs incurred to produce a specific product or perform a service. B) Preset costs for delivering a product or service under normal conditions. C) Established by the IMA. D) Rarely achieved. E) Uniform among companies within an industry. A) Actual costs incurred to produce a specific product or perform a service. B) Preset costs for delivering a product or service under normal conditions. C) Established by the IMA. D) Rarely achieved. E) Uniform among companies within an industry.

Fletcher Company collected the following data regarding production of one of its products. Compute the total direct labor cost variance. $\begin{array}{lrl} \text { Direct labor standard (2hrs. @, } \$ 12.75 / \mathrm{hr} .) & \$ 5.50&\text {per finished} \\ &&\text {unit}\\ \text { Actual direct labor hours } & 81,500 &\text {hrs.} \\ \text { Actual finished units produced } & 40,000&\text {units}\\ \text { Actual cost of direct labor } & \$ 1,100,250 \end{array}$

A) $80,250 unfavorable. B) $80,250 favorable. C) $61,125 favorable. D) $61,125 unfavorable. E) $19,125 favorable. A) $80,250 unfavorable. B) $80,250 favorable. C) $61,125 favorable. D) $61,125 unfavorable. E) $19,125 favorable.

Exam 8: Flexible Budgets and Standard Costs

A job was budgeted to require 3 hours of labor per unit at $8.00 per hour. The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000. What is the direct labor efficiency variance?

(Multiple Choice)

4.8/5

(80)

Question 161

Which of the following is not part of the flow of events in variance analysis:

(Multiple Choice)

4.8/5

(86)

Question 162

Should both favorable and unfavorable variances be investigated, or only the unfavorable ones? Explain.

(Essay)

4.9/5

(76)

Question 163

Parallel Enterprises has collected the following data on one of its products. During the period the company produced 25,000 units. The direct materials price variance is: Direct materials standard (7@\ 2/) \ 014 per finished unit Actual cost of materials purchased \ 322,500 Actual direct materials purchared and used 150,000 lbs.

(Multiple Choice)

4.8/5

(81)

Question 164

Wren Company determined that in the production of their products last period; they had a favorable price variance and an unfavorable quantity variance for direct materials. What might be the cause(s) of this pattern of variances?

(Essay)

4.9/5

(79)

Question 165

Maxwell Co. collected the following information about its production activities for the current year. a. Compute the direct materials price and quantity variances and indicate whether each is favorable or unfavorable. b. Prepare the journal entry to record the issuance of direct materials into production. Actual costs and quantities: Direct materials used 95,000 lbs. @ $6.30 per lb. Units completed during the year, 50,000 units Standard costs and quantities: Price per lb. of direct material, $6.05 Two lbs. of direct material per unit

(Essay)

5.0/5

(70)

Question 166

A favorable direct materials price variance might lead to an unfavorable direct materials quantity variance because the company purchased inferior materials.

(True/False)

4.8/5

(78)

Question 167

Milltown Company specializes in selling used cars. During the month, the dealership sold 22 cars at an average price of $15,000 each. The budget for the month was to sell 20 cars at an average price of $16,000. Compute the dealership's sales price variance for the month.

(Multiple Choice)

4.9/5

(63)

Question 168

Flexible budgets may be prepared before or after an actual period of activity. Why would management prepare such budgets at differing time frames?

(Essay)

4.8/5

(79)

Question 169

If Mercury Company's actual overhead incurred during a period was $32,700 and the company reported a favorable overhead controllable variance of $1,200 and an unfavorable overhead volume variance of $900, how much standard overhead cost was assigned to the products produced during the period?

(Essay)

4.8/5

(68)

Question 170

Summerlin Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units. The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units. What is the direct materials price variance?

(Multiple Choice)

4.7/5

(81)

Question 171

When there is a difference between the actual volume of production and the standard volume of production, which of the following, based solely on fixed overhead, occurs:

(Multiple Choice)

4.8/5

(86)

Question 172

Standard costs are:

(Multiple Choice)

5.0/5

(79)

