Exam 9: Master Budgeting

Gandrud Kennel uses tenant-days as its measure of activity;an animal housed in the kennel for one day is counted as one tenant-day.During June,the kennel budgeted for 2,600 tenant-days,but its actual level of activity was 2,580 tenant-days.The kennel has provided the following data concerning the formulas to be used in its budgeting: The facility expenses in the flexible budget for June would be closest to:

Epley Corporation makes a product with the following standard costs: In July the company produced 3,300 units using 12,240 pounds of the direct material and 2,760 direct labor-hours.During the month,the company purchased 13,000 pounds of the direct material at a cost of $35,100.The actual direct labor cost was $51,612 and the actual variable overhead cost was $20,148. The company applies variable overhead on the basis of direct labor-hours.The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for July is:

Krizum Industries makes heavy construction equipment.The standard for a particular crane calls for 24 direct labor-hours at $16 per direct labor-hour.During a recent period 850 cranes were made.The labor rate variance was zero and the labor efficiency variance was $8,800 unfavorable.How many actual direct labor-hours were worked?

Poor quality materials could have an unfavorable effect on which of the following variances?

The Maxwell Corporation has a standard costing system in which variable manufacturing overhead is assigned to production on the basis of standard machine-hours.The following data are available for July: • Actual variable manufacturing overhead cost incurred: $22,620 • Actual machine-hours worked: 1,600 hours • Variable overhead rate variance: $3,420 Unfavorable • Total variable overhead spending variance: $4,620 Unfavorable The standard number of machine-hours allowed for July production is:

Epley Corporation makes a product with the following standard costs: In July the company produced 3,300 units using 12,240 pounds of the direct material and 2,760 direct labor-hours.During the month,the company purchased 13,000 pounds of the direct material at a cost of $35,100.The actual direct labor cost was $51,612 and the actual variable overhead cost was $20,148. The company applies variable overhead on the basis of direct labor-hours.The direct materials purchases variance is computed when the materials are purchased. The labor efficiency variance for July is:

Olivera Corporation's performance report for last month shows that actual indirect materials cost,a variable cost,was $31,178 and that the spending variance for indirect materials cost was $2,261 unfavorable.During that month,the company worked 11,900 machine-hours.Budgeted activity for the month had been 12,200 machine-hours.The cost formula per machine-hour for indirect materials cost must have been closest to:

A flexible budget cannot be used to estimate what costs should have been at a given level of activity.

Coderre Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During July,the company budgeted for 7,800 units,but its actual level of activity was 7,780 units.The company has provided the following data concerning the formulas used in its budgeting and its actual results for July: Data used in budgeting: Actual results for July: The direct labor in the planning budget for July would be closest to:

Juenemann Kennel uses tenant-days as its measure of activity;an animal housed in the kennel for one day is counted as one tenant-day.During December,the kennel budgeted for 3,800 tenant-days,but its actual level of activity was 3,770 tenant-days.The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for December: Data used in budgeting: Actual results for December: The spending variance for facility expenses in December would be closest to:

The Collins Corporation uses standard costing and has established the following direct material and direct labor standards for each unit of the single product it makes: • Direct materials: 4 gallons at $8 per gallon • Direct labor: 1 hour at $16 per hour During July,the company made 6,000 units of product and incurred the following costs: • Direct materials purchased: 26,800 gallons at $8.20 per gallon • Direct materials used: 25,200 gallons • Direct labor used: 5,600 hours at $15.30 per hour The direct materials purchases variance is computed when the materials are purchased. The labor efficiency variance for July was:

Eliezrie Corporation makes a product with the following standard costs: In January the company's budgeted production was 7,400 units but the actual production was 7,500 units.The company used 45,580 kilos of the direct material and 2,030 direct labor-hours to produce this output.During the month,the company purchased 48,500 kilos of the direct material at a cost of $53,350.The actual direct labor cost was $18,473 and the actual variable overhead cost was $7,714. The company applies variable overhead on the basis of direct labor-hours.The direct materials purchases variance is computed when the materials are purchased. The labor rate variance for January is:

Linscott Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During July,the company budgeted for 5,400 units,but its actual level of activity was 5,380 units.The company has provided the following data concerning the formulas used in its budgeting and its actual results for July: Data used in budgeting: Actual results for July: The spending variance for direct materials in July would be closest to:

Galla Corporation makes a product with the following standard costs: The company budgeted for production of 2,400 units in June,but actual production was 2,500 units.The company used 19,850 pounds of direct material and 980 direct labor-hours to produce this output.The company purchased 21,700 pounds of the direct material at $6.70 per pound.The actual direct labor rate was $19.20 per hour and the actual variable overhead rate was $1.80 per hour. The company applies variable overhead on the basis of direct labor-hours.The direct materials purchases variance is computed when the materials are purchased. The variable overhead rate variance for June is:

Variable manufacturing overhead is applied to products on the basis of standard direct labor-hours.If the labor efficiency variance is unfavorable,the variable overhead efficiency variance will be:

Oddo Corporation makes a product with the following standard costs: The company reported the following results concerning this product in December. The company applies variable overhead on the basis of direct labor-hours.The direct materials purchases variance is computed when the materials are purchased. The labor efficiency variance for December is:

Ohme Framing's cost formula for its supplies cost is $1,620 per month plus $13 per frame.For the month of April,the company planned for activity of 882 frames,but the actual level of activity was 878 frames.The actual supplies cost for the month was $13,500.The supplies cost in the flexible budget for April would be closest to:

Berends Corporation makes a product with the following standard costs: The company reported the following results concerning this product in April. The company applies variable overhead on the basis of direct labor-hours.The direct materials purchases variance is computed when the materials are purchased. The variable overhead efficiency variance for April is:

The standards for product K17 call for 5.0 meters of a raw material that costs $19.10 per meter.Last month,2,700 meters of the raw material were purchased for $51,435.The actual output of the month was 460 units of product K17.A total of 2,500 meters of the raw material were used to produce this output. The direct materials purchases variance is computed when the materials are purchased. Required: a.What is the materials price variance for the month? b.What is the materials quantity variance for the month?

Jackson Industries uses a standard cost system in which direct materials inventory is carried at standard cost.Jackson has established the following standards for one unit of product. During May,Jackson purchased 125,000 pounds of direct material at a total cost of $475,000.The total factory wages for May were $364,000,90 percent of which were for direct labor.Jackson manufactured 22,000 units of product during May using 108,000 pounds of direct material and 28,000 direct labor-hours. The price variance for the direct material acquired by Jackson Industries during May is: