Exam 23: Flexible Budgets and Standard Costs

Fletcher Company collected the following data regarding production of one of its products. Compute the direct materials quantity variance. Direct materrals standard (6 lbs. @ \2 /1b.) \1 2 per finished unit Actual direct materials used 243,000 Ibs. Actual finished units produced 40,000 units Actual cost of direct materials used \4 83,570

Summerlin Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units. The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units. What is the direct materials price variance?

A company uses the following standard costs to produce a single unit of output. Direct materials 6 pounds at \ 0.90 per pound =\ 5.40 Direct labor 0.5 hour at \ 12.00 per hour =\ 6.00 Manufactuning overhead 0.5 hour at \ 4.80 per hour =\ 2.40 During the latest month, the company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $56,350 based on 4,900 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was $10,400. -Based on this information, the total direct labor cost variance for the month was:

Anniston Co. planned to produce and sell 40,000 units. At that volume level, variable costs are determined to be $320,000 and fixed costs are $30,000. The planned selling price is $10 per unit. Anniston actually produced and sold 42,000 units. Using a contribution margin format: (a) Prepare a fixed budget income statement for the planned level of sales and production. (b) Prepare a flexible budget income statement for the actual level of sales and production.

A management approach that focuses attention on significant differences from plans and gives less attention to areas where performance is reasonably close to standards is known as ________.

Sanchez Company's output for the current period was assigned a $200,000 standard direct materials cost. The direct materials variances included a $5,000 favorable price variance and a $3,000 unfavorable quantity variance. What is the actual total direct materials cost for the current period?

Fletcher Company collected the following data regarding production of one of its products. Compute the total direct labor cost variance. Direct labor standard (2 hrs. @ \1 2.75/hr.) \2 5.50 per finished unit Actual direct labor hours 81,500 hrs. Actual finished units produced 40,000 units Actual cost of direct labor \1 ,100,250

Parallel Enterprises has collected the following data on one of its products. During the period the company produced 25,000 units. The direct materials price variance is: Direct materials standard (7 kg. @ $2/kg) $ 14 per finished unit Actual cost of materials purchased $ 322,500 ^{Actual direct materials purchased and used 150,000} lbs.

Use the following data to find the direct labor efficiency variance if the company produced 3,500 units during the period. Direct labor standard (4 hrs. @ $7/hr.) $ 28 per unit Actual hours worked 12,250 Actual rate per hour $ 7.50

In sales variance analysis, the budgeted amount of unit sales is the predicted activity level and the budgeted cost of the goods sold can be treated as a "standard" price.

Fixed budgets are also known as flexible budgets.

Sales variance analysis is used by managers for:

Presented below are terms preceded by letters a through h and followed by a list of definitions 1 through 8. Enter the letter of the term with the definition, using the space preceding the definition. (a) Unfavorable variance (b) Fixed budget performance report (c) Overhead cost variance (d) Budgetary control (e) Spending variance (f) Flexible budget performance report (g) Quantity variance (h) Favorable variance ________ (1) Results from a comparison of actual cost or revenue to budget that contributes to a lower income. (2) A report that compares actual results with the results expected under a fixed budget. ________ (3) When management pays an amount different from the standard price to acquire an item. ________ (4) Results from a comparison of actual cost or revenue to budget that contributes to higher income. (5) Management's use of budgets to see that planned objectives are met. ________ (6) Difference between actual quantity of an input and the standard quantity of the input. ________ (7) Difference between the total overhead cost applied to products and the total overhead cost actually incurred. ________ (8) A report that compares actual performance and budgeted performance based on actual sales volume or other activity level.

At the end of the accounting period, immaterial variances are closed to ________.

Ship Co. produces storage crates that require 1.2 meters of material at $.85 per meter and 0.1 direct labor hours at $15.00 per hour. Overhead is applied at the rate of $9 per direct labor hour. What is the total standard cost for one unit of product that would appear on a standard cost card?

A company has established 5 pounds of Material J at $2 per pound as the standard for the material in its Product Z. The company has just produced 1,000 units of this product, using 5,200 pounds of Material J that cost $9,880.The direct materials price variance is:

Fixed budget performance reports compare actual results with the results expected under a fixed budget.

The following information describes a company's usage of direct labor in a recent period. The direct labor efficiency variance is: Actual hours used 45,000 Actual rate per hour \1 5.00 Standard rate per hour \1 4.50 Standard hours for units produced 47,000

When recording the journal entry for labor, the Work in Process Inventory account is

The difference between the total actual overhead cost incurred and the total standard overhead cost applied is the ________.