Exam 7: Flexible Budgets, Variances, and Management Control: I

Use the information below to answer the following question(s).Tractor Corporation produces toy tractors.The company uses the following direct cost categories: Actual performance for the company is shown below: Actual output: 5,000 units Direct Materials: Direct Manufacturing Labour: Direct Marketing Labour: -What is the efficiency variance for direct materials?

Match the department that is most likely responsible for the listed variance. A)Purchasing department B)Production department C)Marketing department D)Personnel department -Direct labour rate variance

Use the information below to answer the following question(s).A company makes table lamps, for which the following standards have been developed: During January, production of 100 lamps was expected, but 110 lamps were actually completed.Direct materials purchased and used were 2,100 kilograms at an actual price of $2.20 per kilogram.Direct labour cost for the month was $5,310, and the actual pay per hour was $9.00. -For any actual level of output, the difference between the input that was actually used and the input should have been used is

Match the department that is most likely responsible for the listed variance. A)Purchasing department B)Production department C)Marketing department D)Personnel department -Direct labour efficiency variance

Match the department that is most likely responsible for the listed variance. A)Purchasing department B)Production department C)Marketing department D)Personnel department -Sales volume variance

Use the information below to answer the following question(s).Everclean Filter Corporation used the following data to evaluate their current operating system.The company sells items for $10 each and had used a budgeted selling price of $11 per unit. -What is the static-budget variance of variable costs?

Use the information below to answer the following question(s).Jenny's Condiments makes a specialty mustard for street vendors that is composed of wet ingredients and dry ingredients.Two parts of wet ingredients at a standard cost of $12, and three parts of dry ingredients at a standard cost of $9, are required for every batch.In the first week of July, Jenny produced two hundred thirty batches of mustard using 450 units of wet ingredients and 750 units of dry ingredients. -For the wet ingredients what are the material mix and yield variances respectively?

Use the information below to answer the following question(s).Robb Industries Inc.(RII), developed standard costs for direct material and direct labour.In 2019, RII estimated the following standard costs for one of their major products, the 10-litre plastic container. During June 2020, RII produced and sold 5,000 containers using 490 kilograms of direct materials at an average actual cost per kilogram of $32 and 250 direct manufacturing labour-hours at an average actual wage of $15.25 per hour. -June's direct material flexible-budget variance is

Use the information below to answer the following question(s).The following data for a pottery company pertain to the production of 2,000 clay pots during July.Direct Materials (all materials purchased were used): Direct Manufacturing Labour: -What is the direct manufacturing labour rate variance?

Rate variances are considered to be the difference between the actual price and the budgeted price multiplied by the actual quantity of input goods or services.

Saan Corporation used the following data to evaluate their current operating system.The company sells items for $20 each and used a budgeted selling price of $20 per unit. Required: Prepare a Level 1 static-budget variance analysis using a income statement in contribution margin format.Use the following three column headings: Actual Results, Static Budget, Static-budget Variance.

Delila Equipment Ltd.is a company that manufactures an abdominal exerciser called The Tummy Toner.The following information is for three of the company's activities in 2018: The output measure is the number of units produced. Batch size in terms of units produced: Required: a.Calculate the flexible-budget variance for each activity in 2018. b.Calculate the price and efficiency variances for each activity in 2018.

Give at least three good reasons why an unfavourable efficiency variance for direct manufacturing labour might be reported.

When benchmarking

When a journal entry is made to record the direct materials used, a debit to the Direct Materials Efficiency Variance

Signet Engineering uses a standard cost system for all manufacturing transactions.For the month of April the following activities have taken place: Required: Record the necessary journal entries to: 1.Record the materials purchases assuming that materials rate variances are recorded at the time of purchase.2.Record the materials placed into production.3.Record the direct labour used in production.

Match the department that is most likely responsible for the listed variance. A)Purchasing department B)Production department C)Marketing department D)Personnel department -Direct material efficiency variance

Decreasing demand for a product may create a favourable sales-volume variance.

Answer the following question(s)using the information below.Eco Furniture Ltd.makes wooden furniture.One of their products is a wooden desk.The exterior is made of walnut, a high quality wood, but the interior drawers are made of pine, a less expensive wood.The budgeted direct materials quantities and prices for one desk are: During the month of November 600 desks were produced.The actual material volume and costs were: -What is the direct materials efficiency variance for walnut?

An unfavourable direct materials mix variance results when cheaper direct materials are substituted for more expensive direct materials.