Exam 11: Standard Costs and Operating Performance Measures

At Overland Company, maintenance cost is exclusively a variable cost that varies directly with machine-hours. The performance report for July showed that actual maintenance costs totaled $9,800 and that the associated rate variance was $200 unfavorable. If 8,000 machine-hours were actually worked during July, the budgeted maintenance cost per machine-hour was:

Sucharzewski Corporation's management keeps track of the time it takes to process orders. During the most recent month, the following average times were recorded per order: Required: a. Compute the throughput time. b. Compute the manufacturing cycle efficiency (MCE). c. What percentage of the production time is spent in non-value-added activities? d. Compute the delivery cycle time.

Cole laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard costs for one bag of Fastgro as follows: The company had no beginning inventories of any kind on Jan. 1. Variable overhead is applied to production on the basis of standard direct labor-hours. During January, the following activity was recorded by the company: Production of Fastgro: 4,000 bags Direct materials purchased: 85,000 pounds at a cost of $32,300 Direct labor worked: 390 hours at a cost of $4,875 Variable overhead incurred: $1,475 Inventory of direct materials on Jan. 31: 3,000 pounds -The materials price variance for January is:

Schoenfeld Corporation is developing direct labor standards. The basic direct labor wage rate is $10.00 per hour. Employment taxes are 9% of the basic wage rate. Fringe benefits are $3.71 per direct labor-hour. A particular product requires 0.88 direct labor-hours per unit. The allowance for breaks and personal needs is 0.06 direct labor-hours per unit. The allowance for cleanup, machine downtime, and rejects is 0.09 direct labor-hours per unit. -The standard rate per direct labor-hour should be:

Czepiel Corporation is developing standards for its products. One product requires an input that is purchased for $48.00 per kilogram from the supplier. By paying cash, the company gets a discount of 9% off this purchase price. Shipping costs from the supplier's warehouse amount to $2.84 per kilogram. Receiving costs are $0.59 per kilogram. Required: Determine the standard price per kilogram of this input. Show your work!

Bullins Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company has provided the following data for the most recent month: What was the fixed manufacturing overhead budget variance for the month?

The Alpha Company produces toys for national distribution. Standards for a particular toy are: Materials: 12 ounces per unit at 56¢ per ounce. Labor: 2 hours per unit at $2.75 per hour. During the month of December, the company produced 1,000 units. Information for the month follows: Materials: 14,000 ounces were purchased and used at a total cost of $7,140. Labor: 2,500 hours worked at a total cost of $8,000. -The labor efficiency variance is:

An unfavorable materials quantity variance indicates that:

Schoenfeld Corporation is developing direct labor standards. The basic direct labor wage rate is $10.00 per hour. Employment taxes are 9% of the basic wage rate. Fringe benefits are $3.71 per direct labor-hour. A particular product requires 0.88 direct labor-hours per unit. The allowance for breaks and personal needs is 0.06 direct labor-hours per unit. The allowance for cleanup, machine downtime, and rejects is 0.09 direct labor-hours per unit. -The standard direct labor-hours per unit should be:

Discover Motor Company uses a standard cost system to collect costs related to the production of its toothpick motors. The direct labor standard for each toothpick motor is 1.25 hours at a standard cost of $9.50 per hour. During the month of May, Discover's toothpick motor production used 5,900 direct labor-hours at a total direct labor cost of $54,575. This resulted in production of 4,800 toothpick motors for May. What is Discover's labor efficiency variance for the month of May?

The Clark Company makes a single product and uses standard costing. Some data concerning this product for the month of May follow: -The total standard cost for variable overhead for May was closest to:

The Apoundright Company uses standard costing and has established the following standards for its single product: Direct materials: 2 gallons at $3 per gallon Direct labor: 0.5 hours at $8 per hour Variable overhead: 0.5 hours at $2 per hour During November, the company made 4,000 units and incurred the following costs: Direct materials purchased: 8,100 gallons at $3.10 per gallon Direct materials used: 7,600 gallons Direct labor used: 2,200 hours at $8.25 per hour Actual variable overhead: $4,175 The company applies variable overhead to products on the basis of standard direct labor-hours. -The labor efficiency variance for November was:

Sifford Corporation, which makes landing gears, has provided the following data for a recent month: Required: Determine the rate and efficiency variances for the variable overhead item supplies and indicate whether those variables are favorable or unfavorable. Show your work!

Under a standard cost system, the materials price variances are usually the responsibility of the:

Albro Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below: -The manufacturing cycle efficiency (MCE) was closest to:

Reifsnyder Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below: The manufacturing cycle efficiency (MCE) was closest to:

Manufacturing Cycle Efficiency (MCE) is computed as:

Gildon Corporation produces metal telephone poles. In the most recent month, the company budgeted production of 7,200 poles. Actual production was 7,600 poles. According to standards, each pole requires 6.5 machine-hours. The actual machine-hours for the month were 49,890 machine-hours. The budgeted indirect labor is $1.20 per machine-hour. The actual indirect labor cost for the month was $56,408. The variable overhead efficiency variance for indirect labor is:

Nodine Fabrication Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company's cost formula for variable overhead is $7.50 per MH. The company had budgeted its fixed manufacturing overhead cost at $48,000 for the month. During the month, the actual total variable overhead was $59,760 and the actual total fixed manufacturing overhead was $45,000. The actual level of activity for the period was 8,300 MHs. What was the total of the variable overhead rate and fixed manufacturing overhead budget variances for the month?

The Alpha Company produces toys for national distribution. Standards for a particular toy are: Materials: 12 ounces per unit at 56¢ per ounce. Labor: 2 hours per unit at $2.75 per hour. During the month of December, the company produced 1,000 units. Information for the month follows: Materials: 14,000 ounces were purchased and used at a total cost of $7,140. Labor: 2,500 hours worked at a total cost of $8,000. -The labor rate variance is: