Exam 29: Controlling Manufacturing Costs: Standard Costs

Petersen Company produces a single product with the following production and average cost data: - The best estimate of the monthly fixed cost is:

A fixed budget is one that shows only one level of activity.

Better Blankets, Inc. makes a SnuggieBlank using flannel material and trim binding. They have instituted a successful JIT system and thus no longer have to stock inventory prior to their production need. The Standard Cost Card for The SnuggieBlank model is shown. STANDARD COST CARD The company reported the following results concerning January: -The material quantity variance for Trim used in January is:

A key purpose of a manufacturing cost budget is to provide a basis for measuring performance.

Management expresses its operating plan in monetary units by completing a(n)---------- .

The cost per unit of direct materials changes as output changes.

As the level of activity increases, the fixed cost per unit of activity

Which variance is controllable by the production manager?

Costs in excess of established standards are----------- .

Reelmates manufactures fishing poles. In a recent month, the company budgeted production of 2,000 poles. Actual production was 2,200. According to the standard cost card, each pole requires 3 feet of fiberglass rod at a cost of $9 per foot. Reelmates used 6,500 feet of rod at a net cost of $65,000 for the period. - The material usage variance was:

Regression analysis is a more sophisticated technique than the high-low method and as such, often leads to higher confidence in the projected costs.

Better Blankets, Inc. makes a SnuggieBlank using flannel material and trim binding. They have instituted a successful JIT system and thus no longer have to stock inventory prior to their production need. The Standard Cost Card for The SnuggieBlank model is shown. STANDARD COST CARD The company reported the following results concerning January: - The material quantity variance for Flannel used in January is:

The standard quantity of materials for a product was 62 pounds per unit at the standard price of $3)10 per pound. The actual price per pound of materials was $3.25, and the actual quantity used was 67 pounds. An analysis would indicate

Budgeting for manufacturing overhead is the easiest of total product costs to calculate as its cost behavior is fixed.

The salary of the factory supervisor is a good example of

The difference between the actual cost of an item and the standard cost of an items is called the-----------.

A fixed budget is a meaningful way to evaluate manufacturing performance if the activity level used for the budget is

Better Blankets, Inc. makes a SnuggieBlank using flannel material and trim binding. They have instituted a successful JIT system and thus no longer have to stock inventory prior to their production need. The Standard Cost Card for The SnuggieBlank model is shown. STANDARD COST CARD The company reported the following results concerning January: - The variable overhead spending variance in January is:

A flexible budget that is prepared based on the actual activity level achieved in a period provides a more precise measure of efficiency and control when evaluating actual costs.