Exam 29: Controlling Manufacturing Costs: Standard Costs

The Costmore Company uses standard costing and has established the following standards for direc materials and direct labor for each unit it makes: Direct Materials 3 gallons at \ 5 per gallon Direct Labor 1 hour at \ 12 per hour During July, the company made 4,000 units of product and used 13,000 gallons. The actual price paid for materials was $5.20 per gallon. Direct Labor used was 3,600 hours and workers were paid $11.75 per hour. An analysis would indicate

Develop the standard costs from the information given. Morlee Corporation makes three models of storage sheds. Model JB102 a 10' by 12' model that looks Victorian with windows, shutters and gingerbread along the roof line, is Morlee's most popular model. Direct materials for the JB102 consists of $ 66.00 for 7 sheets of pressed board, $59.00 for 2 x 4's for framing, $22.00 for roofing shingles, and $17.00 for aluminum siding. The nails, glue and other indirect materials for the company total $38,880 per year and are applied based on direct labor hours. The total direct labor hours for Morlee for one year are estimated to be 8,000 per year. Direct labor for each JB 102 is estimated to be 7 hours. The average hourly rate at Morelee is $14.50. Prepare a standard cost card for Model JB102. Units and per unit amount for material can be omitted.

Standard costs reflect what costs should be for the units of product manufactured during the period under the normal efficient operating conditions.

The following production information is available for January: Actual Hours used 45,000 Actual Rate per hour \ 15 Standard Rate per hour \ 14 Standard hours for units produced 47,000 The direct materials price variance is:

An unfavorable price variance for materials means that

Costs that reflect what costs should be for the units of product manufactured during the period under normal efficient operating conditions are known as

To separate the semi-variable costs into their fixed and variable components, one can use which of the following methods?

The three classifications for manufacturing costs are fixed, variable, and semi-variable. Explain what each is and how they relate to production.

The quantity variance for an item is the difference between its actual quantity and its standard quantity, multiplied by the-------- cost of the item.

From the information given for Canine Cottage Industries, compute the materials, quantity and pric variances. Canine Cottage Industries makes several specially designed doghouses. The Standard Cost Card for The Gables model is shown. A customer ordered three of this model for their Labrador retrievers. The Job Cost Sheet is shown. STANDARD COST CARD Item: Model:The Gables Materials

The---------- cost per unit does not change as output changes.

Kenwood Company's manufacturing overhead costs for the assembly department are given below. Fixed Costs Variable Costs Per Month Per Hour Indirect Labor \ 1,400 \ .95 Payroll Taxes 90 1.05 Indirect Materials 220 .20 Power and Water 340 .35 Depreciation 1,020 -- Taxes and Insurance 450 --- Repairs 175 .15 Using the information provided, prepare a flexible budget for the department for the month of May 2019, assuming that the expected production is for 2,000 direct labor hours. The flexible budget should show costs for production levels of 90 percent and 110 percent of the expected production level of 2,000 hours.

Costs that reflect what costs should be for the units of product manufactured during the period under normal efficient operating conditions are called------------- costs.

As the level of activity increases, the total fixed costs for the period

In a factory, the total variable costs are $1,100 if 500 units are produced. If 800 units are produced, the variable cost per unit would be

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 labor rate variance in January is:

Which of the following is NOT an element of the standard cost?

A fixed budget includes only fixed manufacturing costs.

As the volume of output decreases, the fixed cost per unit of output increases.