Exam 24: Flexible Budgets and Standard Costs

The difference between actual and standard cost caused by the difference between the actual quantity and the standard quantity is called the:

Bradford Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units. The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units. What is the direct materials price variance?

Chips Co. assigned direct labor cost to its products in May for 1,300 standard hours of direct labor at the standard $8 per hour rate. The direct labor rate variance for the month was $200 favorable and the direct labor efficiency variance was $150 favorable. Prepare the journal entry to charge Goods in Process Inventory for the standard labor cost of the goods manufactured in May and to record the direct labor variances. Assuming that the direct labor variances are immaterial, prepare the journal entry that Chips would make to close the variance accounts.

The amounts in a flexible budget are based on one expected level of sales or production.

Cabot Company collected the following data regarding production of one of its products. Compute the direct labor efficiency variance.

A favorable variance for a cost means that when compared to the budget, the actual cost is ____________________ than the budgeted cost.

A job was budgeted to require 3 hours of labor per unit at $8.00 per hour. The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000. What is the total labor cost variance?

A planning budget based on a single predicted amount of sales or production volume is called a:

A cost variance equals the sum of the quantity variance and the price variance.

Define standard costs. How do they assist management?

Which department is often responsible for the direct materials price variance?

An overhead cost variance is the difference between the actual overhead incurred for the period and the standard overhead applied.

A company provided the following direct materials cost information. Compute the cost variance.

Variable budget is another name for:

The standard materials cost to produce 1 unit of Product M is 6 pounds of material at a standard price of $50 per pound. In manufacturing 8,000 units, 47,000 pounds of material were used at a cost of $51 per pound. What is the total direct materials cost variance?

The following information describes a company's usage of direct labor in a recent period. The direct labor rate variance is:

Adams Co. uses the following standard to produce a single unit of its product: variable overhead (2 hrs. @ $3/hr.) $6. Actual data for the month show variable overhead costs of $150,000, and 24,000 units produced. The total variable overhead variance is:

Cabot Company collected the following data regarding production of one of its products. Compute the variable overhead spending variance.

Casco Co. planned to produce and sell 40,000 units. At that volume level, variable costs are determined to be $320,000 and fixed costs are $30,000. The planned selling price is $10 per unit. Casco actually produced and sold 42,000 units. Using a contribution margin format: (a) Prepare a fixed budget income statement for the planned level of sales and production. (b) Prepare a flexible budget income statement for the actual level of sales and production.

A company's flexible budget for 48,000 units of production showed variable overhead costs of $72,000 and fixed overhead costs of $64,000. The company incurred overhead costs of $122,800 while operating at a volume of 40,000 units. The total controllable cost variance is: