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Exam 21: Flexible Budgets and Standard Costing

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Question 91

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A company's flexible budget for 36,000 units of production showed variable overhead costs of $54,000 and fixed overhead costs of $50,000. The company actually incurred total overhead costs of $95,300 while operating at a volume of 32,000 units. What is the controllable variance?

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* $54,000 variable o...

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Question 92

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Which of the following variances is not used in a standard cost system?

A) Variable overhead spending variance
B) Fixed overhead spending variance
C) Variable overhead efficiency variance
D) Fixed overhead efficiency variance
E) Fixed overhead volume variance

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

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Question 93

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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 quantity variance?

A variable or flexible budget is so named because it only focuses on variable costs.

Make the necessary general journal entries to record the above standard and actual costs, and all variances.

Variable budget is another name for a flexible budget.

A direct labor cost variance may be broken down into a controllable variance and a volume variance.

The following information describes a company's usage of direct labor in a recent period: $\begin{array} { l r } \text { Actual hours used } & 45,000 \\\text { Actual rate per hour } & \$ 15 \\\text { Standard rate per hour } & \$ 14 \\\text { Standard hours for units produced } & 47,000\end{array}$ -The direct labor rate variance is:

A company has established 5 pounds of Material M at $2 per pound as the standard for the material in its Product A. The company has just produced 1,000 units of this product, using 5,200 pounds of Material M that cost $9,880. -The direct materials quantity variance is:

The standard materials cost to produce one unit of Product K is 7 pounds of material at a standard price of $32 per pound. In manufacturing 8,000 units, 54,000 pounds of material were used at a cost of $30 per pound. What is the total direct material cost variance?

Based on predicted production of 12,000 units, a company anticipates $150,000 of fixed costs and $123,000 of variable costs. The flexible budget amounts of fixed and variable costs for 10,000 units are:

Within the same budget performance report, it is impossible to have both favorable and unfavorable variances.

Perkins Company provides the following data developed for its master budget: $\begin{array}{ll}\text { Sales price } & \$ 11.00 \text { per unit } \\\text { Costs: } & \\\text { Direct materials } & \$ 3.00 \text { per unit } \\\text { Direct labor } & \$ 4.25 \text { per unit } \\\text { Variable overhead } & \$ 0.50 \text { per unit } \\\text { Factory depreciation } & \$ 12,000 \text { per } \\& \text { month } \\\text { Supervision } & \$ 11,000 \text { per } \\& \text { month } \\\text { Selling expense } & \$ 0.25 \text { per unit } \\\text { Administrative cost } & \$ 9,000 \text { per month }\end{array}$ Required: Prepare flexible budgets for sales of 20,000, 22,000 and 24,000 units. Use a contribution margin format.

Montaigne Corp. has the following information about its standards and production activity in November: -The volume variance is:

A flexible budget is prepared:

Management by exception allows managers to focus on the most significant variances in performance.

A company had a $22,000 favorable direct labor efficiency variance during a time period when the standard rate per direct labor hour was $22 and the actual rate per direct labor hour was $21. If the standard direct labor hours allowed for production were 5,000 what is the amount of actual direct labor cost during this period?