Exam 9: Standard Costing and Flexible Budgeting

Barber Corporation recently used 30,000 labour hours to produce 7,800 completed units. According to manufacturing specifications, each unit is anticipated to take 3.75 hours to complete. The company's actual payroll cost amounted to $565,000. If the standard labour cost per hour is $19.20, Barber's labour rate variance is:

The difference between budgeted fixed manufacturing overhead and the fixed overhead applied to production is the:

Briefly explain the nature of the fixed-overhead volume variance. Be sure to address the issue of capacity utilization in your response.

Consider the following information: Direct material purchased and used: 80,000 gallons Standard quantity of direct material allowed for May production: 76,000 gallons Actual cost of direct materials purchased and used: $176,000 Unfavourable direct-material quantity variance: $9,400 The direct-material price variance is:

At the end of the accounting period, most companies close variance accounts to:

Bowing International purchased 66,000 metres (cost = $514,800) of direct material to be used in the manufacture of the company's sole product. According to the production specifications, each completed unit requires five metres of direct material at a standard cost of $8.00 per metre. Direct materials consumed by the end of the period totalled 63,500 metres in the manufacture of 12,933 finished units. An examination of Bowing's payroll records revealed that the company worked 23,000 labour hours (cost = $333,500) during the period, and specifications called for each completed unit requiring two hours of labour at a standard cost of $14.60 per hour. Bowing's direct-material price variance is:

The following selected information was extracted from the accounting records of Lethbridge Corporation: Planned manufacturing activity: 40,000 machine hours Standard variable-overhead rate per machine hour: $\$ 16$ Budgeted fixed overhead: $\$ 100.000$ Variable-overhead spending variance: $\$ 92,000 \mathrm{U}$ Variable-overhead eflicieney varianes: $\$ 102.000 \mathrm{~F}$ Fixed-overhead budget varianee: $\$ 25.000 \mathrm{U}$ Total actual overhead: S675,000 Required: Determine the following: actual fixed overhead, actual variable overhead, actual machine hours worked, standard machine hours allowed for actual production, and the fixed-overhead volume variance.

Which of the following are methods for setting standards?

The following data relate to Logan Corporation's only product: Direct material standard: 4 square feet at $1.50 per square foot Direct material purchased: 20,000 square feet at $1.60 per square foot Direct material consumed: 19,200 square feet Manufacturing activity: 4,600 units completed The direct-material quantity variance is:

Rowe Corporation reported the following variances for the period just ended: Variable-overhead spending variance: $50,000U Variable-overhead efficiency variance: $28,000U Fixed-overhead budget variance: $70,000U Fixed-overhead volume variance: $30,000U If Rowe desires to analyze variances that arose primarily from managers' expenditures in excess of anticipated amounts, the company should focus on variances that total:

Which of the following is used in the computation of the variable-overhead spending variance?

Alex Company recently completed 10,600 units of its single product, consuming 32,000 labour hours that cost the firm $480,000. According to manufacturing specifications, each unit should have required 3 hours of labour time at $15.40 per hour. On the basis of this information, determine Alex's labour rate variance and labour efficiency variance. Rate Efficiency 1 \ 12,720 \ 3,000 2 \ 12.720 \ 3,000 3 \ 12,800 \ 3,080 4 \ 12,800 \ 3,080 5 \ 12.800 \ 3,080

Black Dog Corporation produced 9,900 units of Product No. 5A. A total of 55,000 direct labour hours were used at a cost of $841,500. The direct labour standard to complete one unit is 5 hours at $15 per hour. The direct-labour rate variance is:

Jameison Incorporated purchased and consumed 50,000 litres of direct material that was used in the production of 11,000 finished units of product. According to engineering specifications, each finished unit had a manufacturing standard of five litres. If a review of Jameison's accounting records at the end of the period disclosed a material price variance of $5,000U and a material quantity variance of $3,000F, determine the actual price paid for a litre of direct material.

Dance Company has a standard variable overhead rate of $4.50 per machine hour, and each unit produced has a standard time allowed of three hours. The company's static budget was based on 46,000 units. Actual results for the year follow: Actual units produced: 42,000 Actual machine hours worked: 120,000 Actual variable overhead incurred: $520,000 Dance's variable-overhead spending variance is:

Hawkins Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended: Actual units produced: 9,000 Actual variable overhead incurred: $54,400 Actual machine hours worked: 16,000 Standard variable overhead cost per machine hour: $3.50 If Hawkins estimates two hours to manufacture a completed unit, the company's variable-overhead efficiency variance is:

Black Dog Corporation produced 9,900 units of Product No. 5A. A total of 55,000 direct labour hours were used at a cost of $841,500. The direct labour standard to complete one unit is 5 hours at $15 per hour. The direct-labour efficiency variance is:

The difference between the total actual factory overhead and the total factory overhead applied to production is the:

The term "management by exception" is best defined as:

Which of the following is not an overhead variance?