Exam 10: Standard Costing and Variance Analysis

Kris Company calculates its predetermined rates using practical volume, which is 325,000 units.The standard cost system allows 3 direct labor hours per unit produced.Overhead is applied using direct labor hours.The total budgeted overhead is $4,260,000, of which $994,000 is fixed overhead.The actual results for the year are as follows: - Calculate the variable overhead spending variance.

Crawford Company's standard fixed overhead cost is $6 per direct labor hour based on budgeted fixed costs of $600,000.The standard allows one direct labor hour per unit.Last year, Crawford produced 110,000 units of product, incurred $630,000 of fixed overhead costs, and recorded 212,000 actual hours of direct labor. - What is Crawford's fixed overhead spending variance for last year?

During the month of March, Baker's Express purchased 10,000 pounds of flour at $1 per pound.At the end of March, Baker's Express found that it had a favorable materials price variance of $500.The standard cost per pound must be

The variable overhead efficiency variance claims to measure

The Perfect Tool Company (South America Division) produced 80,000 saw blades during the year.It took 1.5 hours of labor per blade at a rate of $8.50 per hour.However, its standard labor rate is $8.00.Its labor efficiency variance was an unfavorable $40,000. - What is the journal entry to record both labor variances?

The standard cost sheet provides the input standards needed to compute the total amount of inputs allowed for the actual output, an essential component in computing efficiency variances.

In a standard cost system, variable overhead is applied

Fluorspar Company's standard variable overhead rate is $4.00 per direct labor hour, and each unit requires 3 standard direct labor hours.During March, Fluorspar recorded 3,000 actual direct labor hours, $40,000 actual variable overhead costs, and 2,500 units of product manufactured. ​ What is the total variable overhead variance for March for Fluorspar?

Kris Company calculates its predetermined rates using practical volume, which is 325,000 units.The standard cost system allows 3 direct labor hours per unit produced.Overhead is applied using direct labor hours.The total budgeted overhead is $4,260,000, of which $994,000 is fixed overhead.The actual results for the year are as follows: - Calculate the applied fixed overhead.

Although general responsibility for the volume variance is usually assigned to the purchasing department, responsibility on occasion may be assigned to the production department.

In a ____________________, costs are assigned to products using quantity and price standards for all three manufacturing costs: direct materials, direct labor, and overhead.

Match the variance with its correct calculation. -Materials Price Variance

The formula for calculating the variable overhead efficiency variance is

Assume that SQ = Standard Quantity, SP = Standard Price, AQ = Actual Quantity, and AP = Actual Price.Which of the following is the correct entry along with the equation to record the issuance and usage of materials?

Highland Company's standard cost is $250,000.The allowable deviation is ±10%.Its actual costs for six months are The upper and lower control limits are, respectively,

To compute the standard direct labor hours allowed, multiply the unit labor standard by the actual output.

Bortello Corporation produces high-quality leather boots.The company has a standard cost system and has set the following standards for materials and labor: During the year Bortello produced 125 boots.Actual leather purchased was 1,700 strips, at $16 per strip.There were no beginning or ending inventories of leather.Actual direct labor was 1,500 hours at $15 per hour. - Compute the costs of leather and direct labor that should have been incurred for the production of 125 boots.

The standard cost system differs from the actual cost system in the assignment of

Fixed overhead costs are resources acquired as used and needed.

During the month of March, Rexelegg purchased 25,000 pounds of flour at $2 per pound.At the end of March, Rexelegg found that it had an unfavorable materials price variance of $750.The standard cost per pound must be: