Exam 23: Flexible Budgets and Standard Cost Systems

From the following particulars of Rose Mary Company, calculate the total fixed overhead variance for the total production cost flexible budget variance.

When a manufacturing company uses standard costing system, an unfavorable variance has the effect of being a contra expense.

Mountain Sports Equipment Company projected sales of 78,000 units at a unit sale price of $12 for the year 2015. Actual sales of 2015 were 75,000 units at $14.00 per unit. Variable costs were budgeted at $3 per unit; actual amount was $4 per unit. Budgeted fixed costs totaled $375,000, while actual fixed costs amounted to $400,000. What is the sales volume variance for total revenue?

Which of the following amounts of a flexible budget change with changes in sales volume?

Which of the following is an example of a labor cost standard?

The fixed overhead volume variance always shows underallocated fixed overhead costs.

Which of the following is one of the reasons why companies use standard costs?

Flexible budget variance is the difference between expected results in the flexible budget for the actual units sold and the static budget.

A standard cost system is an accounting system that uses standards for product costs.

Atlace Manufacturers uses a standard costing system. Data on standard costs and actual costs are as follows: Give journal entry to transfer the cost of units from Work-in-Process Inventory to Finished Goods Inventory.

A company was experiencing slow production rates, and lower production volumes than demanded by management, so a new factory manager was hired. Upon investigation, she found that the workers were poorly motivated and not closely supervised. Midway through the quarter, she started an incentive program and paid out cash bonuses when workers hit their production targets. Within a short time, production output increased, but the bonuses had to be charged to the direct labor budget, and she was worried about the impact of these costs on operating income. This situation could have produced a(n):

Which of the following is an example of a materials cost standard?

A favorable sales volume variance in sales revenue suggests a(n):

An unfavorable variance for an expense means more expense has been incurred than planned.

Emerald Marine Stores Company manufactures decorative fittings for luxury yachts that require highly skilled labor, and special metallic materials. Emerald uses standard costs to prepare its flexible budget. For the first quarter of 2015, direct material and direct labor standards for one of their popular products were as follows: Direct materials: 1 pound per unit; $12 per pound Direct labor: 4 hours per unit; $15 per hour Emerald produced 5,000 units during the quarter. At the end of the quarter, an examination of the materials records showed that the company used 7,000 pounds of materials and actual total material costs were $98,000. Calculate the direct materials cost variance.

The Carolina Products Company has completed the flexible budget analysis for the 2^nd quarter, which is as given below. Which of the following statements would be a correct interpretation of the flexible budget variance for variable expenses?

Which of the following amounts of a flexible budget remain constant when the sales volume changes?

Which of the following formulae is the correct formula to measure the efficiency variance?

Which of the following variances considers only the cost variance to be included in the calculation of the total production cost flexible budget variance?

The total production cost flexible budget variance is obtained by adding direct labor efficiency variance and fixed overhead volume variance.