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 manufacturing labour rate variance is

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 flexible-budget variance is

In a journal entry for a standard costing system that records favourable variances,to increase the relevant variance account

A packaging company produces a variety of cardboard boxes in an automated process.Expected production per month is 160,000 units.The required direct materials costs $0.30 per unit.Variable manufacturing overhead costs are $24,000 per month and are allocated based on units of production.Direct labour is budgeted to be $6,400.The company only produces based on customer orders,so all production is considered sold as it is produced.Revenue for the month will be $240,000.What is the budgeted contribution margin per unit?

A static budget is a budget that can be changed or altered after it is developed.

The flexible-budget variance may be the result of inaccurate forecasting of units sold.

Wilson's Winter Woolens manufactures jackets and other wool clothing.A certain designed ski parka requires the following: During the third quarter,the company made 1,500 parkas and used 3,150 square metres of fabric costing $39,375.Direct labour totaled 2,100 hours for $45,150. Required: a.Compute the direct materials price and efficiency variances for the quarter. b.Compute the direct manufacturing labour rate and efficiency variances for the quarter.

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 manufacturing labour efficiency variance is

The flexible-budget variance pertaining to revenues is also called the variance of operating income.

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?

Variances can be expected to vary within some normal limits,so not all variances require further investigation.

The input standard cost per completed unit may be calculated by

If a purchasing agent is able to negotiate a price lower than that set by the current budget by purchasing direct materials of similar quality

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

Wilson's Summer Cottons manufactures shirts and other cotton clothing.A certain designed t-shirt requires the following: During the third quarter,the company made 7,500 t-shirts and used 8,250 square metres of fabric costing $11,550.Direct labour totaled 1,650 hours for $23,265. Required: a.Compute the direct materials price and efficiency variances for the quarter. b.Compute the direct manufacturing labour rate and efficiency variances for the quarter.

Jackson a is a company that delivers automobile repair parts to service garages.The following information is for three of the company's activities in 2015: Required: a.Calculate the flexible-budget variance for each activity in 2015. b.Calculate the price and efficiency variances for each activity in 2015.

A cost of a given activity decreases over continuous time periods.This is considered to be a continuous improvement variable cost.

Flexible budget quantity computations should be focused at the appropriate level of the cost hierarchy.

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 revenues?

When a journal entry is made in a standard cost system to record the liability for direct manufacturing labour costs,the difference between the debit to the work-in-process control account and the credit to the payroll payables is