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

Use the information below to answer the following question(s). Sawyer Industries Inc.(SII),developed standard costs for direct material and direct labour.In 2016,SII estimated the following standard costs for one of their major products,the 30-litre heavy-duty plastic container. During July 2017,SII produced and sold 10,000 containers using 2,200 kilograms of direct materials at an average actual cost per kilogram of $24 and 1,050 direct manufacturing labour hours at an average actual wage of $14.75 per hour. -July's direct material efficiency variance is

If a company only reached 85% of their production goal,the 85% may be called the company's

Use the information below to answer the following question(s). Robb Industries Inc.(RII),developed standard costs for direct material and direct labour.In 2016,RII estimated the following standard costs for one of their major products,the 10-litre plastic container. During June 2017,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 rate variance is

The flexible-budget variance measures

Answer the following question(s)using the information below. Apple Valley Orchards,Inc.(AVO),developed standard costs for direct material and direct labour.In 2016,AVO estimated the following standard costs for one of their most well loved products,the AVO classic Grandma's large apple pie which had a brown sugar coating on the top of the crust as well as including cranberry and mince ingredients in addition to the apples. During September 2017,AVO produced and sold 1,200 pies using 1,875 kilograms of direct materials at an average cost per kilogram of $7.00 and 280 direct labour hours at an average wage of $14.25 per hour. -September's direct labour rate variance is

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 are the efficiency variances for direct manufacturing labour and direct marketing labour,respectively?

The direct manufacturing labour rate variance is likely to be favourable if higher-skilled workers are put on a job.

Cost variances should be investigated when

Explain how variance analysis is used in conjunction with activity-based costing.

The term efficiency variance is the direct cost portion of the flexible-budget variance.

Nicholas Company manufacturers TVs.Some of the company's data was misplaced.Use the following information to replace the lost data: Required: a.What are the respective flexible-budget revenues (A)? b.What are the static-budget revenues (B)? c.What are the actual variable costs (C)? d.What is the total flexible-budget variance (D)? e.What is the total sales-volume variance (E)? f.What is the total static-budget variance?

Management by exception is the practice of concentrating on

Performance variance analysis can be used in activity-based costing systems.

The textbook discusses five levels of variances: Level 0,Level 1,Level 2,Level 3,and Level 4.Briefly explain the meaning of each of those levels and provide an example of a variance at each of those levels.

Which of the following is part of the benchmarking process?

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 rate variance of the direct materials?

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): Standard cost: $6.00 per kilogram of clay Total actual cost: $11,200 Standard cost allowed for units produced was $12,000 Materials efficiency variance was $240 unfavourable Direct Manufacturing Labour: Standard cost is 2 pots per hour at $24.00 per hour Actual cost per hour was $24.50 Actual labour was 972 hours -What is the standard direct material amount per pot?

The flexible-budget variance is the difference between the actual results and the flexible-budget amount for the actual levels of the revenue and cost drivers.

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.

You have been promoted to management accountant at a hospital.One of the things you noted from reviewing past internal reports is that the quality of the data is poor at times,and there is no objective standard for evaluating performance.When you asked about this at a board of directors meeting,the consensus reply was that the hospital's operations were too subjective and service orientated,and that it was a non-profit organization,so setting profit goals was of no value. Required: Comment on a possible approach that could be taken to provide objective criteria for performance evaluation in this situation.