Question 1

Which is not a reason direct labor variances may occur?

Accepted Answer

A) Managers do not correctly anticipate changes in wage rates. 
B) Poor materials are used in production. 
C) Prices rise with direct materials. 
D) All of the above. 
A) Managers do not correctly anticipate changes in wage rates. 
B) Poor materials are used in production. 
C) Prices rise with direct materials. 
D) All of the above.

Question 2

Fred's Fine Roasted Coffee
Fred's Fine Roasted Coffee reports the following data for April 2010 where 500,000 pounds of roasted gourmet coffee beans were actually produced (note: standard costs do not allow for any wastage),
 
Refer to Fred's Fine Roasted Coffee.Calculate the total direct materials variance.

Accepted Answer

A) $56,000 U 
B) $40,500 U 
C) $56,000 F 
D) $40,500 F 
A) $56,000 U 
B) $40,500 U 
C) $56,000 F 
D) $40,500 F

Question 3

Solving for materials and labor.Clayton Company makes fireplace screens.Under the flexible budget,when the firm uses 75,000 direct labor hours,budgeted variable overhead is $75,000,whereas budgeted direct labor costs are $450,000.The company applies variable overhead to production units on the basis of direct labor hours.All data apply to the month of February.The following are some of the variances for February (F denotes favorable;U denotes unfavorable):
   
During February,the firm incurred $400,000 of direct labor costs.According to the standards,each fireplace screen uses one pound of materials at a standard price of $4.00 per pound.The firm produced 100,000 fireplace screens in February.The materials price variance was $0.30 per pound,whereas the average wage rate exceeded the standard average rate by $0.50 per hour.
Required:
Compute the following for February,assuming there are beginning inventories but no ending inventories of materials:
a.pounds of materials purchased
b.pounds of material usage over standard
c.standard hourly wage rate
d.standard direct labor hours for the total February production

Accepted Answer

(Clayton Company;solving for materials a

Question 4

ABC Company
ABC Company reports the following information for the most recent period when 2,750 units were produced.
 
Refer to ABC Company.Calculate the direct labor efficiency variance.

Accepted Answer

A) $70 F 
B) $200 U 
C) $270 U 
D) $130 U 
A) $70 F 
B) $200 U 
C) $270 U 
D) $130 U

Question 5

Java Gourmet Coffee
Java Gourmet Coffee reports the following data for April 2010 where 200,000 pounds of roasted gourmet coffee beans were actually produced (note: standard costs do not allow for any wastage),
Actual:
 
Standard:
 
Refer to Java Gourmet Coffee.Calculate the direct materials efficiency variance.

Accepted Answer

A) $5,000 U 
B) $10,500 U 
C) $5,000 F 
D) $10,500 F 
A) $5,000 U 
B) $10,500 U 
C) $5,000 F 
D) $10,500 F

Question 6

Java Gourmet Coffee
Java Gourmet Coffee reports the following data for April 2010 where 200,000 pounds of roasted gourmet coffee beans were actually produced (note: standard costs do not allow for any wastage),
Actual:
 
Standard:
 
Refer to Java Gourmet Coffee.Calculate the total direct materials variance.

Accepted Answer

A) $15,500 U 
B) $10,500 U 
C) $15,500 F 
D) $10,500 F 
A) $15,500 U 
B) $10,500 U 
C) $15,500 F 
D) $10,500 F

Question 7

Fred's Fine Roasted Coffee
Fred's Fine Roasted Coffee reports the following data for April 2010 where 500,000 pounds of roasted gourmet coffee beans were actually produced (note: standard costs do not allow for any wastage),
 
Refer to Fred's Fine Roasted Coffee.Calculate the total direct labor variance.

Accepted Answer

A) $48,000 F 
B) $20,000 F 
C) $68,000 F 
D) $28,000 F 
A) $48,000 F 
B) $20,000 F 
C) $68,000 F 
D) $28,000 F

Question 8

Fred's Fine Roasted Coffee
Fred's Fine Roasted Coffee reports the following data for April 2010 where 500,000 pounds of roasted gourmet coffee beans were actually produced (note: standard costs do not allow for any wastage),
 
Refer to Fred's Fine Roasted Coffee.Calculate the direct labor price variance.

Accepted Answer

A) $48,000 F 
B) $20,000 F 
C) $68,000 F 
D) $28,000 F 
A) $48,000 F 
B) $20,000 F 
C) $68,000 F 
D) $28,000 F

Question 9

Ben's Delivery Company
Ben's Delivery Company reports the following information for 2010:
Actual:
 
Standard:
 
Refer to Ben's Delivery Company.What is the variable overhead efficiency variance for fuel costs?

Accepted Answer

A) $32.00 F 
B) $ 6.00 U 
C) $12.00 F 
D) $20.00 U 
A) $32.00 F 
B) $ 6.00 U 
C) $12.00 F 
D) $20.00 U

Question 10

Which of the following terms describes the difference between the budgeted (or standard)price and the actual price paid for each unit of input?

Accepted Answer

A) Price variance. 
B) Efficiency variance. 
C) Usage variance. 
D) Quantity variance. 
A) Price variance. 
B) Efficiency variance. 
C) Usage variance. 
D) Quantity variance.

Question 11

How do you apply activity-based costing to variance analysis?

Accepted Answer

Activity-based costing is commonly used

Question 12

Estimating flexible selling expense budget and computing variances.Golden Nugget estimates the following selling expenses next period:
   
Required:
a.Derive the cost equation (y = a + bx)for selling expenses.(Hint: y = a + bx + cy. )
b.Assume that Golden actually sells 60,000 units during the period at an average price of $7 per unit.The company had budgeted sales for the period to be: volume,75,000 units;price,$6.50.Calculate the sales price and volume variance.
c.The actual selling expenses incurred during the period were $90,000 fixed and $40,000 variable.Prepare a profit variance analysis for sales revenue and selling expenses.

Accepted Answer

(Golden Nugget;estimating flexible selli

Question 13

Tool(s)that managers can use to decide when to investigate variances include which of the following?

Accepted Answer

A) Use of both tolerance limits and decision models. 
B) Use of tolerance limits only. 
C) Decision models only. 
D) None of the above. 
A) Use of both tolerance limits and decision models. 
B) Use of tolerance limits only. 
C) Decision models only. 
D) None of the above.

Question 14

Doug's Delivery Company
Doug's Delivery Company reports the following information for 2010:
Actual:
 
Standard:
 
Refer to Doug's Delivery Company.What is the actual fuel cost for March 2010?

Accepted Answer

A) $240.00 
B) $220.00 
C) $200.00 
D) $180.00 
A) $240.00 
B) $220.00 
C) $200.00 
D) $180.00

Question 15

Fixed production costs variances are calculated as

Accepted Answer

A) the difference between actual and budgeted fixed costs. 
B) (actual hours ´ standard inputs)- budgeted fixed costs. 
C) (actual hours ´ standard outputs)- budgeted fixed costs. 
D) (actual hours ´ standard outputs)- actual fixed costs. 
A) the difference between actual and budgeted fixed costs. 
B) (actual hours ´ standard inputs)- budgeted fixed costs. 
C) (actual hours ´ standard outputs)- budgeted fixed costs. 
D) (actual hours ´ standard outputs)- actual fixed costs.

Question 16

Doug's Delivery Company
Doug's Delivery Company reports the following information for 2010:
Actual:
 
Standard:
 
Refer to Doug's Delivery Company.What is the variable overhead efficiency variance for fuel costs?

Accepted Answer

A) $20.00 U 
B) $20.00 F 
C) $18.00 U 
D) $18.00 F 
A) $20.00 U 
B) $20.00 F 
C) $18.00 U 
D) $18.00 F

Question 17

Which of the following is an example of a major cost component of variable overhead?

Accepted Answer

A) Direct material. 
B) Direct labor. 
C) Indirect material. 
D) All of the above. 
A) Direct material. 
B) Direct labor. 
C) Indirect material. 
D) All of the above.

Question 18

KF Company
KF Company uses standard costing.The company reported the following information for the current period:
 
Refer to KF Company.Calculate the variable overhead price variance.

Accepted Answer

A) $1,000 U 
B) $ 500 F 
C) $1,000 F 
D) $ 500 U 
A) $1,000 U 
B) $ 500 F 
C) $1,000 F 
D) $ 500 U

Question 19

Doug's Delivery Company
Doug's Delivery Company reports the following information for 2010:
Actual:
 
Standard:
 
Refer to Doug's Delivery Company.What is the variable overhead flexible budget for March 2010?

Accepted Answer

A) $180.00 
B) $198.00 
C) $220.00 
D) $240.00 
A) $180.00 
B) $198.00 
C) $220.00 
D) $240.00

Question 20

Overhead variances.Upton,Inc. ,uses standard costing.The company reported the following overhead information for the current period:
   
Required:
Calculate the variable and fixed overhead variances.
(Upton Inc. ;overhead variances. )

Accepted Answer

The answer of Overhead variances.Upton,Inc. ,uses standard costing.The company reported...

Which is not a reason direct labor variances may occur?

ABC Company ABC Company reports the following information for the most recent period when 2,750 units were produced. Refer to ABC Company.Calculate the direct labor efficiency variance.

Ben's Delivery Company Ben's Delivery Company reports the following information for 2010: Actual: Standard: Refer to Ben's Delivery Company.What is the variable overhead efficiency variance for fuel costs?

Which of the following terms describes the difference between the budgeted (or standard)price and the actual price paid for each unit of input?

How do you apply activity-based costing to variance analysis?

Tool(s)that managers can use to decide when to investigate variances include which of the following?

Doug's Delivery Company Doug's Delivery Company reports the following information for 2010: Actual: Standard: Refer to Doug's Delivery Company.What is the actual fuel cost for March 2010?

Fixed production costs variances are calculated as

Doug's Delivery Company Doug's Delivery Company reports the following information for 2010: Actual: Standard: Refer to Doug's Delivery Company.What is the variable overhead efficiency variance for fuel costs?

Which of the following is an example of a major cost component of variable overhead?

KF Company KF Company uses standard costing.The company reported the following information for the current period: Refer to KF Company.Calculate the variable overhead price variance.

Doug's Delivery Company Doug's Delivery Company reports the following information for 2010: Actual: Standard: Refer to Doug's Delivery Company.What is the variable overhead flexible budget for March 2010?

Overhead variances.Upton,Inc. ,uses standard costing.The company reported the following overhead information for the current period: Required: Calculate the variable and fixed overhead variances. (Upton Inc. ;overhead variances. )

Fundamental Concepts

Measuring Product Costs

Activity-Based Management

Strategic Management of Costs,quality,and Time

Cost Drivers and Cost Behavior

Financial Modeling for Short-Term Decision Making

Differential Cost Analysis for Operating Decisions

Capital Expenditure Decisions

Profit Planning and Budgeting

Investment Center Performance Evaluation

Incentive Issues

Allocating Costs to Responsibility Centers

Filters

Exam 10: Profit and Cost Center Performance Evaluation

Which is not a reason direct labor variances may occur?

ABC Company ABC Company reports the following information for the most recent period when 2,750 units were produced. Refer to ABC Company.Calculate the direct labor efficiency variance.

Ben's Delivery Company Ben's Delivery Company reports the following information for 2010: Actual: Standard: Refer to Ben's Delivery Company.What is the variable overhead efficiency variance for fuel costs?

Which of the following terms describes the difference between the budgeted (or standard)price and the actual price paid for each unit of input?

How do you apply activity-based costing to variance analysis?

Tool(s)that managers can use to decide when to investigate variances include which of the following?

Doug's Delivery Company Doug's Delivery Company reports the following information for 2010: Actual: Standard: Refer to Doug's Delivery Company.What is the actual fuel cost for March 2010?

Fixed production costs variances are calculated as

Doug's Delivery Company Doug's Delivery Company reports the following information for 2010: Actual: Standard: Refer to Doug's Delivery Company.What is the variable overhead efficiency variance for fuel costs?

Which of the following is an example of a major cost component of variable overhead?

KF Company KF Company uses standard costing.The company reported the following information for the current period: Refer to KF Company.Calculate the variable overhead price variance.

Doug's Delivery Company Doug's Delivery Company reports the following information for 2010: Actual: Standard: Refer to Doug's Delivery Company.What is the variable overhead flexible budget for March 2010?

Overhead variances.Upton,Inc. ,uses standard costing.The company reported the following overhead information for the current period: Required: Calculate the variable and fixed overhead variances. (Upton Inc. ;overhead variances. )

Fundamental Concepts

Measuring Product Costs

Activity-Based Management

Strategic Management of Costs,quality,and Time

Cost Drivers and Cost Behavior

Financial Modeling for Short-Term Decision Making

Differential Cost Analysis for Operating Decisions

Capital Expenditure Decisions

Profit Planning and Budgeting

Investment Center Performance Evaluation

Incentive Issues

Allocating Costs to Responsibility Centers

Filters