Question 1

Sande Corporation makes a product with the following standard costs:  In November the company's budgeted production was 2,900 units but the actual production was 3,000 units. The company used 27,670 grams of the direct material and 1,390 direct labor-hours to produce this output. During the month, the company purchased 31,700 grams of the direct material at a cost of $196,540. The actual direct labor cost was $29,607 and the actual variable overhead cost was $2,502.

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 November is:

Accepted Answer

A) $2,363 U 
B) $2,550 F 
C) $2,550 U 
D) $2,363 F

Question 2

Cuda Corporation makes a product that uses a material with the following standards:  The company budgeted for production of 3,500 units in November, but actual production was 3,300 units. The company used 23,050 pounds of direct material to produce this output. The company purchased 26,000 pounds of the direct material at a total cost of $158,600. The direct materials purchases variance is computed when the materials are purchased.
-The materials price variance for November is:

Accepted Answer

A) $2,145 U 
B) $2,145 F 
C) $2,600 U 
D) $2,600 F

Question 3

Tidd Corporation makes a product with the following standard costs:  The company reported the following results concerning this product in November.  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 November is:

Accepted Answer

A) $2,680 F 
B) $2,546 F 
C) $2,680 U 
D) $2,546 U

Question 4

The standard cost card for a product shows that the product should use 4 kilograms of material B per finished unit and that the standard price of material B is $4.50 per kilogram.During April,when the budgeted production level was 1,000 units,1,040 units were actually made.A total of 4,100 kilograms of material B were used in production and the inventories of material B were reduced by 300 kilograms during April.The total cost of material B purchased during April was $14,400.The material variances for material B during April were:

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 5

Gentile Corporation makes a product with the following standard costs:  The company produced 6,000 units in May using 36,970 kilos of direct material and 4,340 direct labor-hours. During the month, the company purchased 40,400 kilos of the direct material at $4.70 per kilo. The actual direct labor rate was $13.70 per hour and the actual variable overhead rate was $2.70 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 labor efficiency variance for May is:

Accepted Answer

A) $6,302 U 
B) $6,440 U 
C) $6,440 F 
D) $6,302 F

Question 6

The following data have been provided by Tiano Corporation:  
Required:
Compute the variable overhead rate variances for lubricants and for supplies.Indicate whether each of the variances is favorable (F)or unfavorable (U).Show your work!

Accepted Answer

The answer of The following data have been provided by...

Question 7

Davidson Corporation makes a product that has the following direct labor standards:
  In September the company produced 4,900 units using 2,210 direct labor-hours. The actual direct labor rate was $22.40 per hour.

-The labor rate variance for September is:

Accepted Answer

A) $1,470 U 
B) $1,326 U 
C) $1,326 F 
D) $1,470 F

Question 8

The Geurtz Company uses standard costing. The company makes and sells a single product called a Roff. The following data are for the month of August:

• Actual cost of direct material purchased and used: $65,560
• Material price variance: $5,960 unfavorable
• Total materials variance: $22,360 unfavorable
• Standard cost per pound of material: $4
• Standard cost per direct labor-hour: $5
• Actual direct labor-hours: 6,500 hours
• Labor efficiency variance: $3,500 favorable
• Standard number of direct labor-hours per unit of Roff: 2 hours
• Total labor variance: $400 unfavorable

-The standard material allowed to produce one unit of Roff was:

Accepted Answer

A) 1 pound 
B) 4 pounds 
C) 3 pounds 
D) 2 pounds

Question 9

Sande Corporation makes a product with the following standard costs:  In November the company's budgeted production was 2,900 units but the actual production was 3,000 units. The company used 27,670 grams of the direct material and 1,390 direct labor-hours to produce this output. During the month, the company purchased 31,700 grams of the direct material at a cost of $196,540. The actual direct labor cost was $29,607 and the actual variable overhead cost was $2,502.

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 November is:

Accepted Answer

A) $2,530 U 
B) $2,530 F 
C) $2,343 F 
D) $2,343 U

Question 10

Lafountaine Manufacturing 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 manufacturing overhead is $4.70 per MH.During the month,the actual total variable manufacturing overhead was $20,210 and the actual level of activity for the period was 4,700 MHs.What was the variable overhead rate variance for the month?

Accepted Answer

A) $400 unfavorable 
B) $1,880 favorable 
C) $1,880 unfavorable 
D) $400 favorable

Question 11

The Reedy Company uses a standard costing system.The following data are available for November:  The actual direct labor rate for November is:

Accepted Answer

A) $8.80 
B) $8.90 
C) $9.00 
D) $9.20

Question 12

Sande Corporation makes a product with the following standard costs:  In November the company's budgeted production was 2,900 units but the actual production was 3,000 units. The company used 27,670 grams of the direct material and 1,390 direct labor-hours to produce this output. During the month, the company purchased 31,700 grams of the direct material at a cost of $196,540. The actual direct labor cost was $29,607 and the actual variable overhead cost was $2,502.

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 November is:

Accepted Answer

A) $420 U 
B) $434 F 
C) $420 F 
D) $434 U

Question 13

Pikus Corporation makes a product that has the following direct labor standards:  In January the company's budgeted production was 3,400 units, but the actual production was 3,500 units. The company used 640 direct labor-hours to produce this output. The actual direct labor cost was $8,960.
-The labor efficiency variance for January is:

Accepted Answer

A) $840 U 
B) $900 U 
C) $840 F 
D) $900 F

Question 14

When computing standard cost variances,the difference between actual and standard price multiplied by actual quantity yields a(n):

Accepted Answer

A) combined price and quantity variance. 
B) efficiency variance. 
C) price variance. 
D) quantity variance.

Question 15

Thompson Company uses a standard cost system for its single product.The following data are available:
Actual experience for the current year:  
Standards per unit of product:  
Required:
Compute the following variances for raw materials,direct labor,and variable overhead,assuming that the price variance for materials is recognized at point of purchase:
a.Direct materials price variance.
b.Direct materials quantity variance.
c.Direct labor rate variance.
d.Direct labor efficiency variance.
e.Variable overhead rate variance.
f.Variable overhead efficiency variance.

Accepted Answer

The answer of Thompson Company uses a standard cost system...

Question 16

If the labor efficiency variance is unfavorable,then

Accepted Answer

A) actual hours exceeded standard hours allowed for the actual output. 
B) standard hours allowed for the actual output exceeded actual hours. 
C) the standard rate exceeded the actual rate. 
D) the actual rate exceeded the standard rate.

Question 17

Hurren Corporation makes a product with the following standard costs:  The company reported the following results concerning this product in June.  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 June is:

Accepted Answer

A) $1,760 U 
B) $1,782 F 
C) $1,760 F 
D) $1,782 U

Question 18

Last month 75,000 pounds of direct material were purchased and 71,000 pounds were used.If the actual purchase price per pound was $0.50 more than the standard purchase price per pound,then the materials price variance was:

Accepted Answer

A) $2,000 F 
B) $37,500 F 
C) $37,500 U 
D) $35,500 U

Question 19

Acri Corporation produces large commercial doors for warehouses and other facilities.In the most recent month,the company budgeted production of 6,900 doors.Actual production was 7,300 doors.According to standards,each door requires 5.6 machine-hours.The actual machine-hours for the month were 40,360 machine-hours.The standard supplies cost,and element of variable manufacturing overhead,is $4.20 per machine-hour.The actual supplies cost for the month was $168,251.The variable overhead efficiency variance for supplies cost is:

Accepted Answer

A) $3,445 U 
B) $2,184 F 
C) $2,184 U 
D) $3,445 F

Question 20

Bonnot Corporation makes a product that has the following direct labor standards:  The company budgeted for production of 2,100 units in October, but actual production was 1,900 units. The company used 410 direct labor-hours to produce this output. The actual direct labor rate was $20.60 per hour.
-The labor rate variance for October is:

Accepted Answer

A) $164 F 
B) $164 U 
C) $152 U 
D) $152 F

Exam 9: Standard Costs and Variances

The following data have been provided by Tiano Corporation: Required: Compute the variable overhead rate variances for lubricants and for supplies.Indicate whether each of the variances is favorable (F)or unfavorable (U).Show your work!

Davidson Corporation makes a product that has the following direct labor standards: In September the company produced 4,900 units using 2,210 direct labor-hours. The actual direct labor rate was $22.40 per hour. -The labor rate variance for September is:

The Reedy Company uses a standard costing system.The following data are available for November: The actual direct labor rate for November is:

When computing standard cost variances,the difference between actual and standard price multiplied by actual quantity yields a(n) :

If the labor efficiency variance is unfavorable,then

Last month 75,000 pounds of direct material were purchased and 71,000 pounds were used.If the actual purchase price per pound was $0.50 more than the standard purchase price per pound,then the materials price variance was: