Family Fashions uses standard costs for its manufacturing division.The allocation base for overhead costs is direct labor hours.From the following data,calculate the fixed overhead volume variance. \[\begin{array} { | l | l | } \hline \text { Actual fixed overhead } & \$ 40,000 \\ \hline \text { Budgeted fixed overhead } & \$ 21,000 \\ \hline \text { Standard overhead allocation rate } & \$ 8 \\ \hline \text { Standard direct labor hours per unit } & 4 \text { DLHr } \\ \hline \text { Actual output } & 2100 \text { units } \\ \hline \end{array}\]

A) $16,800 F B) $46,200 U C) $46,200 F D) $16,800 U A) $16,800 F B) $46,200 U C) $46,200 F D) $16,800 U

The management of Earth Barber Lawnmowers has calculated the following variances: \[\begin{array} { | l | r | } \hline \text { Direct materials cost variance } & \$ 10,000 \mathrm { U } \\ \hline \text { Direct materials efficiency variance } & 35,000 \mathrm {~F} \\ \hline \text { Direct labor cost variance } & 16,000 \mathrm {~F} \\ \hline \text { Direct labor efficiency variance } & 12,000 \mathrm { U } \\ \hline \text { Variable overhead cost variance } & 3000 \mathrm {~F} \\ \hline \text { Variable overhead efficiency variance } & 6500 \mathrm {~F} \\ \hline \text { Fixed overhead cost variance } & 4000 \mathrm {~F} \\ \hline \text { Fixed overhead volume variance } & 2,500 \mathrm {~F} \\ \hline \end{array}\] When determining the total product cost flexible budget variance,what is the total fixed overhead variance of the company?

A) $6500 F B) $4000 F C) $10,500 F D) $5500 F A) $6500 F B) $4000 F C) $10,500 F D) $5500 F

Apogee Fashions uses standard costs for their manufacturing division.The allocation base for overhead costs is direct labor hours.From the following data,calculate the fixed overhead allocated to production based on direct labor hours (DLHr). \[\begin{array} { | l | l | } \hline \text { Actual fixed overhead } & \$ 40,000 \\ \hline \text { Budgeted fixed overhead } & \$ 23,000 \\ \hline \text { Standard overhead allocation rate } & \$ 8 \\ \hline \text { Standard direct labor hours per unit } & 3 \text { DLHr } \\ \hline \text { Actual output } & 2500 \text { units } \\ \hline \end{array}\]

A) $23,000 B) $60,000 C) $40,000 D) $20,000 A) $23,000 B) $60,000 C) $40,000 D) $20,000

Exam 23: Flexible Budgets and Standard Cost Systems

The static budget,at the beginning of the month,for Wadsworth Company follows: Static budget: Sales volume: 2000 units; Sales price: $50.00 per unit Variable costs: $14.00 per unit; Fixed costs: $25,100 per month Operating income: $46,900 Actual results,at the end of the month,follows: Actual results: Sales volume: 1900 units; Sales price: $58.00 per unit Variable costs: $16.5 per unit; Fixed costs: $34,000 per month Operating income: $44,850 Calculate the flexible budget variance for operating income.

(Multiple Choice)

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Question 121

Favorable and unfavorable variances are subtracted from each other to arrive at a net favorable or unfavorable variance.

(True/False)

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Question 122

An efficiency variance measures how well the business uses its materials or human resources.

(True/False)

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Question 123

Lewis Manufacturing uses a standard cost system.The direct labor cost standard is $18.00 per direct labor hour.The direct labor efficiency standard is 0.5 direct labor hour per unit.Actual direct labor for the month is 1,200 hours for a total cost of $24,000.Production for the month is 3,000 units.Give the journal entry to record direct labor (not paid).Omit explanation.

(Essay)

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Question 124

A direct labor efficiency variance is favorable if laborers actually work more hours than the flexible budget calls for to produce the actual quantity of output.

(True/False)

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Question 125

Family Fashions uses standard costs for its manufacturing division.The allocation base for overhead costs is direct labor hours.From the following data,calculate the fixed overhead volume variance. Actual fixed overhead \ 40,000 Budgeted fixed overhead \ 21,000 Standard overhead allocation rate \ 8 Standard direct labor hours per unit 4 DLHr Actual output 2100 units

(Multiple Choice)

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Question 126

Favorable and unfavorable variances are netted together in the same way debits and credits are.

(True/False)

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Question 127

The fixed overhead volume variance is a volume variance,not a cost variance.

(True/False)

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Question 128

The static budget,at the beginning of the month,for La Verne Company follows: Static budget: Sales volume: 2100 units: Sales price: $56.00 per unit Variable cost: $14.00 per unit: Fixed costs: $26,000 per month Operating income: $62,200 Actual results,at the end of the month,follows: Actual results: Sales volume: 1800 units: Sales price: $59.00 per unit Variable cost: $16.00 per unit: Fixed costs $35,000 per month Operating income: $42,400 Calculate the sales volume variance for variable costs.

(Multiple Choice)

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Question 129

A variance is the difference between an actual amount and the budgeted amount.

(True/False)

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Question 130

The management of Earth Barber Lawnmowers has calculated the following variances: Direct materials cost variance \ 10,000 Direct materials efficiency variance 35,000 Direct labor cost variance 16,000 Direct labor efficiency variance 12,000 Variable overhead cost variance 3000 Variable overhead efficiency variance 6500 Fixed overhead cost variance 4000 Fixed overhead volume variance 2,500 When determining the total product cost flexible budget variance,what is the total fixed overhead variance of the company?

(Multiple Choice)

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Question 131

Which of the following is the correct formula for measuring a cost variance?

(Multiple Choice)

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Question 132

The efficiency variance measures ________.

(Multiple Choice)

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Question 133

A favorable direct materials cost variance occurs when the actual direct materials cost incurred is less than the standard direct materials cost.

(True/False)

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Question 134

Apogee Fashions uses standard costs for their manufacturing division.The allocation base for overhead costs is direct labor hours.From the following data,calculate the fixed overhead allocated to production based on direct labor hours (DLHr). Actual fixed overhead \ 40,000 Budgeted fixed overhead \ 23,000 Standard overhead allocation rate \ 8 Standard direct labor hours per unit 3 DLHr Actual output 2500 units

(Multiple Choice)

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Question 135

A report that summarizes actual results,budgeted amounts and the difference between them is called the ________.

(Multiple Choice)

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Question 136

The following information relates to Randolph Manufacturing's overhead costs for the month: Static budget variable overhead \ 14,200 Static budget fixed overhead \ 5,600 Static budget direct labor hours 1,000 hours Static budget number of units 5,000 units Randolph allocates manufacturing overhead to production based on standard direct labor hours. Randolph reported the following actual results for last month: actual variable overhead,$14,500; actual fixed overhead,$5,400; actual production of 4,700 units at 0.22 direct labor hours per unit.The standard direct labor time is 0.20 direct labor hours per unit. Compute the variable overhead efficiency variance.(round the answer to the nearest dollar)

(Essay)

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Question 137

A standard cost system helps management set performance standards.

(True/False)

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Question 138

Which of the following is a reason companies use standard costs?

(Multiple Choice)

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Question 139

Seaworthy Designs manufactures special metallic materials and decorative fittings for luxury yachts that require highly skilled labor.Seaworthy uses standard costs to prepare its flexible budget.For the first quarter of the year,direct materials and direct labor standards for one of their popular products were as follows: Direct materials: 4 pounds per unit; $6 per pound Direct labor: 4 hours per unit; $17 per hour During the first quarter,Seaworthy produced 4000 units of this product.Actual direct materials and direct labor costs were $66,000 and $328,000,respectively. For the purpose of preparing the flexible budget,what is the total standard direct labor cost at a production volume of 4000 units?

(Multiple Choice)

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Question 140

Showing 121 - 140 of 223

Favorable and unfavorable variances are subtracted from each other to arrive at a net favorable or unfavorable variance.

An efficiency variance measures how well the business uses its materials or human resources.

A direct labor efficiency variance is favorable if laborers actually work more hours than the flexible budget calls for to produce the actual quantity of output.

Favorable and unfavorable variances are netted together in the same way debits and credits are.

The fixed overhead volume variance is a volume variance,not a cost variance.

A variance is the difference between an actual amount and the budgeted amount.

Which of the following is the correct formula for measuring a cost variance?

The efficiency variance measures ________.

A favorable direct materials cost variance occurs when the actual direct materials cost incurred is less than the standard direct materials cost.

A report that summarizes actual results,budgeted amounts and the difference between them is called the ________.

A standard cost system helps management set performance standards.

Which of the following is a reason companies use standard costs?

Accounting and the Business Environment

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Introduction to Managerial Accounting

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