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Exam 10: Standard Costs and Overhead Analysis

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Question 111

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The following labour standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: What was the labour rate variance for the month?

A) $1,295 favourable.
B) $1,295 unfavourable.
C) $2,950 favourable.
D) $2950 unfavourable.

E) None of the above
F) A) and D)

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Question 112

Multiple Choice

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What was the fixed overhead budget variance for the period,rounded to the nearest dollar?

A) $950 unfavourable.
B) $1,381 unfavourable.
C) $2,790 favourable.
D) $4,470 unfavourable.

E) A) and B)
F) All of the above

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Question 113

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The overhead spending variance contains price but not quantity elements.

Which of the following statements concerning practical standards is NOT correct?

Web Company uses a standard cost system that applies manufacturing overhead to units of product on the basis of machine hours.During February,the company used a denominator activity of 80,000 machine hours in computing its predetermined overhead rate.However,only 75,000 standard machine hours were allowed for the month's actual production.If the fixed overhead volume variance for February was $6,400 unfavourable,what was the total budgeted fixed overhead cost for the month?

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

At Jacobson Company,indirect labour is a variable cost that varies with direct labour hours.Last month's performance report showed that total actual indirect labour cost was $5,780 for the month and that the associated spending variance was $245 favourable.If 24,100 direct labour hours were actually worked last month,what must be the flexible budget cost formula for indirect labour (per direct labour hour) ?

The following materials standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: Required: a)What is the materials price variance for the month? b)What is the materials quantity variance for the month?

(Appendix 10B)Vernon Mills,Inc.is a large producer of men's and women's clothing.The company uses standard costs for all of its products.The standard costs and actual costs per unit of product for a recent period are given below for one of the company's product lines: During this period,the company produced 4,800 units of this product.A comparison of standard and actual costs for the period on a total cost basis is given below: There was no inventory of materials on hand at the beginning of the period.During the period,21,120 metres of materials were purchased,all of which were used in production. Required: a)(Appendix 10B)For direct materials,compute the price and quantity variances for the period and prepare journal entries to record all activity relating to direct materials for the period. b)(Appendix 10B)For direct labour,compute the rate and efficiency variances and prepare a journal entry to record the incurrence of direct labour cost for the period. c)For variable overhead,compute the spending and efficiency variances.

What was the materials price variance?

During March,Younger Company's direct material costs for product T were as follows: What was Younger's material quantity variance for March?

(Appendix 10C)If two products are poor substitutes,the calculation of a separate market volume variance and a separate market share variance for each product is NOT useful.

What was the fixed overhead budget variance for the period,rounded to the nearest dollar?

What was the amount of fixed overhead cost contained in the company's flexible budget for manufacturing overhead for September?

What amount of fixed overhead would Dori apply to finished production?

What was the fixed overhead volume variance for the period,rounded to the nearest dollar?

What was the variable overhead spending variance?

What was the denominator level of activity in direct labour hours (DLHs) used by Claus in setting the predetermined overhead rate for January?

Which of the following variances would be useful in calling attention to possible problems in the control of spending on overhead items?

(Appendix 10C)If two products are close substitutes,the sales volume variance for each product can be split into a sales quantity variance and a sales mix variance.