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

The following data for the telephone company pertain to the production of 450 rolls of telephone wire during June.Selected items are omitted because the costing records were lost in a windstorm. Required: Compute the missing elements in the report represented by the lettered items.

For any actual level of output,the efficiency variance is the difference between actual quantity of input used and the budgeted quantity of input allowed to produce actual output,multiplied by the budgeted price.

The terms,usage variances and efficiency variances mean the same thing.

Brussels Chocolate Company produces chocolates in large batches.One batch of chocolate has the following standard costs and amounts: Brussels Chocolate Company produced 600 batches of chocolates in the most recent month.Actual input costs and per batch usage levels were as follows: Required: a.Calculate the total material input rate variance. b.Calculate the total material efficiency variance. c.Calculate the total labour rate variance.

A standard is usually expressed on a per-unit basis and communicates an average amount indicating what should be achieved by any similar process each time period that performance measures are taken.

Use the information below to answer the following question(s). All Good Things Ltd.planned on producing 600 units for the year.However,actual production was 400 units. Information concerning the direct labour cost for All Good Things Ltd.is as follows: actual results 1,000 hours at $25 per hour;static budget amounts were 1,200 hours at $21 per hour. -What is the All Good Things Ltd.flexible-budget variance?

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?

Rate variances are the difference between actual inputs used and budgeted inputs that should have been used,multiplied by the budgeted price.

A standard is

Which of the following statements about benchmarks is TRUE?

Use the information below to answer the following question(s). All Good Things Ltd.planned on producing 600 units for the year.However,actual production was 400 units. Information concerning the direct labour cost for All Good Things Ltd.is as follows: actual results 1,000 hours at $25 per hour;static budget amounts were 1,200 hours at $21 per hour. -What is the All Good Things Ltd.static-budget 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 operating income?

The materials yield variance will be unfavourable when

Cayman Designs makes chair cushions.The standard direct materials quantity is 1 kilogram per cushion at a cost of $2.50 per kilogram.The actual results for the production of 20,000 cushions was 1.25 kilograms per cushion,at a cost of $2.40 per kilogram.Calculate the direct materials input rate variance and the direct materials efficiency variance.

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

Explain the difference between a static budget and a flexible budget.Explain what is meant by a static budget variance and a flexible budget variance.

A flexible-budget variance can be decomposed into an efficiency variance and a rate variance.

Answer the following question(s)using the information below. Abernathy Corporation used the following data to evaluate their current operating system.The company sells items for $10 each and used a budgeted selling price of $10 per unit. -What is the static-budget variance of operating income?

Determining the actual quantity of the revenue driver is one step in the development of a flexible budget.

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.