Question 173

Tiger, Inc. budgeted the following overhead costs for the current year assuming operations at 80% of capacity, or 40,000 units: $Tiger, Inc. budgeted the following overhead costs for the current year assuming operations at 80% of capacity, or 40,000 units: The standard cost per unit when operating at this same 80% capacity level is: The actual production achieved in the current year was 60% of capacity, or 30,000 units. The actual costs were: Calculate the following variances and indicate whether each is favorable or unfavorable. \begin{array}{l} \begin{array} { | c | l |} \hline \text { Direct materials: }&\quad\quad\quad\quad\quad\quad\quad\\ \hline \text { Price variance } & \\ \hline \text { Quantity variance } & \\ \hline \text { Direct labor: } & \\ \hline \text { Rate variance } & \\ \hline \text { Efficiency variance } & \\ \hline \text { Variable overhead: } & \\ \hline \text { Spending variance } & \\ \hline \text { Efficiency variance } & \\ \hline \text { Fixed overhead: } & \\ \hline \text { Spending variance } & \\ \hline \text { Volume variance } & \\ \hline \end{array} \end{array}$ The standard cost per unit when operating at this same 80% capacity level is: $Tiger, Inc. budgeted the following overhead costs for the current year assuming operations at 80% of capacity, or 40,000 units: The standard cost per unit when operating at this same 80% capacity level is: The actual production achieved in the current year was 60% of capacity, or 30,000 units. The actual costs were: Calculate the following variances and indicate whether each is favorable or unfavorable. \begin{array}{l} \begin{array} { | c | l |} \hline \text { Direct materials: }&\quad\quad\quad\quad\quad\quad\quad\\ \hline \text { Price variance } & \\ \hline \text { Quantity variance } & \\ \hline \text { Direct labor: } & \\ \hline \text { Rate variance } & \\ \hline \text { Efficiency variance } & \\ \hline \text { Variable overhead: } & \\ \hline \text { Spending variance } & \\ \hline \text { Efficiency variance } & \\ \hline \text { Fixed overhead: } & \\ \hline \text { Spending variance } & \\ \hline \text { Volume variance } & \\ \hline \end{array} \end{array}$ The actual production achieved in the current year was 60% of capacity, or 30,000 units. The actual costs were: $Tiger, Inc. budgeted the following overhead costs for the current year assuming operations at 80% of capacity, or 40,000 units: The standard cost per unit when operating at this same 80% capacity level is: The actual production achieved in the current year was 60% of capacity, or 30,000 units. The actual costs were: Calculate the following variances and indicate whether each is favorable or unfavorable. \begin{array}{l} \begin{array} { | c | l |} \hline \text { Direct materials: }&\quad\quad\quad\quad\quad\quad\quad\\ \hline \text { Price variance } & \\ \hline \text { Quantity variance } & \\ \hline \text { Direct labor: } & \\ \hline \text { Rate variance } & \\ \hline \text { Efficiency variance } & \\ \hline \text { Variable overhead: } & \\ \hline \text { Spending variance } & \\ \hline \text { Efficiency variance } & \\ \hline \text { Fixed overhead: } & \\ \hline \text { Spending variance } & \\ \hline \text { Volume variance } & \\ \hline \end{array} \end{array}$ Calculate the following variances and indicate whether each is favorable or unfavorable. Direct materials: Price variance Quantity variance Direct labor: Rate variance Efficiency variance Variable overhead: Spending variance Efficiency variance Fixed overhead: Spending variance Volume variance

(Essay)

4.9/5

(79)

Question 174

A volume variance is the difference between overhead at maximum volume of production and the standard volume of production.

(True/False)

4.9/5

(73)

Question 175

A job was budgeted to require 3 hours of labor per unit at $8.00 per hour. The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000. What is the direct labor rate variance?

(Multiple Choice)

4.8/5

(94)

Question 176

Fletcher Company collected the following data regarding production of one of its products. Compute the total direct labor cost variance. Direct labor standard (2hrs. @, \ 12.75/.) \ 5.50 per finished unit Actual direct labor hours 81,500 hrs. Actual finished units produced 40,000 units Actual cost of direct labor \ 1,100,250

(Multiple Choice)

4.8/5

(75)

Question 177

When recording the journal entry for labor, the Work in Process Inventory account is

(Multiple Choice)

4.9/5

(85)

Question 178

Lavoie Company planned to use 18,500 pounds of material costing $2.50 per pound to make 4,000 units of its product. In actually making 4,000 units, the company used 18,800 pounds that cost $2.54 per pound. Calculate the direct materials quantity variance.

(Essay)

4.9/5

(76)

Question 179

An unfavorable variance is recorded with a debit because it reflects additional costs higher than the standard cost.

(True/False)

4.8/5

(78)

Question 180

Showing 161 - 180 of 222

A job was budgeted to require 3 hours of labor per unit at $8.00 per hour. The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000. What is the direct labor efficiency variance?

Which of the following is not part of the flow of events in variance analysis:

Should both favorable and unfavorable variances be investigated, or only the unfavorable ones? Explain.

Wren Company determined that in the production of their products last period; they had a favorable price variance and an unfavorable quantity variance for direct materials. What might be the cause(s) of this pattern of variances?

A favorable direct materials price variance might lead to an unfavorable direct materials quantity variance because the company purchased inferior materials.

Milltown Company specializes in selling used cars. During the month, the dealership sold 22 cars at an average price of $15,000 each. The budget for the month was to sell 20 cars at an average price of $16,000. Compute the dealership's sales price variance for the month.

Flexible budgets may be prepared before or after an actual period of activity. Why would management prepare such budgets at differing time frames?

If Mercury Company's actual overhead incurred during a period was $32,700 and the company reported a favorable overhead controllable variance of $1,200 and an unfavorable overhead volume variance of $900, how much standard overhead cost was assigned to the products produced during the period?

Summerlin Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units. The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units. What is the direct materials price variance?

When there is a difference between the actual volume of production and the standard volume of production, which of the following, based solely on fixed overhead, occurs:

Standard costs are:

A volume variance is the difference between overhead at maximum volume of production and the standard volume of production.

A job was budgeted to require 3 hours of labor per unit at $8.00 per hour. The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000. What is the direct labor rate variance?

When recording the journal entry for labor, the Work in Process Inventory account is

Lavoie Company planned to use 18,500 pounds of material costing $2.50 per pound to make 4,000 units of its product. In actually making 4,000 units, the company used 18,800 pounds that cost $2.54 per pound. Calculate the direct materials quantity variance.

An unfavorable variance is recorded with a debit because it reflects additional costs higher than the standard cost.

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity Based Costing and Analysis

Cost Behavior Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Analyzing for Business Transactions

Partnership Accounting

Filters