Exam 10: Standard Costs and Overhead Analysis

Standard costs can be used in conjunction with job-order costing but NOT with process costing.

$\text { The Litton Company has established standards as follows: }$ Direct Material 3@@4/.=\ 12 per unit Direct Labour 2@\ 8/.=\ 16 per unit Variable Manufacturing Overhead 2 hrs. @ \ 5/.=\ 10 per unit Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased. Units Produced 600 Direct Material Used 2,000. Direct Material Purcahsed (3,000 kgs.) \ 11,400 Direct Labour Cost (1,100 hrs. ) \ 9,240 Variable Manufacturing Overhead Cost Incurred \ 5,720 The company applies variable manufacturing overhead to products on the basis of direct labour hours. -What was the materials quantity variance?

A furniture manufacturer 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: Denominator Level of Activity 3,300 Overhead Costs at the Denominator Activity Level: Variable Overhead Cost \ 31,845 Fixed Overhead Cost \ 40,425 The following data pertain to operations for the most recent period: Actual Hours 3,400 Standard Hours Allowed for the Actual Output 3,078 Actual Total Variable Overhead Cost \ 32,980 Actual Total Fixed Overhead Cost \ 38,975 -What was the fixed overhead volume variance for the period,rounded to the nearest dollar?

Last month,75,000 kilograms of direct materials were purchased,and 71,000 kilograms were used.If the actual purchase price per kilogram was $0.50 more than the standard purchase price per kilogram,what was the materials price variance?

Henley Company uses a standard cost system that applies manufacturing overhead to units of product on the basis of direct labour hours.For the month of January,the fixed manufacturing overhead volume variance was $2,220 favourable.The company uses a fixed manufacturing overhead rate of $1.85 per direct labour hour.What were the standard direct labour hours allowed for the month's output in January?

A manufacturer of industrial equipment has a standard costing system based on direct labour hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: Denominator Level of Activity 9,000 Overhead Costs at the Denominator Activity Level: Variable Overhead Cost \ 90,700 Fixed Overhead Cost \ 102,800 $\text { The following data pertain to operations for the most recent period: }$ Actual Hours 7,800 Standard Hours Allowed for the Actual Output 7,765 Actual Total Variable Overhead Cost \ 54,210 Actual Total Fixed Overhead Cost \ 100,200 -Which of the following is NOT true for variable manufacturing overhead costs in a standard costing system?

The following materials standards have been established for a particular product: Standard quantity per unit of output 4.4 kilograms Standard price \ 13.20 per kilogram The following data pertain to operations concerning the product for the last month: Actual materials purchased 4,800 kilograms Actual cost of materials purchased \ 62,880 Actual materials used in production 4,300 kilograms Actual output 70 units -What was the materials price variance for the month?

A furniture manufacturer 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: Denominator Level of Activity 3,300 Overhead Costs at the Denominator Activity Level: Variable Overhead Cost \ 31,845 Fixed Overhead Cost \ 40,425 The following data pertain to operations for the most recent period: Actual Hours 3,400 Standard Hours Allowed for the Actual Output 3,078 Actual Total Variable Overhead Cost \ 32,980 Actual Total Fixed Overhead Cost \ 38,975 -What was the fixed overhead budget variance for the period,rounded to the nearest dollar?

Raff Co. has a standard cost system in which manufacturing overhead is applied to units of product on the basis of direct labour hours (DLHs). The following standards are based on 100,000 direct labour hours: Variable Overhead 2 DLHs @ \3 per DLH =\ 6 per unit Fixed Overhead 2 DLHs @ \4 per DLH =\ 8 per unit The following information pertains operations during March: Units Actually Produced 38,000 Actual Direct Labour Hours Worked 80,000 Actual Manufacturing Overhead Incurred: Variable Overhead \ 250,000 Fixed Overhead \ 384,000 -For March,what was the fixed overhead volume variance?

If two products are good substitutes,the sales quantity variance for each product can be analyzed further into a market volume variance and a market share variance.

A furniture manufacturer 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: Denominator Level of Activity 3,300 Overhead Costs at the Denominator Activity Level: Variable Overhead Cost \ 31,845 Fixed Overhead Cost \ 40,425 The following data pertain to operations for the most recent period: Actual Hours 3,400 Standard Hours Allowed for the Actual Output 3,078 Actual Total Variable Overhead Cost \ 32,980 Actual Total Fixed Overhead Cost \ 38,975 -How much overhead was applied to products during the period,rounded to the nearest dollar?

What is the sum of the sales mix variance and the sales quantity 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: Denominator Level of Activity 6,100 Overhead Costs at the Denominator Activity Level: Variable Overhead Cost \ 35,075 Fixed Overhead Cost \ 77,775 The following data pertain to operations for the most recent period: Actual Hours 6,300 Standard Hours Allowed for the Actual Output 5,994 Actual Total Variable Overhead Cost \ 36,540 Actual Total Fixed Overhead Cost \ 76,875 -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?

Dori Castings is a job order shop that uses a standard cost system to account for its production costs. Manufacturing overhead costs are applied to production on the basis of direct labour hours. -What amount of fixed overhead would Dori apply to finished production?

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: Total Variable Overhead Costs \ 99,000 Total Fixed Overhead Costs \ 118,000 During August, the company completed 28,000 units of product, worked 86,000 direct labour hours, and incurred the following total manufacturing overhead costs: Total Variable Overhead Costs \ 98,900 Total Fixed Overhead Costs \ 115,300 The denominator activity used for the predetermined overhead rate was 90,000 direct labour hours. -For August,what was the fixed overhead budget variance?

The following standards for variable manufacturing overhead have been established for a company that makes only one product: Standard hours per unit of output 1.6 hours Standard variable overhead rate \ 11.55 per hour The following data pertain to operations for the last month: Actual hours 4,900 hours Actual total variable overhead cost \ 58,310 Actual output 3,000 units -What was the variable overhead spending variance for the month?

) Saskatoon Company uses two raw materials, A and B, in the manufacture of its only product: Zizbo. The materials are very close substitutes. The standard proportions for the manufacture of a unit of Zizbo are 2 units of A and 3 units of B. The unit standard prices of A and B are $10 and $8, respectively. During the month of August, the company used 450 units of A and 750 units of B to produce 230 units of Zizbo. -What were the direct materials quantity variances for raw materials A and B,respectively?

The Baby Clothing Company makes a single product and uses standard costing. Some data concerning this product for the month of May follow: Labour rate variance \ 7,500 favourable Labour efficiency variance \ 12,000 favourable Variable overhead efficiency variance \ 5,000 favourable Number of units produced 10,000 Standard labour rate per direct labour hour \ 12 Standard variable overhead rate per direct labour hour \ 5 Actual labour hours used 15,000 Actual variable manufacturing overhead costs \ 78,290 -What are the standard hours allowed to make one unit of finished product?

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