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Exam 16: Activity Based Costing

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Question 21

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The per-unit standards for direct labor are 2 direct labor hours at $15 per hour.If in producing 1800 units the actual direct labor cost was $48000 for 3000 direct labor hours worked the total direct labor variance is

A) $1800 unfavorable.
B) $6000 favorable.
C) $3750 unfavorable.
D) $6000 unfavorable.

E) A) and C)
F) B) and D)

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Question 22

Multiple Choice

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Clark Company manufactures a product with a standard direct labor cost of two hours at $18.00 per hour.During July 2000 units were produced using 4200 hours at $18.30 per hour.The labor quantity variance was

A) $3660 F.
B) $3600 U.
C) $2460 U.
D) $3660 U.

E) B) and D)
F) A) and B)

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Question 23

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The two levels that standards may be set at are

A total materials variance is analyzed in terms of

Variances from standards are

Dillon has a standard of 1.5 pounds of materials per unit at $6 per pound.In producing 2000 units Dillon used 3100 pounds of materials at a total cost of $18135.Dillon's materials price variance is

In concept standards and budgets are essentially the same.

The per-unit standards for direct materials are 2 gallons at $4 per gallon.Last month 11200 gallons of direct materials that actually cost $42400 were used to produce 6000 units of product.The direct materials quantity variance for last month was

The standard unit cost is used in the calculation of which of the following variances? $\quad$$\quad$$\begin{array}{llcc}\underline{ \text { Materials Price Variance}} & \underline{\text { Materials Quantity Variance } }\end{array}$ a. $\quad$$\quad$$\quad$$\quad$$\quad$$\begin{array}{llcc} \text { No } & \quad\quad\quad\quad\quad\quad\quad\quad\quad\quad \text { No } \end{array}$ b. $\quad$$\quad$$\quad$$\quad$$\quad$$\begin{array}{llcc} \text { No } & \quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Yes } \end{array}$ c. $\quad$$\quad$$\quad$$\quad$$\begin{array}{llcc} \text { Yes } & \quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { No } \end{array}$ d. $\quad$$\quad$$\quad$$\quad$$\begin{array}{llcc} \text { Yes } & \quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Yes } \end{array}$

The customer perspective of the balanced scorecard approach

Once set normal standards should not be changed during the year.

Allowances should not be made in the direct labor quantity standard for

The standard predetermined overhead rate used in setting the standard overhead cost is determined by dividing

The balanced scorecard

The use of an inexperienced worker instead of an experienced employee can result in a favorable labor price variance but probably an unfavorable quantity variance.

The total overhead variance is the difference between actual overhead costs and overhead costs applied to work done.

The final decision as to what standard costs should be is the responsibility of

The direct materials price standard should include an amount for all of the following except

Dillon has a standard of 2 hours of labor per unit at $12 per hour.In producing 2000 units Dillon used 3850 hours of labor at a total cost of $46970.Dillon's total labor variance is

A company uses 40000 gallons of materials for which they paid $7.00 a gallon.The materials price variance was $80000 favorable.What is the standard price per gallon?