Braun3 11 Tif

Managerial Accounting, 3e (Braun/Tietz) Chapter 11 Standard Costs and Variances
1) Ideal standards allow for a normal amount of waste and inefficiency. Answer: FALSE Diff: 1 LO: 11-1 EOC: E11- ! AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis ) A standard cost for )roduction in)uts is a carefully )redetermined cost t&at usually is e*)ressed on a )er-unit +asis. Answer: %#,E Diff: 1 LO: 11-1 EOC: E11- ! AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis -) If a com)any )roduces many different )roducts. it will de$elo) a standard cost for eac& ty)e of )roduct. Answer: %#,E Diff: 1 LO: 11-1 EOC: S11-/ AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 0) Standard costs for )roduction in)uts are used to de$elo) fle*i+le +ud(ets. Answer: %#,E Diff: 1 LO: 11-1 EOC: S11-/ AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis !) %&e standard for t&e direct la+or rate )er &our does not include frin(e +enefits suc& as &ealt& care insurance and $acations. Answer: FALSE Diff: 1 LO: 11-1 EOC: E11- ! AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis
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/) 3erfection standards do not allow for any )oor 5uality raw materials. waste in t&e )roduction )rocess. mac&ine+rea'down. or ot&er inefficiencies. Answer: %#,E Diff: 1 LO: 11-1 EOC: S11-/ AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 6) A sales $olume $ariance will occur w&en t&e num+er of units actually sold differs from t&e $olume ori(inally )lanned for in t&e master +ud(et. Answer: %#,E Diff: 1 LO: 11-1 EOC: E11- ! AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 7) A8n) 99999999 is a carefully )redetermined cost t&at is usually e*)ressed on a )er unit +asis. A) allocated cost ") a))lied cost C) standard cost D) fle*i+le cost Answer: C Diff: 1 LO: 11-1 EOC: E11-10 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis :) %&e ty)e of standard t&at )ro$ides allowances for normal waste and inefficiency in t&e )roduction )rocess is referred to as a8n) A) ideal standard. ") )erfection standard. C) realistic standard. D) )ractical standard. Answer: D Diff: 1 LO: 11-1 EOC: E11-10 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis
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12) ;&at standard8s) do8es) direct materials and direct la+or &a$e w&en calculatin( standard costs< A) =uantity>Efficiency standard ") 3rice standard C) Fle*i+le standard D) "ot& A and " Answer: D Diff: 1 LO: 11-1 EOC: E11-10 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 11) ?alan@a Desi(ns. w&ic& )roduces earrin(s. is de$elo)in( direct material standards. Eac& earrin( re5uires 2.! 'ilo(rams of a s)ecial metal. %&e allowance for waste is 2.2- 'ilo(rams )er earrin(. w&ile t&e allowance for re@ects is 2.2 'ilo(rams )er earrin(. ;&at is t&e standard 5uantity of metal )er earrin(< A) 2.! 'ilo(rams ") 2.!! 'ilo(rams C) 2.!6 'ilo(rams D) 2.!0 'ilo(rams Answer: C E*)lanation: C) .! '( A .2- '( A .2 '( B .!6 '( Diff: LO: 11-1 EOC: E11-10 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 1 ) 3i)er Cor)oration. w&ic& manufactures do( toys. is de$elo)in( direct la+or standards. %&e +asic direct la+or rate is C1 .22 )er &our. 3ayroll ta*es are 1-D of t&e +asic direct la+or rate. w&ile frin(e +enefits suc& as $acation and &ealt& care insurance. are C/.22 )er &our. ;&at is t&e standard rate )er direct la+or &our< A) C1:.!/ ") C17.22 C) C1 .22 D) C1-.!/ Answer: A E*)lanation: A) C1 .22 E 1.1- D B C1-.!/F Frin(e +enefits /.22 %otal C1:.!/ Diff: LO: 11-1 EOC: E11-10 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis
1-) SandyGs Sauces. w&ic& )roduces stir-fry sauces. is de$elo)in( direct material standards. Eac& +ottle of sauce re5uires 2.62 'ilo(rams of +ase. %&e allowance for waste is 2.2! 'ilo(rams )er +ottle. w&ile t&e allowance for re@ects is 2.2: 'ilo(rams )er +ottle. ;&at is t&e standard 5uantity of +ase )er +ottle< A) 2.62 'ilo(rams ") 2.6: 'ilo(rams C) 2.6! 'ilo(rams D) 2.70 'ilo(rams Answer: D E*)lanation: D) .62'( A .2! A .2: B .70 '( Diff: LO: 11-1 EOC: E11-10 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 10) %&eresa Cor)oration. w&ic& manufactures +as'ets. is de$elo)in( direct la+or standards. %&e +asic direct la+or rate is C -.22 )er &our. 3ayroll ta*es are 12D of t&e +asic direct la+or rate. w&ile frin(e +enefits suc& as $acation and &ealt& care insurance. are C7.22 )er &our. ;&at is t&e standard rate )er direct la+or &our< A) C--.-2 ") C -.22 C) C !.-2 D) C-1.22 Answer: A E*)lanation: A) C -.22 E 112 D B C !.-2 Frin(e +enefits 7.22 %otal C--.-2 Diff: LO: 11-1 EOC: E11-10 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 1!) DO% Safety Systems manufactures motorcycle &elmets. ;&at is t&e standard 5uantity of material used to manufacture eac& &elmet if t&e material re5uired is 1. )ounds. and DO% allows for . ! )ounds of waste and .-! )ounds of re@ected material< A) 1.72 )ounds ") 1.0! )ounds C) 1.!! )ounds D) 1. 2 )ounds Answer: A E*)lanation: A) 1. A . ! A .-! B 1.7 Diff: LO: 11-1 EOC: E11-10 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 1/) 4a))y 4el)ers Haid Ser$ice is calculatin( its standard direct la+or rate. %&e direct la+or rate is C1 )er &our. 4a))y 4el)ers incurs )ayroll ta* e*)ense of 1!D of t&e direct la+or rate and incurs costs for sic'-days and $acation days of C- )er &our. ;&at is t&e standard rate )er direct la+or &our< A) C1!.22 ") C1/.72 0 Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
C) C1 .22 D) C1-.72 Answer: " E*)lanation: ") C1 .22 E 11!D B C1-.72 Frin(e +enefits -.22 %otal C1/.72 Diff: LO: 11-1 EOC: E11-10 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 16) 3rice $ariances for direct materials s&ows &ow muc& of t&e total $ariance is due to )ayin( &i(&er or lower )rices t&an e*)ected for t&e direct materials )urc&ased. Answer: %#,E Diff: 1 LO: 11EOC: E11- ! AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 17) It is )ossi+le to &a$e a situation w&ere t&e direct materials )rice $ariance is fa$ora+le and t&e direct materials 5uantity $ariance is unfa$ora+le. Answer: %#,E Diff: 1 LO: 11EOC: E11- ! AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1:) A )rice $ariance for )roduction in)uts is t&e difference +etween t&e actual unit )rice of an in)ut and t&e standard unit )rice of t&e in)ut. multi)lied +y t&e actual in)ut 5uantity. Answer: %#,E Diff: 1 LO: 11EOC: E11- 2 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances.
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2) A )rice $ariance for direct materials measures &ow well a com)any 'ee)s unit )rices of material wit&in standards. Answer: %#,E Diff: 1 LO: 11EOC: E11- ! AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. 1) If t&e standard 5uantity allowed for direct materials is (reater t&an t&e actual 5uantity used. t&e 5uantity $ariance is unfa$ora+le. Answer: FALSE Diff: 1 LO: 11EOC: E11- ! AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. ) A 5uantity $ariance for )roduction in)uts is t&e difference +etween t&e actual 5uantity of in)ut and t&e standard 5uantity of in)ut. multi)lied +y t&e standard unit )rice of in)ut. Answer: %#,E Diff: 1 LO: 11EOC: E11- 2 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. -) %&e direct materials )rice $ariance is 8actual )rice-standard )rice) times actual 5uantity )urc&ased. Answer: %#,E Diff: 1 LO: 11EOC: E11-1/ AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. 0) A direct materials fle*i+le +ud(et $ariance can +e +ro'en down into a )rice $ariance and a 5uantity $ariance. Answer: %#,E Diff: 1 LO: 11EOC: E11-1/ AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. !) #aw material. ruined t&rou(& mista'es durin( )roduction. will result in a materials 5uantity $ariance. Answer: %#,E Diff: 1 LO: 11EOC: E11-1/ AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances / Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
/) If t&e )urc&asin( mana(er )urc&ased a (reater 5uantity of raw materials t&an +ud(eted. +ut )aid t&e standard )rice. w&ic& $ariance would +e affected< A) Haterials )rice $ariance ") Haterials 5uantity $ariance C) "ot& of t&e $ariances would +e affected D) Ieit&er of t&e $ariances would +e affected Answer: D Diff: LO: 11EOC: E11-1/ AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. 6) ;&ic& $ariance is directly im)acted if a wor'er dro)s t&e raw material durin( )roduction and t&e raw material must +e discarded< A) Haterials 5uantity $ariance ") Haterials )rice $ariance C) La+or rate $ariance D) La+or efficiency $ariance Answer: A Diff: LO: 11EOC: E11-1/ AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances.
7) A com)any uses su(ar in )roducin( its )roduct. If t&e )rice of su(ar dou+les. w&ic& $ariance is directly im)acted< A) Haterials 5uantity $ariance ") Haterials )rice $ariance C) La+or rate $ariance D) La+or efficiency $ariance Answer: " Diff: LO: 11EOC: E11-1/ AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. :) A com)anyGs )urc&asin( de)artment ne(otiates all of t&e )urc&asin( contracts for raw materials. ;&ic& $ariance is most useful in assessin( t&e )erformance of t&e )urc&asin( de)artment< A) Haterials 5uantity $ariance ") Haterials )rice $ariance C) La+or rate $ariance D) La+or efficiency $ariance Answer: " Diff: 1 LO: 11EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. -2) ;&ic& of t&e followin( situations would lead to a fa$ora+le direct materials )rice $ariance< A) %&e )urc&asin( mana(er was a+le to ne(otiate a lower )urc&ase )rice for raw materials. ") A $endor s&i))ed a (reater 5uantity of raw materials t&an ordered. C) %&e )urc&asin( mana(er )aid a )remium )rice for a &i(&er 5uality of raw materials. D) #aw materials waste was su+stantially reduced in t&e factory. Answer: A Diff: 1 LO: 11EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances.
-1) %&e direct materials )rice $ariance is calculated as A) t&e difference in 5uantities multi)lied +y t&e actual )rice of t&e in)ut. ") t&e actual amount of direct materials )urc&ased di$ided +y t&e actual 5uantity. C) t&e difference in )rices multi)lied +y t&e actual 5uantity of t&e in)ut )urc&ased. D) t&e actual 5uantity of direct materials )urc&ased di$ided +y t&e )er unit )rice. Answer: C Diff: 1 LO: 11EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. - ) %&e standard 5uantity of direct materials is calculated as A) t&e +ud(eted 5uantity of units less t&e standard 5uantity of units. ") t&e standard 5uantity of in)ut )er unit times t&e num+er of units +ud(eted. C) t&e num+er of units actually made times t&e direct materials )rice standard. D) t&e standard 5uantity of in)ut )er unit times t&e num+er of units actually made. Answer: D Diff: 1 LO: 11EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. --) A fa$ora+le direct materials 5uantity $ariance indicates w&ic& of t&e followin(< A) %&e actual cost of direct materials was less t&an t&e standard cost of direct materials. ") %&e standard 5uantity of direct materials for actual out)ut was less t&an t&e actual 5uantity of direct materials used. C) %&e actual 5uantity of direct materials used was less t&an t&e standard 5uantity for actual out)ut. D) %&e actual 5uantity of direct materials used was (reater t&an t&e standard 5uantity for +ud(eted out)ut. Answer: C Diff: LO: 11EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances.
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-0) A fa$ora+le direct materials )rice $ariance indicates w&ic& of t&e followin(< A) %&e actual cost of materials )urc&ased was (reater t&an t&e standard cost of materials )urc&ased. ") %&e standard cost of materials )urc&ased was less t&an t&e actual cost of materials )urc&ased. C) %&e actual 5uantity of materials used was less t&an t&e standard 5uantity of materials used for actual )roduction. D) %&e standard cost of materials )urc&ased was (reater t&an t&e actual cost of materials )urc&ased. Answer: D Diff: LO: 11EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. -!) %&e direct materials fle*i+le +ud(et $ariance can +e di$ided into two $ariancesJt&e A) )rice $ariance and t&e rate $ariance. ") )rice $ariance and t&e standard $ariance. C) )rice $ariance and t&e 5uantity $ariance. D) 5uantity $ariance and t&e efficiency $ariance. Answer: C Diff: 1 LO: 11EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. -/) A fa$ora+le direct materials )rice $ariance and an unfa$ora+le direct materials 5uantity $ariance mi(&t indicate w&ic& of t&e followin(< A) Less e*)ensi$e. inferior materials re5uirin( less t&an t&e standard amount were used in )roduction. ") Less e*)ensi$e. inferior materials re5uirin( more t&an t&e standard amount were used in )roduction. C) Hore e*)ensi$e. su)erior materials re5uirin( more t&an t&e standard amount were used in )roduction. D) Hore e*)ensi$e. su)erior materials re5uirin( less t&an t&e standard amount were used in )roduction. Answer: " Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances.
-6) %&e 99999999 Kmeasures &ow well t&e +usiness 'ee)s unit )rices of direct materials wit&in standards.K A) )roduction $olume $ariance ") o$er&ead fle*i+le +ud(et $ariance C) )rice $ariance D) 5uantity $ariance Answer: C Diff: 1 LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. -7) %&e 99999999 Kmeasures w&et&er t&e 5uantity of direct materials used to ma'e t&e actual num+er of out)uts is wit&in t&e standard allowed for t&at num+er of out)uts.K A) )roduction $olume $ariance ") o$er&ead fle*i+le +ud(et $ariance C) )rice $ariance D) 5uantity $ariance Answer: D Diff: 1 LO: 11EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. -:) %&e 99999999 Ks&ows &ow well mana(ement &as controlled o$er&ead costs.K A) o$er&ead fle*i+le +ud(et $ariance ") )roduction $olume $ariance C) 5uantity $ariance D) )rice $ariance Answer: A Diff: 1 LO: 11EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances.
02) Lac'son Industries &as collected t&e followin( data for one of its )roducts: Direct materials standard 8/ )ounds )er unit M C2.!!>l+.) Direct materials fle*i+le +ud(et $ariance-unfa$ora+le Actual direct materials used Actual finis&ed (oods )roduced C-.-2 )er finis&ed (ood C1 .222 -!.222 )ounds /.222 units
;&at is t&e total actual cost of t&e direct materials used< A) C1:. !2 ") C6-.722 C) C:6.722 D) C7!.722 Answer: C E*)lanation: C) /.222 units E C-.-2 )er unit B C7!.722 HatGl +ud(et $ariance 1 .222 %otal C:6.722 Diff: LO: 11EOC: E11-1/ AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. 01) Lac'son Industries &as collected t&e followin( data for one of its )roducts: Direct materials standard 8/ )ounds )er unit M C2.!!>l+.) Direct materials fle*i+le +ud(et $ariance-unfa$ora+le Actual direct materials used Actual finis&ed (oods )roduced C-.-2 )er finis&ed (ood C1 .222 -!.222 )ounds /.222 units
;&at is t&e actual cost of t&e direct materials used )er )ound< A) C .6: ") C .0! C) C .11 D) C2.!! Answer: A E*)lanation: A) /.222 units E C-.-2 )er unit B C7!.722 HatGl +ud(et $ariance 1 .222 %otal C:6.722 > -!.222 l+s used B C .6: )er l+ Diff: LO: 11EOC: E11-1/ AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. 0 ) Lac'son Industries &as collected t&e followin( data for one of its )roducts: Direct materials standard 8/ )ounds )er unit M C2.!!>l+.) Direct materials fle*i+le +ud(et $ariance-unfa$ora+le C-.-2 )er finis&ed (ood C1 .222
Actual direct materials used Actual finis&ed (oods )roduced
-!.222 )ounds /.222 units
4ow muc& is t&e direct materials 5uantity $ariance< A) C67.!!2 fa$ora+le ") C 6.:02 unfa$ora+le C) C//.!!2 fa$ora+le D) C67.!!2 unfa$ora+le Answer: C E*)lanation: C) HatGl 5uantity $ar B 8Actual 5uantity - 8Std =uantity E actual units)) E Std )rice C//.!!2 fa$ B 8-!.222 - 8/ E /.222 )) E .C2.!! Diff: LO: 11EOC: E11-1/ AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. 0-) Lac'son Industries &as collected t&e followin( data for one of its )roducts: Direct materials standard 8/ )ounds )er unit M C2.!!>l+.) Actual direct materials )urc&ased Actual direct materials used Actual )rice )aid )er )ound C-.-2 )er finis&ed (ood C-7.222 )ounds -!.222 )ounds C2./2
4ow muc& is t&e direct materials )rice $ariance< A) C1.6!2 fa$ora+le ") C1.6!2 unfa$ora+le C) C1.:22 fa$ora+le D) C1.:22 unfa$ora+le Answer: D E*)lanation: D) 8C2./2 - 2.!!) E -7.222 B 1.:22 unfa$ora+le Diff: LO: 11EOC: E11-1/ AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances.
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00) 4us&o$d Iron ;or's &as collected t&e followin( data for its %&under+olt line of )roducts: Direct materials standard Direct materials standard cost Actual direct materials used Actual finis&ed (oods )urc&ased 12 )ounds )er unit C2.6! )er )ound 02.222 )ounds 0.!22 units
;&at is t&e direct materials 5uantity $ariance< A) C-.6!2 unfa$ora+le ") C-.6!2 fa$ora+le C) C/.6!2 unfa$ora+le D) C/.6!2 fa$ora+le Answer: " E*)lanation: ") DH =uantity Nariance B 8Actual 5uantity - 8Std 5uantity E actual units)) E Std )rice C-.6!2 fa$ B 802.222 - 812 E 0.!22 )) E C2.6! Diff: LO: 11EOC: E11-1/ AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. 0!) 4us&o$d Iron ;or's &as collected t&e followin( data for its %&under+olt line of )roducts: Direct materials standard Direct materials standard cost Actual material )urc&ased cost Actual direct materials )urc&ased Actual 5uantity of direct materials used Actual finis&ed (oods )roduced 12 )ounds )er unit C2.6! )er )ound C2.7! )er )ound 02.222 )ounds -!.222 )ounds 0.!22 units
;&at is t&e direct material )rice $ariance< A) C0.222 fa$ora+le ") C0.222 unfa$ora+le C) C-.!22 fa$ora+le D) C-.!22 unfa$ora+le Answer: " E*)lanation: ") HatGl )rice $ar. B 8Actual )rice )er unit-Std )rice )er unit) E Actual 5uantity 3urc&ased C0.222 , B 8C.7! - C2.6!) E 02.222 )ounds Diff: LO: 11EOC: E11-1/ AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances.
0/) %&e actual cost of direct materials is C!2. ! )er )ound. %&e standard cost )er )ound is C!/.22. Durin( t&e current )eriod. /.722 )ounds were used in )roduction. %&e standard 5uantity for actual units )roduced is /.!22 )ounds. 4ow muc& is t&e direct materials )rice $ariance< A) C-6.-6! fa$ora+le ") C-6.-6! unfa$ora+le C) C-:.122 fa$ora+le D) C-:.122 unfa$ora+le Answer: C E*)lanation: C) Actual direct material cost )er )ound C!2. ! Standard direct material cost )er )ound C!/.22 Difference +etween actual and standard cost )er )ound C!.6! Actual direct material 5uantity /.722 Direct material )rice $ariance C-:.122 If actual direct material cost )er )ound is less t&an standard direct material cost )er )ound. t&en fa$ora+le. else unfa$ora+le Fa$ora+le Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 06) %&e actual cost of direct materials is C12.!2 )er )ound. %&e standard cost )er )ound is C12. !. Durin( t&e current )eriod. :.122 )ounds of direct materials were used in )roduction and 16.!22 )ounds were )urc&ased. %&e standard 5uantity of direct materials for actual units )roduced is 16.-22 )ounds. 4ow muc& is t&e direct materials 5uantity $ariance< A) C70.2!2 fa$ora+le ") C70.2!2 unfa$ora+le C) C7/.122 unfa$ora+le D) C7/.122 fa$ora+le Answer: A E*)lanation: A) HatGl 5uantity $ar B 8Actual 5uantity - Std 5uantity allowed) E Std )rice C70.2!2 F B 8:.122 - 16.-22) E C12. ! Diff: LO: 11EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
1! Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
07) Farrar Industries re)orted t&e followin( results from its most recent 5uarter: Actual direct material used Actual direct material cost )er )ound Standard direct material cost )er )ound Standard direct material 5uantity Direct material )urc&ases 1!.6!2 C!.!2 C!.6! 1!. !2 2.222
;&at is FarrarGs direct material 5uantity $ariance< A) C .6!2 fa$ora+le ") C .6!2 unfa$ora+le C) C .76! unfa$ora+le D) C .76! fa$ora+le Answer: C E*)lanation: C) HatGl 5uantity $ar B 8Actual 5uantity used - Std 5uantity allowed) E Std )rice C .76! , B 81!.6!2 - 1!. !2) E C!.6! Diff: LO: 11EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 0:) Dorsey Cor)oration Com)any +ud(eted /22 )ounds of direct materials costin( C 7.22 )er )ound to ma'e 6.222 units of )roduct. %&e com)any actually used /-2 )ounds of direct materials costin( C-2.22 )er )ound to ma'e t&e 6.222 units. ;&at is t&e direct materials 5uantity $ariance< A) C:22 fa$ora+le ") C702 fa$ora+le C) C:22 unfa$ora+le D) C702 unfa$ora+le Answer: D E*)lanation: D) HatGl 5uantity $ar B 8Actual 5uantity - Std =uantity) E Std )rice C702 , B 8/-2 - /22) E C 7 Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
1/ Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
!2) %&e Sout&side Cor)oration +ud(eted 0.022 )ounds of direct materials to ma'e ./22 units of )roduct. %&e com)any actually used 0.722 )ounds of direct materials to ma'e t&e ./22 units. %&e direct materials 5uantity $ariance is C1.!22 unfa$ora+le. ;&at is t&e standard )rice )er )ound of direct materials< A) C2.!: ") C . C) C/.-! D) C-.6! Answer: D E*)lanation: D) HatGl 5uantity $ar B 8Actual 5uantity used - Std 5uantity allowed) E Std )rice C1!22 B 80.722 - 0.022 ) E Std )rice Std )rice B 1!22 > 022 B C-.6! Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. !1) Hyles Com)any +ud(eted 12.!22 )ounds of direct materials costin( C -.!2 )er )ound to ma'e !.-22 units of )roduct. %&e com)any actually )urc&ased 11.222 )ounds of direct materials costin( C !.22 )er )ound to ma'e t&e !.-22 units. ;&at is t&e direct materials )rice $ariance< A) C1/.!22 fa$ora+le ") C1/.!22 unfa$ora+le C) C1!.6!2 unfa$ora+le D) C1!.6!2 fa$ora+le Answer: " E*)lanation: ") HatGl )rice $ar. B 8Actual )rice )er unit - Std )rice )er unit) E Actual 5uantity 3urc&ased C1/.!22 , B 8C ! - -.!2) E 11.222 Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
! ) Hyles Com)any +ud(eted 12.!22 )ounds of direct materials costin( C -.!2 )er )ound to ma'e !.-22 units of )roduct. %&e com)any actually )urc&ased 11.222 )ounds of direct materials costin( C !.22 )er )ound to ma'e t&e !.-22 units. ;&at is t&e direct materials 5uantity $ariance< A) C1 .!22 fa$ora+le ") C11.6!2 fa$ora+le C) C11.6!2 unfa$ora+le D) C1 .!22 unfa$ora+le Answer: C E*)lanation: C) HatGl 5uantity $ar B 8Actual 5uantity - Standard =uantity Allowed) E Std )rice C11.6!2 , B 811.222 - 12.!22) E -.!2 Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances !-) %&e Armstron( Cor)oration de$elo)ed a fle*i+le +ud(et for its )roduction )rocess. Armstron( +ud(eted to use 1/.222 )ounds of direct material wit& a standard cost of C17 )er )ound to )roduce 1 .222 units of finis&ed )roduct. Armstron( actually )urc&ased 17.222 )ounds and used 16.222 )ounds of direct material wit& a cost of C 1 )er )ound to )roduce 1 .222 units of finis&ed )roduct. Oi$en t&ese results. w&at is Armstron(Gs direct material )rice $ariance< A) C07.222 fa$ora+le ") C07.222 unfa$ora+le C) C!0.222 unfa$ora+le D) C!0.222 fa$ora+le Answer: C E*)lanation: C) HatGl )rice $ar. B 8Actual )rice )er unit - Std )rice )er unit) E Actual 5uantity )urc&ased C!0.222 , B 8C 1 - 17) E 17.222 Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
!0) %&e Armstron( Cor)oration de$elo)ed a fle*i+le +ud(et for its )roduction )rocess. Armstron( +ud(eted to use 1/.222 )ounds of direct material wit& a standard cost of C17 )er )ound to )roduce 1 .222 units of finis&ed )roduct. Armstron( actually )urc&ased 17.222 )ounds and used 16.222 )ounds of direct material wit& a cost of C 1 )er )ound to )roduce 1 .222 units of finis&ed )roduct. Oi$en t&ese results. w&at is Armstron(Gs direct material 5uantity $ariance< A) C-/.222 fa$ora+le ") C17.222 fa$ora+le C) C-/.222 unfa$ora+le D) C17.222 unfa$ora+le Answer: D E*)lanation: D) HatGl 5uantity $ar B 8Actual 5uantity used - Std 5uantity allowed) E Std )rice C17.222 , B 816.222 - 1/.222) E 17.22 Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances !!) Acti$e Lifestyle "e$era(es (at&ered t&e followin( information for Lo+ P: 7: Standard %otal Cost Direct materials: Standard: . 22 )ints at C0.6!>)int Actual: .0!2 )ints at C!.22>)int C12.0!2 C1 . !2 Actual %otal Cost
;&at is t&e direct materials )rice $ariance< A) C/1 .!2 fa$ora+le ") C/1 .!2 unfa$ora+le C) C!!2.22 fa$ora+le D) C!!2.22 unfa$ora+le Answer: " E*)lanation: ") HatGl )rice $ar. B 8Actual )rice )er unit - Std )rice )er unit) E Actual 5uantity 3urc&ased C/1 .!2 , B 8C!.22 - C0.6!) E .0!2 Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
1: Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
!/) Acti$e Lifestyle "e$era(es (at&ered t&e followin( information for Lo+ P: 7: Standard %otal Cost Direct materials: Standard: . 22 )ints at C0.6!>)int Actual: .0!2 )ints at C!.22>)int C12.0!2 C1 . !2 Actual %otal Cost
;&at is t&e direct materials 5uantity $ariance< A) C1. !2.22 fa$ora+le ") C1. !2.22 unfa$ora+le C) C1.176.!2 unfa$ora+le D) C1.176.!2 fa$ora+le Answer: C E*)lanation: C) HatGl 5uantity $ar B 8Actual 5uantity used - Std 5uantity allowed) E Std )rice C 1.176.!2 , B 8 .0!2 - . 22) E C0.6! Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances !6) #aQQle "a'in( Com)any (at&ered t&e followin( actual results for t&e current mont&: Actual amounts: ,nits )roduced Direct materials )urc&ased and used 86.!22 l+s.) "ud(eted )roduction and standard costs were: "ud(eted )roduction Direct materials !.222 units 1.! l+s.>unit at C->l+. !.!22 C !.222
;&at is t&e direct materials )rice $ariance< A) C .!22 unfa$ora+le ") C .!22 fa$ora+le C) C .6!2 fa$ora+le D) C .6!2 unfa$ora+le Answer: A E*)lanation: A) HatGl )rice $ar. B 8Actual )rice )er unit - Std )rice )er unit) E Actual 5uantity C .!22 , B 8RC !.222 > 6.!22S - -) E 6.!22 Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
!7) #aQQle "a'in( Com)any (at&ered t&e followin( actual results for t&e current mont&: Actual amounts: ,nits )roduced Direct materials )urc&ased and used 86.!22 l+s.) "ud(eted )roduction and standard costs were: "ud(eted )roduction Direct materials ;&at is t&e direct materials 5uantity $ariance< A) C .!22 unfa$ora+le ") C . !2 unfa$ora+le C) C .!22 fa$ora+le D) C . !2 fa$ora+le Answer: D E*)lanation: D) Actual units )roduced Standard direct material )er finis&ed (ood 8)ounds) %otal standard direct material 3ounds of direct material )urc&ased and used Difference +etween actual and standard 5uantity Standard direct material cost )er )ound Direct material 5uantity $ariance If actual direct materials used is less t&an t&e standard direct materials used. t&en fa$ora+le. else unfa$ora+le !.222 units 1.! l+s.>unit at C->l+. !.!22 C !.222
!.!22 1.! 7. !2 6.!22 6!2 C-.22 C . !2 Fa$ora+le
Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
!:) DoQen "a'ery ma'es cu)ca'es and coo'ies. DoQen (at&ered t&e followin( information for t&e current year re(ardin( its use of flour and +utter 8flour is a direct material for cu)ca'es and +utter is a direct material for coo'ies): Flour 8Direct Haterials) Cu)ca'es l+s. C .!2>l+ < C-.22>l+. C-22 , C!22 F < -!2 "utter 8Direct Haterials) Coo'ies - l+s. < 0 l+s. C!.!2>l+. C!22 F < C .022 F 022
Standard 5uantity )er +atc& Standard )rice )er )ound of su(ar Actual 5uantity )urc&ased and used )er +atc& 8)ounds) Actual )rice )aid 3rice $ariance =uantity $ariance Fle*i+le +ud(et $ariance Ium+er of units )roduced
%&e actual direct material 5uantity used )er +atc& for Cu)ca'es would +e closest to A) .: l+. ") 1.6 l+s. C) .2 l+s. D) 2.0 l+s. Answer: " E*)lanation: ") 3rice $ariance C-22 Actual )rice )aid for material Standard )rice )er )ound Difference +etween actual and standard )rice )er )ound C-.22 C .!2 C2.!2
Actual total 5uantity of direct material 8$ariance>difference +etween actual and standard )rice )er )ound) /22 Ium+er of units )roduced -!2 Actual 5uantity of direct material )er unit 1.6 Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
/2) DoQen "a'ery ma'es cu)ca'es and coo'ies. DoQen (at&ered t&e followin( information for t&e current year re(ardin( its use of flour and +utter 8flour is a direct material for cu)ca'es and +utter is a direct material for coo'ies): Flour 8Direct Haterials) Cu)ca'es l+s. C .!2>l+ < C-.22>l+. C-22 , C!22 F < -!2 "utter 8Direct Haterials) Coo'ies - l+s. < 0 l+s. C!.!2>l+. C!22 F < C .022 F 022
;&at is t&e direct materials fle*i+le +ud(et $ariance for t&e flour in cu)ca'es< A) C 22 fa$ora+le ") C722 unfa$ora+le C) C722 fa$ora+le D) C 22 unfa$ora+le Answer: A E*)lanation: A) 3rice $ariance C-22 ,nfa$ora+le =uantity $ariance Fa$ora+le
Direct material fle*i+le +ud(et $ariance F Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
/1) DoQen "a'ery ma'es cu)ca'es and coo'ies. DoQen (at&ered t&e followin( information for t&e current year re(ardin( its use of flour and +utter 8flour is a direct material for cu)ca'es and +utter is a direct material for coo'ies): Flour 8Direct Haterials) Cu)ca'es l+s. C .!2>l+ < C-.22>l+. C-22 , C!22 F < -!2 "utter 8Direct Haterials) Coo'ies - l+s. < 0 l+s. C!.!2>l+. C!22 F < C .022 F 022
;&at is t&e standard direct material )rice )er )ound for t&e +utter in t&e coo'ies< A) C6. !>l+. ") C/.22>l+. C) C!.!2>l+. D) C0.6!>l+. Answer: D E*)lanation: D) 3rice $ariance C!22 Fle*i+le +ud(et $ariance C .022 =uantity $ariance 8If +ot& )rice $ariance and fle*i+le +ud(et $ariance are fa$ora+le. t&en ta'e t&e differenceF if +ot& are unfa$ora+le. ta'e t&e differenceF if one is fa$ora+le and one is unfa$ora+le. t&en add) C1.:22 Actual 5uantity used )er unit 0 Ium+er of units )roduced 022 Actual 5uantity of direct material used 1./22 Standard )ounds )er unit Ium+er of units )roduced 022 Standard 5uantity of direct material allowed 1. 22 =uantity $ariance C1.:22 Difference +etween standard 5uantity and actual 5uantity 022 Standard )rice )er )ound C0.6!
Fa$ora+le Fa$ora+le
Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances / ) DoQen "a'ery ma'es cu)ca'es and coo'ies. DoQen (at&ered t&e followin( information for t&e current year re(ardin( its use of flour and +utter 8flour is a direct material for cu)ca'es and +utter is a direct material for coo'ies): Flour 8Direct Haterials) "utter 8Direct Haterials)
Cu)ca'es l+s. C .!2>l+ < C-.22>l+. C-22 , C!22 F < -!2
Coo'ies - l+s. < 0 l+s. C!.!2>l+. C!22 F < C .022 F 022
;&at is t&e direct material 5uantity $ariance for +utter in t&e coo'ies< A) C .:22 fa$ora+le ") C1.:22 fa$ora+le C) C .:22 unfa$ora+le D) C1.:22 unfa$ora+le Answer: " E*)lanation: ") 3rice $ariance Fle*i+le +ud(et $ariance =uantity $ariance 8If +ot& )rice $ariance and fle*i+le +ud(et $ariance are fa$ora+le. t&en ta'e t&e differenceF if +ot& are unfa$ora+le. ta'e t&e differenceF if one is fa$ora+le and one is unfa$ora+le. t&en add) C!22 C .022 Fa$ora+le Fa$ora+le
C1.:22 F
/-) %ommyGs %oys )roduces two ty)es of toys: trains and dolls. %ommyGs uses stainless steel to manufacture t&e trains and )lastic to manufacture t&e dolls. Information re(ardin( t&e usa(e of steel and )lastic for t&e )ast year follows: 3roduct Iames Direct materials information Standard )ounds )er unit Standard )rice )er )ound Actual 5uantity used )er unit Actual )rice )aid for material Actual 5uantity )urc&ased and used 3rice $ariance =uantity $ariance Fle*i+le +ud(ent $ariance Ium+er of units )roduced Steel 1 l+. C1.!2 1.! l+s. C1. ! .!22 l+s. < C 2/ , < 6! 3lastic 2.! l+. < 2.6! l+s. C .22 1. 22 l+s. C:22 F < C! F !!2
;&at is t&e )rice $ariance for steel used to manufacture t&e trains< A) C/ ! fa$ora+le ") C12- fa$ora+le C) C/ ! unfa$ora+le D) C12- unfa$ora+le Answer: A E*)lanation: A) DH 3rice Nariance B 8standard )rice - actual )rice) E actual amount )urc&ased C/ ! F B 8C1.!2 - C1. !) E .!22 Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
/ Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
/0) %ommyGs %oys )roduces two ty)es of toys: trains and dolls. %ommyGs uses stainless steel to manufacture t&e trains and )lastic to manufacture t&e dolls. Information re(ardin( t&e usa(e of steel and )lastic for t&e )ast year follows: 3roduct Iames Direct materials information Standard )ounds )er unit Standard )rice )er )ound Actual 5uantity used )er unit Actual )rice )aid for material Actual 5uantity )urc&ased and used 3rice $ariance =uantity $ariance Fle*i+le +ud(ent $ariance Ium+er of units )roduced Steel 1 l+. C1.!2 1.! l+s. C1. ! .!22 l+s. < C 2/ , < 6! 3lastic 2.! l+. < 2.6! l+s. C .22 1. 22 l+s. C:22 F < C! F !!2
;&at is t&e direct materials fle*i+le +ud(et $ariance for steel used to manufacture t&e trains< A) C01: unfa$ora+le ") C01: fa$ora+le C) C7-1 unfa$ora+le D) C7-1 fa$ora+le Answer: " E*)lanation: ") DH 3rice Nariance B 8standard )rice - actual )rice) E actual amount )urc&ased C/ ! F B 8C1.!2 - C1. !) E .!22 3rice $ariance C/ ! =uantity $ariance C 2/ Direct material fle*i+le +ud(et $ariance 8If +ot& $ariances are fa$ora+le. add t&emF if +ot& $ariances are unfa$ora+le. add t&emF if one $ariance is fa$ora+le and t&e ot&er is unfa$ora+le. ta'e t&e difference) C01: Fa$ora+le ,nfa$ora+le
/!) %ommyGs %oys )roduces two ty)es of toys: trains and dolls. %ommyGs uses stainless steel to manufacture t&e trains and )lastic to manufacture t&e dolls. Information re(ardin( t&e usa(e of steel and )lastic for t&e )ast year follows: 3roduct Iames Direct materials information Standard )ounds )er unit Standard )rice )er )ound Actual 5uantity used )er unit Actual )rice )aid for material Actual 5uantity )urc&ased and used 3rice $ariance =uantity $ariance Fle*i+le +ud(ent $ariance Ium+er of units )roduced Steel 1 l+. C1.!2 1.! l+s. C1. ! .!22 l+s. < C 2/ , < 6! 3lastic 2.! l+. < 2.6! l+s. C .22 1. 22 l+s. C:22 F < C! F !!2
;&at is t&e standard direct material )rice )er )ound for t&e )lastic in t&e dolls< A) C .6!>l+. ") C0.17>l+. C) C!. 6>l+. D) C .00>l+. Answer: A E*)lanation: A) 3rice Nariance B 8Standard 3rice - Actual 3rice) E Actual =uantity 3urc&ased :22 B 8 .6! - .22) E 1. 22 Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
//) %ommyGs %oys )roduces two ty)es of toys: trains and dolls. %ommyGs uses stainless steel to manufacture t&e trains and )lastic to manufacture t&e dolls. Information re(ardin( t&e usa(e of steel and )lastic for t&e )ast year follows: 3roduct Iames Direct materials information Standard )ounds )er unit Standard )rice )er )ound Actual 5uantity used )er unit Actual )rice )aid for material Actual 5uantity )urc&ased and used 3rice $ariance =uantity $ariance Fle*i+le +ud(ent $ariance Ium+er of units )roduced Steel 1 l+. C1.!2 1.! l+s. C1. ! .!22 l+s. < C 2/ , < 6! 3lastic 2.! l+. < 2.6! l+s. C .22 1. 22 l+s. C:22 F < C! F !!2
;&at is t&e direct material 5uantity $ariance for )lastic in t&e dolls< A) C-67 fa$ora+le ") C1.0 fa$ora+le C) C-67 unfa$ora+le D) C1.0 unfa$ora+le Answer: C E*)lanation: C) Fle*i+le "ud(et Nariance B 3rice Nariance A =uantity Nariance C! F B C:22 F A C-67 , ! B :22 - -67 Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
: Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
/6) S&erwin C&emicals )roduces commercial stren(t& cleansin( su))lies. %wo of its main )roducts are window cleanser t&at uses ammonia. and floor cleanser t&at uses +leac&. Information for t&e most recent )eriod follows: ;indow Cleaner 8ammonia) 1/ oQ. C2.6! 2 oQ. C1.22 1.!22 oQ. < C1.!22 , < !22 Floor Cleaner 8+leac&) 0 oQ. < oQ. C2.:2 .722 oQ.. C-22 , < C/67 F /22
3roduct Iames Direct materials information Standard ounces )er unit Standard )rice )er ounce Actual 5uantity used )er unit Actual )rice )aid for material Actual 5uantity )urc&ased and used 3rice $ariance =uantity $ariance Fle*i+le +ud(ent $ariance Ium+er of units )roduced
;&at is t&e direct materials )rice $ariance for ammonia< A) C .!22 fa$ora+le ") C .!22 unfa$ora+le C) C-6! fa$ora+le D) C-6! unfa$ora+le Answer: D E*)lanation: D) DH 3rice Nariance B 8standard )rice - actual )rice) E actual amount )urc&ased C-6! , B 8C.6! - C1) E 1.!22 Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
-2 Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
/7) S&erwin C&emicals )roduces commercial stren(t& cleansin( su))lies. %wo of its main )roducts are window cleanser t&at uses ammonia. and floor cleanser t&at uses +leac&. Information for t&e most recent )eriod follows: ;indow Cleaner 8ammonia) 1/ oQ. C2.6! 2 oQ. C1.22 1.!22 oQ. < C1.!22 , < !22 Floor Cleaner 8+leac&) 0 oQ. < oQ. C2.:2 .722 oQ.. C-22 , < C/67 F /22
;&at is t&e direct materials fle*i+le +ud(et $ariance for ammonia< A) C1.1 ! unfa$ora+le ") C1.76! unfa$ora+le C) C1.1 ! fa$ora+le D) C1.76! fa$ora+le Answer: " E*)lanation: ") DH 3rice Nariance B 8standard )rice - actual )rice) E actual amount )urc&ased C-6! , B 8C.6! - C1) E 1.!22 3rice $ariance C-6! =uantity $ariance C1.!22 Direct material fle*i+le +ud(et $ariance 8If +ot& $ariances are fa$ora+le. add t&emF if +ot& $ariances are unfa$ora+le. add t&emF if one $ariance is fa$ora+le and t&e ot&er is unfa$ora+le. ta'e t&e difference) C1.76! unfa$ora+le ,nfa$ora+le
/:) S&erwin C&emicals )roduces commercial stren(t& cleansin( su))lies. %wo of its main )roducts are window cleanser t&at uses ammonia. and floor cleanser t&at uses +leac&. Information for t&e most recent )eriod follows: ;indow Cleaner 8ammonia) 1/ oQ. C2.6! 2 oQ. C1.22 1.!22 oQ. < C1.!22 , < !22 Floor Cleaner 8+leac&) 0 oQ. < oQ. C2.:2 .722 oQ.. C-22 , < C/67 F /22
;&at is t&e standard )rice for +leac&< A) C2.6:>oQ. ") C2.77>oQ. C) C2.: >oQ. D) C1.10>oQ. Answer: A E*)lanation: A) 3rice Nariance B 8Standard 3rice - Actual 3rice) E Actual =uantity 3urc&ased - -22 B 8.6: - .:) E .722 Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances.
62) S&erwin C&emicals )roduces commercial stren(t& cleansin( su))lies. %wo of its main )roducts are window cleanser t&at uses ammonia. and floor cleanser t&at uses +leac&. Information for t&e most recent )eriod follows: ;indow Cleaner 8ammonia) 1/ oQ. C2.6! 2 oQ. C1.22 1.!22 oQ. < C1.!22 , < !22 Floor Cleaner 8+leac&) 0 oQ. < oQ. C2.:2 .722 oQ.. C-22 , < C/67 F /22
;&at is t&e direct material 5uantity $ariance for t&e +leac&< A) C-67 fa$ora+le ") C-67 unfa$ora+le C) C:67 fa$ora+le D) C:67 unfa$ora+le Answer: C E*)lanation: C) 3rice $ariance C-22 Fle*i+le +ud(et $ariance C/67 =uantity $ariance 8If +ot& )rice $ariance and fle*i+le +ud(et $ariance are fa$ora+le. t&en ta'e t&e differenceF if +ot& are unfa$ora+le. ta'e t&e differenceF if one is fa$ora+le and one is unfa$ora+le. t&en add) C:67
,nfa$ora+le Fa$ora+le
fa$ora+le
-Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
61) 3u(et Com)any &as (at&ered t&e followin( information a+out its )urc&ase and use of raw materials for Decem+er: Standard )rice )er )ound of raw material Actual )urc&ase )rice )er )ound of raw material Standard 5uantity allowed for actual )roduction 8)ounds) Actual 5uantity of raw materials )urc&ased 8)ounds) C 1 .22 C 11.!2 1.222 1.1!2
3u(et Com)any uses a standard cost system. ;&at is t&e materials )rice $ariance< A) C !6! fa$ora+le ") C !6! unfa$ora+le C) C !22 fa$ora+le D) C !22 unfa$ora+le Answer: A E*)lanation: A) Actual )urc&ase )rice )er )ound of raw material C11.!2 Standard )rice )er )ound of raw material C81 .22) Difference +etween actual and standard )rice )er )ound C82.!2) Actual 5uantity of raw materials )urc&ased 8)ounds) 1.1!2 Haterials )urc&ase )rice $ariance C8!6!.22) Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 6 ) Culinary ?itc&en Su))ly )roduces +am+oo cuttin( +oards. %&e standard material cost for t&e +am+oo used in eac& lam) is C17 )er s5uare foot. Eac& +oard re5uires - s5uare feet of +am+oo. In Au(ust. t&e com)any )roduced 1. 22 cuttin( +oards. %&ere were -.022 s5uare feet of +am+oo used durin( t&e mont&. %&e +am+oo used &ad an actual cost C 2 )er s5uare foot. ;&at was t&e materials 5uantity $ariance in Au(ust for +am+oo< A) C-./22 fa$ora+le ") C-./22 unfa$ora+le C) C0.222 fa$ora+le D) C0.222 unfa$ora+le Answer: A E*)lanation: A) HatGl 5uantity $ar B 8Actual 5uantity - 8Std 5uantity E actual units)) E Std )rice C-./22 F B 8-.022 - 81. 22 E -)) E C17 Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
6-) ?a&n 3erformance Iutrition )roduces a )rotein s&a'e w&ic& contains w&ey )rotein as one of its in(redients. %&e w&ey )rotein 8materials) standards for eac& +atc& of )rotein s&a'e )roduced are 1 )ounds of w&ey )rotein at a standard cost of C-.22 )er )ound. Durin( Luly. ?a&n 3erformance Iutrition )urc&ased and used !0.222 )ounds of w&ey )rotein at a total of C162.222 to ma'e a total of 0.-22 +atc&es of )rotein s&a'e. ;&at is t&e materials 5uantity $ariance for w&ey )rotein in Luly< A) C6. 22 unfa$ora+le ") C6. 22 fa$ora+le C) C101.:22 fa$ora+le D) C101.:22 unfa$ora+le Answer: A E*)lanation: A) HatGl 5uantity $ar B 8Actual 5uantity - 8Std 5uantity E actual units)) E Std )rice C6. 22 , B 8!0.222 - 81 E C 0.-22)) E CDiff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 60) Sole 3ur)ose manufactures +eac& s&oes t&at use a can$as as t&e main raw material. Data related to t&e s&oes for Lune follows: Standard 5uantity )er unit of out)ut 8yards) Standard )rice )er yard Actual materials )urc&ased in yards Actual cost of materials )urc&ased Actual materials used in )roduction 8yards) Actual out)uts in units 0.! C12.!2 1/.!22 C:2.0!2 1/.222 -./22
;&at is t&e materials 5uantity $ariance for can$as for Lune< A) C1./0! fa$ora+le ") C .122 fa$ora+le C) C1./0! unfa$ora+le D) C .122 unfa$ora+le Answer: " E*)lanation: ") HatGl 5uantity $ar B 8Actual 5uantity - 8Std 5uantity E actual units)) E Std )rice C .122 F B 81/.222 - 80.! E -./22)) E C12.!2 Diff: LO: 11EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
-! Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
6!) #Qe)'a Cor)oration manufactures @eweled cell )&one cases. %&e followin( materials standards &a$e +een esta+lis&ed for t&e @ewels used to decorate t&e cell )&one cases. Standard 5uantity )er case 8(rams) Standard )rice )er (ram of @ewels -.! C -.22
%&e followin( data relates to t&e )roduction of t&e cell )&one cases durin( Lune: Actual @ewels )urc&ased and used 8(rams) Actual cost of @ewels )urc&ased Actual num+er of cases )roduced 1.022 C 0.122 !22
;&at is t&e materials )rice $ariance for @ewels in Lune< A) C122 fa$ora+le ") C122 unfa$ora+le C) C0. 22 fa$ora+le D) C0. 22 unfa$ora+le Answer: A E*)lanation: A) HatGl )rice $ar. B 8Actual )rice )er unit - Std )rice )er unit) E Actual 5uantity C122 F B 8R0.122 > 1.022S - C-.22) E 1.022 Diff: LO: 11EOC: E11- : AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
-/ Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
6/) An LCD screen is )urc&ased to +e used in t&e manufacturin( of a di(ital watc&. %&e standard )rice for t&e LCD screen used is C02.22. Durin( t&e mont& of Fe+ruary. -.022 screens were )urc&ased and used. %&e materials )rice $ariance was C/.222 unfa$ora+le. %&e standard num+er of screens allowed for t&e actual num+er of watc&es manufactured durin( t&e )eriod was !.222 screens. %&e actual )urc&ase )rice of eac& LCD screen would +e closest to A) C-:.6/ )er LCD screen. ") C02. 0 )er LCD screen. C) C-7. 0 )er LCD screen. D) C01.6/ )er LCD screen. Answer: D E*)lanation: D) Haterials )rice $arianceJunfa$ora+le C/.222 Di$ide +y Di$ide +y Actual 5uantity )urc&ased. in units -.022 C1.6/ Standard )rice. )er unit C02.22 Actual )rice. )er unit C01.6/ Diff: LO: 11EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
66) Hadden Cor)oration manufactures t-s&irts. w&ic& is its only )roduct. %&e standards for t-s&irts are as follows: Standard direct materials cost )er yard Standard direct materials 5uantity )er t-s&irt 8yards) C7 1.!
Durin( t&e mont& of Hay. t&e com)any )roduced 1. !2 t-s&irts. #elated )roduction data for t&e mont& follows: Actual yards of direct material )urc&ased Actual direct materials total cost ;&at is t&e direct materials )rice $ariance for t&e mont&< A) C0.-22 unfa$ora+le ") C0.-22 fa$ora+le C) C-.722 fa$ora+le D) C-.722 unfa$ora+le Answer: A E*)lanation: A) Actual yards of direct material )urc&ased 1.022 Standard direct materials cost )er yard C7 Standard direct materials total cost C11. 22 Actual direct materials total cost Standard direct materials total cost Haterials )rice $ariance C1!.!22 C811. 22) C0.-22 1.022 C 1!.!22
unfa$ora+le
67) Hadden Cor)oration manufactures t-s&irts. w&ic& is its only )roduct. %&e standards for t-s&irts are as follows: Standard direct materials cost )er yard Standard direct materials 5uantity )er t-s&irt 8yards) C7 1.!
Durin( t&e mont& of Hay. t&e com)any )roduced 1. !2 t-s&irts. #elated )roduction data for t&e mont& follows: Actual yards of direct material )urc&ased Actual direct materials total cost ;&at is t&e direct materials 5uantity $ariance for t&e mont&< A) C 0.-22 fa$ora+le ") C 0.-22 unfa$ora+le C) C -.722 fa$ora+le D) C -.722 unfa$ora+le Answer: C E*)lanation: C) Standard direct materials 5uantity )er t-s&irt 8yards) 1.! Actual units )roduced 1. !2 Standard direct materials 5uantity. in yards 1.76! Actual direct materials used in )roduction 8yards) Standard direct materials 5uantity. in yards Difference +etween actual and standard 5uantity Standard direct materials cost )er yard Haterials 5uantity $ariance 1.022 81.76!) 806!) C7 C8-.722) 1.022 C 1!.!22
fa$ora+le
-: Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
6:) Hic&ael Cor)oration manufactures railroad cars. w&ic& is its only )roduct. %&e standards for t&e railroad cars are as follows: Standard tons of direct material 8steel) )er car Standard cost )er ton of steel 0 C 16.22
Durin( t&e mont& of Harc&. t&e com)any )roduced 1./!2 cars. #elated )roduction data for t&e mont& follows: Actual materials )urc&ased and used 8tons) Actual direct materials total cost ;&at is t&e direct materials )rice $ariance for t&e mont&< A) C 7!2 fa$ora+le ") C 7!2 unfa$ora+le C) C 1.:!2 fa$ora+le D) C 1.:!2 unfa$ora+le Answer: D E*)lanation: D) Actual materials )urc&ased and used 8tons) /./!2 Standard cost )er ton of steel C16.22 Standard materials cost C11-.2!2 Actual direct materials total cost Standard materials cost Haterial )rice $ariance C11!.222 C811-.2!2) C1.:!2 /./!2 C 11!.222
unfa$ora+le
72) Hic&ael Cor)oration manufactures railroad cars. w&ic& is its only )roduct. %&e standards for t&e railroad cars are as follows: Standard tons of direct material 8steel) )er car Standard cost )er ton of steel 0 C 16.22
Durin( t&e mont& of Harc&. t&e com)any )roduced 1./!2 cars. #elated )roduction data for t&e mont& follows: Actual materials )urc&ased and used 8tons) Actual direct materials total cost ;&at is t&e direct materials 5uantity $ariance for t&e mont&< A) C 7!2 fa$ora+le ") C 7!2 unfa$ora+le C) C 1.:!2 fa$ora+le D) C 1.:!2 unfa$ora+le Answer: " E*)lanation: ") Standard tons of direct material 8steel) )er container 0 Actual containers )roduced 1./!2 Standard materials 5uantity /./22 Actual materials )urc&ased and used 8tons) Standard materials 5uantity Difference +etween actual and standard 5uantity Standard cost )er ton of steel Haterial 5uantity $ariance /./!2 8/./22) !2 C16.22 C7!2 /./!2 C 11!.222
unfa$ora+le
71) On t&e line in front of eac& $ariance. enter t&e letters of t&e items needed to com)ute t&at $ariance. Tou will enter more t&an one item on eac& line. A. Actual )rice ". Actual 5uantity C. Standard )rice D. Standard 5uantity 999999 Direct materials )rice $ariance 999999 Direct materials 5uantity $ariance Answer: A. ". C Direct material )rice $ariance ". C. D Direct materials 5uantity $ariance Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
7 ) HcIa++ Cor)oration ma'es s&oe )olis&. %&e standard direct materials 5uantity is .! )ounds )er container at a cost of C . ! )er )ound. %&e actual usa(e for t&e )roduction of --.222 containers was .!! )ounds )er cus&ion at an actual cost of C . 2 )er )ound. Calculate t&e direct materials )rice $ariance and t&e direct materials 5uantity $ariance. Answer: Actual material )rice )er )ound C . 2 Standard material )rice )er )ound C . ! Difference +etween actual and standard )rice C2.2! Actual )roduction Actual material )ounds )er unit Actual 5uantity of materials Direct material )rice $ariance If actual )rice )er )ound is less t&an standard )rice )er )ound. t&en fa$ora+le. else unfa$ora+le Actual )roduction Actual material )ounds )er unit Actual 5uantity of materials Actual )roduction Standard material )ounds )er unit Standard 5uantity of materials Difference +etween standard 5uantity and actual 5uantity Standard material )rice )er )ound Direct material 5uantity $ariance If actual 5uantity is less t&an standard 5uantity. t&en fa$ora+le. else unfa$ora+le --.222 2.!! 17.1!2 C:26 Fa$ora+le --.222 2.!! 17.1!2 --.222 2.!2 1/.!22 1./!2 C . ! C-.61,nfa$ora+le
7-) Ayers Com)any re)orts t&e followin( standards for direct materials for t&e year: Standard cost )er )ound Standard amount )er finis&ed (ood C0.6! 7.! )ounds
Durin( t&e year. 0/2.222 finis&ed (oods were )roduced. %&e direct materials )rice $ariance was C10. 22 unfa$ora+le. %&e direct materials fle*i+le +ud(et $ariance was C:72 fa$ora+le. Calculate t&e followin( items re(ardin( direct materials for Ayers Com)any for t&e year: a. +. c. Direct materials 5uantity $ariance Standard 5uantity of direct materials for actual )roduction Actual )ounds of direct materials used for actual )roduction
Answer: part a. Direct material )rice $ariance - unfa$ora+le Direct material fle*i+le +ud(et $ariance - fa$ora+le Direct material 5uantity $ariance If t&e unfa$ora+le material )rice $ariance is lar(er t&an t&e fa$ora+le fle*i+le +ud(et $ariance. t&en t&e material 5uantity $ariance must +e fa$ora+le. part b. Standard amount of direct material )er finis&ed (ood Actual finis&ed (oods )roduced Standard 5uantity of direct material for actual )roduction part c. Direct material 5uantity $ariance 8enter as a ne(ati$e) Standard direct material cost )er )ound Nariance e*)ressed in )ounds Standard 5uantity of direct material for actual )roduction Actual )ounds of direct material incurred for actual )roduction
C10. 22 C:72 C1!.172 Fa$ora+le
7.!2 0/2.222 -.:12.222
C81!.172) C0.6! 8-.1:/) -.:12.222 -.:2/.720
Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances.
70) Hiller Hanufacturin( Cor)oration &as t&e followin( information re(ardin( direct materials: Actual )ounds of direct materials )urc&ased and used Standard 5uantity of direct materials Actual )roduction Direct materials 5uantity $ariance Direct materials )rice $ariance
06.222 .! )ounds )er finis&ed (ood 2.222 finis&ed (oods C11.!22 F C :.022 ,
Com)ute HillerGs standard )rice )er )ound and actual )rice )er )ound of direct materials. Answer: Direct material 5uantity $ariance C11.!22 Standard 5uantity of direct material )er (ood Actual )roduction Standard 5uantity of direct material Actual )ounds of direct material )urc&ased and used Difference +etween standard and actual Standard )rice )er )ound 85uantity $ariance > difference +etween standard and actual) .! 2.222 !2.222 06.222 -.222 C-.7-
Direct material )rice $ariance Actual )ounds of direct material )urc&ased and used 3rice $ariance on a )er )ound +asis 8)ositi$e if )rice $ariance is unfa$ora+le. ne(ati$e if t&e )rice $ariance is fa$ora+le) Actual )rice )er )ound 8standard )rice )er )ound A )rice $ariance on )er )ound +asis)
C:.022 06.222 C2. 2 C0.2-
Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances.
7!) %&e followin( direct materials $ariance com)utations are incom)lete. Fill in t&e missin( $alues. and identify t&e direct materials fle*i+le +ud(et $ariance as fa$ora+le or unfa$ora+le. Direct materials )rice $ariance B 8C< - C1 .!2) E 6.222 )ounds B C-.!22 , Direct materials 5uantity $ariance B 8< - /.622 )ounds) E C1 .!2 B < , Direct materials fle*i+le +ud(et $ariance B C< Answer: Direct material )rice $ariance C-.!22 Actual direct material 5uantity 6.222 3rice $ariance on a )er unit +asis 8)ositi$e for unfa$ora+le )rice $ariance. ne(ati$e for fa$ora+le )rice $ariance) C2.!2 Standard direct material )rice C1 .!2 Actual direct material )rice )er )ound C1-.22 Actual direct material 5uantity 6.222 Standard direct material 5uantity /.622 Difference +etween actual and standard -22 Standard direct material )rice C1 .!2 Direct material 5uantity $ariance C-.6!2 If actual direct material 5uantity is less t&an standard direct material 5uantity. t&en fa$ora+le. else unfa$ora+le ,nfa$ora+le Direct material )rice $ariance C-.!22 Direct material 5uantity $ariance C-.6!2 Direct material fle*i+le +ud(et $ariance 8if t&e )rice and 5uantity $ariances are +ot& fa$ora+le. add t&emF if +ot& are unfa$ora+le. add t&emF if one is fa$ora+le and t&e ot&er is unfa$ora+le. t&en ta'e t&e difference) C6. !2 ,nfa$ora+le ,nfa$ora+le
,nfa$ora+le
,nfa$ora+le
Diff: LO: 11EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. 7/) Efficiency $ariances for direct la+or s&ow &ow c&an(es in t&e usa(e of la+or affect a com)anyGs )rofits. Answer: %#,E Diff: 1 LO: 11-EOC: S11-! AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
76) %&e total direct la+or $ariance is t&e sum of t&e direct la+or rate $ariance and t&e direct la+or efficiency $ariance. Answer: %#,E Diff: 1 LO: 11-EOC: S11-! AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 77) %&e direct la+or rate $ariance descri+es differences in t&e antici)ated 8standard) la+or rate and t&e actual la+or rate )aid. Answer: %#,E Diff: 1 LO: 11-EOC: S11-! AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 7:) %&e direct la+or rate $ariance is calculated +y multi)lyin( t&e standard &ours t&at s&ould &a$e +een wor'ed for t&e actual out)ut +y t&e difference +etween t&e standard la+or rate and t&e actual la+or rate. Answer: FALSE Diff: 1 LO: 11-EOC: S11-! AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances :2) It is )ossi+le to encounter a situation w&ere t&e direct la+or rate $ariance is fa$ora+le and t&e direct la+or efficiency $ariance is unfa$ora+le. Answer: %#,E Diff: 1 LO: 11-EOC: S11-! AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances :1) A rate $ariance for direct la+or measures &ow well a com)any 'ee)s unit )rices of la+or in)uts wit&in standards. Answer: %#,E Diff: 1 LO: 11-EOC: E11- ! AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances.
: ) If t&e standard 5uantity allowed for direct la+or is less t&an t&e actual 5uantity used. t&e efficiency $ariance is fa$ora+le. Answer: FALSE Diff: 1 LO: 11-EOC: S11-! AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. :-) ;&ic& $ariance is directly im)acted if t&e em)loyees w&o +uild t&e )roduct (o on stri'e and tem)orary wor'ers w&o are slower and not as s'illed are &ired< A) Haterials )rice $ariance ") Haterials 5uantity $ariance C) La+or efficiency $ariance D) La+or rate $ariance Answer: C Diff: LO: 11-EOC: S11-! AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. :0) 4ow is t&e direct la+or rate $ariance calculated< A) %&e difference +etween t&e standard la+or rate and t&e actual la+or rate multi)lied +y t&e actual la+or &ours used ") %&e difference +etween t&e standard la+or rate and t&e actual la+or rate multi)lied +y t&e standard allowa+le &ours C) %&e difference +etween t&e standard la+or &ours and t&e allowa+le la+or &ours D) %&e difference +etween t&e standard la+or rate and t&e actual la+or rate Answer: A Diff: LO: 11-EOC: S11-! AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances.
:!) 4ow is t&e direct la+or efficiency $ariance calculated< A) %&e difference +etween t&e standard la+or &ours allowed and t&e actual la+or &ours used multi)lied +y t&e actual la+or rate. ") %&e difference +etween t&e standard la+or &ours allowed and t&e actual la+or &ours used multi)lied +y t&e standard la+or rate C) %&e difference +etween t&e standard la+or &ours and t&e actual la+or &ours used. D) %&e difference +etween t&e standard la+or rate and t&e actual la+or rate. Answer: " Diff: LO: 11-EOC: S11-! AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. :/) %&e direct la+or fle*i+le +ud(et $ariance can +e di$ided into two $ariances: A) rate $ariance and )rice $ariance. ") )rice $ariance and usa(e $ariance. C) rate $ariance and efficiency $ariance. D) )rice $ariance and efficiency $ariance. Answer: C Diff: LO: 11-EOC: S11-! AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances :6) A fa$ora+le direct la+or efficiency $ariance mi(&t indicate t&at A) &i(&er s'illed wor'ers were used t&at )erformed t&e tas' slower t&an e*)ected. ") &i(&er s'illed wor'ers were used t&at )erformed t&e tas' faster t&an e*)ected. C) lower s'illed wor'ers were )aid a &i(&er wa(e t&an e*)ected. D) lower s'illed wor'ers were )aid a lower wa(e t&an e*)ected. Answer: " Diff: LO: 11-EOC: S11-! AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances.
:7) %&e unem)loyment rate is &i(& in t&e city in w&ic& a com)any &as a factory. %&e com)any finds t&at t&ey are a+le to )ay new em)loyees a lower wa(e )er &our t&an w&en t&e unem)loyment rate was lower a year a(o. ;&ic& $ariance would +e directly im)acted< A) Haterials )rice $ariance ") Haterials 5uantity $ariance C) La+or efficiency $ariance D) La+or rate $ariance Answer: D Diff: LO: 11-EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. ::) A com)any recei$es an unusually &i(& num+er of orders in a mont&. %o )roduce all of t&e orders wit&in t&e sc&eduled dates of deli$ery. t&e com)any )ays em)loyees an e*tra C7 )er &our for e$ery &our of o$ertime t&e em)loyees wor'. ;&ic& $ariance would +e directly im)acted< A) Haterials )rice $ariance ") Haterials 5uantity $ariance C) La+or efficiency $ariance D) La+or rate $ariance Answer: D Diff: LO: 11-EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. 122) An unfa$ora+le direct la+or rate $ariance indicates w&ic& of t&e followin(< A) "ot& actual 5uantity and actual cost of direct la+or &ours e*ceeded standard 5uantity and standard cost of &ours for actual out)ut. ") %&e actual 5uantity of direct la+or &ours wor'ed e*ceeded t&e standard 5uantity of &ours for actual out)ut. C) %&e actual direct la+or cost )er &our e*ceeded t&e standard direct la+or cost )er &our for actual 5uantity of direct la+or &ours. D) %&e actual cost of direct la+or )er &our was less t&an t&e standard cost of direct la+or )er &our. Answer: C Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances.
!2 Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
121) A fa$ora+le direct la+or efficiency $ariance and an unfa$ora+le direct la+or rate $ariance mi(&t indicate w&ic& of t&e followin(< A) ,ns'illed wor'ers usin( more actual &ours t&an standard. )aid at a &i(&er rate )er &our t&an t&e standard rate ") ,ns'illed wor'ers usin( less actual &ours t&an standard. )aid a lesser rate )er &our t&an t&e standard rate C) S'illed wor'ers usin( less actual &ours t&an standard. )aid at a &i(&er rate )er &our t&an t&e standard rate D) S'illed wor'ers usin( more actual &ours t&an standard. )aid at a &i(&er rate )er &our t&an t&e standard rate Answer: C Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. 12 ) %&e 99999999 $ariance Kmeasures &ow well t&e +usiness 'ee)s )rices of direct la+or in)uts wit&in standardsK. A) )roduction $olume ") o$er&ead fle*i+le +ud(et C) rate D) efficiency Answer: C Diff: 1 LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. 12-) %&e 99999999 $ariance Kmeasures w&et&er t&e 5uantity of direct la+or used to ma'e t&e actual num+er of out)uts is wit&in t&e standard allowed for t&at num+er of out)utsK. A) )roduction $olume ") o$er&ead fle*i+le +ud(et C) rate D) efficiency Answer: D Diff: 1 LO: 11-EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
120) %&e Da$idson Cor)oration )roduces cloc's. Accordin( to com)any standards. it s&ould ta'e &ours of direct la+or to )roduce a cloc'. Da$idsonGs standard la+or cost is C1: )er &our. Durin( Lune. %&omas )roduced /. 22 sto)watc&es and used 1-.!22 &ours of direct la+or at a total cost of C /2.222. ;&at is %&omasG direct la+or rate $ariance for Lune< A) C1./26 fa$ora+le ") C1./26 unfa$ora+le C) C-.!22 fa$ora+le D) C-.!22 unfa$ora+le Answer: D E*)lanation: D) La+or rate $ar. B 8Actual rate )er &our - Std rate )er &our) E actual &ours C-.!22 , B 8R /2.222>1-.!22S - C1:) E 1-.!22 Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 12!) %&e followin( information descri+es a com)anyGs usa(e of direct la+or in a recent )eriod: Actual direct la+or &ours used Actual rate )er &our Standard rate )er &our Standard &ours for units )roduced -0.222 C16.22 C1/.6! --.!22
4ow muc& is t&e direct la+or efficiency $ariance< A) C7.-6! fa$ora+le ") C7.-6! unfa$ora+le C) C7.!22 unfa$ora+le D) C7.!22 fa$ora+le Answer: " E*)lanation: ") La+or efficiency $ar B 8Actual &ours - Std &ours for actual units ) E Std rate C7.-6! , B 8-0.222 - --.!22) E 1/.6! Diff: LO: 11-EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
12/) %&e followin( information descri+es a com)anyGs usa(e of direct la+or in a recent )eriod: Actual direct la+or &ours used Actual rate )er &our Standard rate )er &our Standard &ours for units )roduced -0.222 C16.22 C1/.6! --.!22
4ow muc& is t&e direct la+or rate $ariance< A) C7.-6! fa$ora+le ") C7.!22 fa$ora+le C) C7.-6! unfa$ora+le D) C7.!22 unfa$ora+le Answer: D E*)lanation: D) La+or rate $ar. B 8Actual rate )er &our - Std rate )er &our) E actual &ours C7.!22 , B 816.22 - C1/.6!) E -0.222 Diff: LO: 11-EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 126) %&e actual cost of direct la+or )er &our is C1/.22 and t&e standard cost of direct la+or )er &our is C1!.!2. %&e direct la+or &ours allowed )er finis&ed unit is 2.! &our. Durin( t&e current )eriod. !.!22 units of finis&ed (oods were )roduced usin( -.222 direct la+or &ours. 4ow muc& is t&e direct la+or rate $ariance< A) C1.!22 fa$ora+le ") C .6!2 fa$ora+le C) C1.!22 unfa$ora+le D) C .6!2 unfa$ora+le Answer: C E*)lanation: C) La+or rate $ar. B 8Actual rate )er &our - Std rate )er &our) E actual &ours C1.!22 , B 81/.22 - C1!.!2) E -.222 Diff: LO: 11-EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
!Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
127) %&e actual cost of direct la+or )er &our is C1/.22 and t&e standard cost of direct la+or )er &our is C1!.!2. %&e direct la+or &ours allowed )er finis&ed unit is 2.! &our. Durin( t&e current )eriod. !.!22 units of finis&ed (oods were )roduced usin( -.222 direct la+or &ours. 4ow muc& is t&e direct la+or efficiency $ariance< A) C-.76! unfa$ora+le ") C-.76! fa$ora+le C) C0.222 fa$ora+le D) C0.222 unfa$ora+le Answer: A E*)lanation: A) La+or efficiency $ar B 8Actual &ours - Std &ours for actual units) E Std rate C-.76! , B 8-.222 - 8!.!22 units E 2.! std &rs)) E C1!.!2 Diff: LO: 11-EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 12:) ;&en auto manufacturer "H; )urc&ased t&e #olls-#oyce +rand name. "H; &ad to &ire and train a new staff of assem+ly wor'ers. %&e new wor'ers were )aid C ! )er &our. wor'ed a total of 6.!22 &ours. and )roduced .222 cars. "H; +ud(eted for a standard la+or rate of C 6 )er &our and 1. ! direct la+or &ours )er car. ;&at is t&e direct la+or rate $ariance for t&e #olls-#oyce di$ision< A) C0.222 fa$ora+le ") C1!.222 fa$ora+le C) C0.222 unfa$ora+le D) C1!.222 unfa$ora+le Answer: " E*)lanation: ") La+or rate $ar. B 8Actual rate )er &our - Std rate )er &our) E actual &ours C1!.222 F B 8 ! - 6) E 6.!22 Diff: LO: 11-EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
112) ;&en auto manufacturer "H; )urc&ased t&e #olls-#oyce +rand name. "H; &ad to &ire and train a new staff of assem+ly wor'ers. %&e new wor'ers were )aid C ! )er &our. wor'ed a total of 6.!22 &ours. and )roduced .222 cars. "H; +ud(eted for a standard la+or rate of C 6 )er &our and 1. ! direct la+or &ours )er car. ;&at is t&e direct la+or efficiency $ariance for t&e #olls-#oyce di$ision< A) C1 !.222 unfa$ora+le ") C1 !.222 fa$ora+le C) C1-!.222 fa$ora+le D) C1-!.222 unfa$ora+le Answer: D E*)lanation: D) La+or efficiency $ar B 8Actual &ours - Std &ours for act units ) E Std rate C1-!.222 ,B 86.!22 - 8 .222 units E 1. ! std &rs)) E C 6 Diff: LO: 11-EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 111) %&e actual cost of direct la+or )er &our is C10.6!. %wo and one &alf standard direct la+or &ours are allowed )er unit of finis&ed (oods. Durin( t&e current )eriod. .622 units were )roduced usin( /.!22 direct la+or &ours. %&e direct la+or efficiency $ariance is C .!22 fa$ora+le. Calculate t&e standard direct la+or rate )er &our. A) C10.6! ") C12.22 C) C-/.77 D) C12.72 Answer: " E*)lanation: ") La+or efficiency $ar B 8Actual &ours - Std &ours for act units) E Std )rice C .!22 B 8/.!22 - 8 .622 E .!)) E Std rate Std rate B C .!22 > !2 B C 12.22 Diff: LO: 11-EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances.
!! Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
11 ) %&e standard cost of direct la+or )er &our is C1 .!2. One and one &alf standard direct la+or &ours are allowed )er unit of finis&ed (oods. Durin( t&e current )eriod. !/2 units were )roduced usin( 1. !2 direct la+or &ours. %&e direct la+or rate $ariance is C1.222 unfa$ora+le. Calculate t&e actual cost of direct la+or )er &our. A) C1 .!2 ") C- .72 C) C1-.-2 D) C17.6! Answer: C E*)lanation: C) La+or rate $ar. B 8Actual rate )er &our - Std rate )er &our) E actual &ours C1.222 B 8Actual rate )er &our - C1 .!2) E 1. !2 &rs Act rate B C1/./ ! > 1. !2 B C1-.-2 Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 11-) 4istoric #estoration Com)any +ud(eted .! &ours of direct la+or )er unit at C10.6! )er &our to )roduce /22 re)lica door 'no+s. %&e /22 'no+s were com)leted usin( 1. 22 &ours of direct la+or at C10.22 )er &our. ;&at is t&e direct la+or rate $ariance< A) C:22 fa$ora+le ") C1.1 ! fa$ora+le C) C:22 unfa$ora+le D) C1.1 ! unfa$ora+le Answer: A E*)lanation: A) La+or rate $ar. B 8Actual rate )er &our - Std rate )er &our) E actual &ours C:22 F B 810.22 - C10.6!) E 1. 22 &rs Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
!/ Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
110) C&emical Su))ly Incor)orated +ud(eted two and one &alf &ours of direct la+or )er unit at C11.6! )er &our to )roduce /!2 units of )roduct. %&e /!2 units were com)leted usin( 1.6!2 &ours of direct la+or at C1 .!2 )er &our. ;&at is t&e direct la+or efficiency $ariance< A) C1.0/: unfa$ora+le ") C1.0/: fa$ora+le C) C1.!/- unfa$ora+le D) C1.!/- fa$ora+le Answer: A E*)lanation: A) La+or efficiency $ar B 8Actual &ours - Std &ours for act units) E Std rate C 1.0/: , B 81.6!2 - 8/!2 E .!)) E C11.6! Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 11!) C&emical Su))ly Incor)orated +ud(eted two and one &alf &ours of direct la+or )er unit at C11.6! )er &our to )roduce /!2 units of )roduct. %&e /!2 units were com)leted usin( 1.6!2 &ours of direct la+or at C1 .!2 )er &our. ;&at is t&e direct la+or rate $ariance< A) C1. 1: fa$ora+le ") C1.-1- fa$ora+le C) C1. 1: unfa$ora+le D) C1.-1- unfa$ora+le Answer: D E*)lanation: D) La+or rate $ar. B 8Actual rate )er &our - Std rate )er &our for actual out)ut) E actual &ours C 1.-1- , B 8C1 .!2 - C11.6!) E 1.6!2 Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
11/) Acti$e Lifestyle "e$era(es (at&ered t&e followin( information for Lo+ P: 7: Standard %otal Cost Direct la+or: Standard: !02 &ours at C/.6!>&r. Actual: !22 &ours at C/.!2>&r. -./0! -. !2 Actual %otal Cost
;&at is t&e direct la+or rate $ariance< A) C1 ! fa$ora+le ") C1 ! unfa$ora+le C) C1-! fa$ora+le D) C1-! unfa$ora+le Answer: A E*)lanation: A) La+or rate $ar. B 8Actual rate )er &our - Std rate )er &our) E actual &ours C1 ! F B 8C/.!2 - C/.6!) E !22 Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 116) Acti$e Lifestyle "e$era(es (at&ered t&e followin( information for Lo+ P: 7: Standard %otal Cost Direct la+or: Standard: !02 &ours at C/.6!>&r. Actual: !22 &ours at C/.!2>&r. -./0! -. !2 Actual %otal Cost
;&at is t&e direct la+or efficiency $ariance< A) C /2 fa$ora+le ") C /2 unfa$ora+le C) C 62 fa$ora+le D) C 62 unfa$ora+le Answer: C E*)lanation: C) La+or efficiency $ar B 8Actual &ours - Std &ours for act units) E Std rate C 62 F B 8!22 - !02) E /.6! Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
117) #aQQle "a'in( Com)any (at&ered t&e followin( actual results for t&e current mont&: Actual amounts: ,nits )roduced Direct la+or cost 812.222 &ours) "ud(eted )roduction and standard costs were: "ud(eted )roduction Direct la+or !.222 &rs.>unit at C:.22>&r. !.!22 C!-.222
;&at is t&e direct la+or rate $ariance< A) C02.622 unfa$ora+le ") C02.622 fa$ora+le C) C-6.222 unfa$ora+le D) C-6.222 fa$ora+le Answer: D E*)lanation: D) La+or rate $ar. B 8Actual rate )er &our - Std rate )er &our) E actual &ours C-6.222 F B 8RC!-.222>12.222S - C:) E 12.222 Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
!: Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
11:) #aQQle "a'in( Com)any (at&ered t&e followin( actual results for t&e current mont&: Actual amounts: ,nits )roduced Direct la+or cost 812.222 &ours) "ud(eted )roduction and standard costs were: "ud(eted )roduction Direct la+or !.222 &rs.>unit at C:.22>&r. !.!22 C!-.222
;&at is t&e direct la+or efficiency $ariance< A) C:.222 fa$ora+le ") C!.-22 fa$ora+le C) C:.222 unfa$ora+le D) C!.-22 unfa$ora+le Answer: A E*)lanation: A) La+or efficiency $ar B 8Actual &ours - Std &ours for act units) E Std rate C:.222 F B 812.222 - R &rs E !.!22S) E C: Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
/2 Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
1 2) "elle Auto Detailin( re)orted t&e followin( results for t&e )ast wee': Actual num+er of cars detailed Actual direct la+or &ours used Actual total direct la+or cost "ud(eted num+er of cars to +e detailed Standard direct la+or cost )er &our Standard direct la+or )er car !2 / ! C/.!22 -22 C12.22 1.!
;&at is "elleGs direct la+or rate $ariance< A) C !2 fa$ora+le ") C1!2 fa$ora+le C) C !2 unfa$ora+le D) C1!2 unfa$ora+le Answer: C E*)lanation: C) La+or rate $ar. B 8Actual rate )er &our - Std rate )er &our) E actual &ours C !2 , B 88C/.!22 > / !) - C12) E / ! Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1 1) "elle Auto Detailin( re)orted t&e followin( results for t&e )ast wee': Actual num+er of cars detailed Actual direct la+or &ours used Actual total direct la+or cost "ud(eted num+er of cars to +e detailed Standard direct la+or cost )er &our Standard direct la+or )er car !2 / ! C/.!22 -22 C12.22 1.!
;&at is "elleGs direct la+or efficiency $ariance< A) C .!22 fa$ora+le ") C .!22 unfa$ora+le C) C ./22 fa$ora+le D) C ./22 unfa$ora+le Answer: " E*)lanation: ") La+or efficiency $ar B 8Actual &ours - Std &ours at act units) E Std rate C .!22 , B 8/ ! - R1.! E !2S) E C12 Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1 ) Hac"et& Fa+rics +ud(eted to manufacture 1.022 curtains in Fe+ruary. Actual out)ut for Harc& was 1.!6! curtains wit& total direct materials cost of C-.022 and total direct la+or cost of C!. !2. %&e direct la+or standard is 2 minutes )er curtain at a direct la+or rate of 16.!2 )er &our. %&e direct material standard is 2.6! yards of direct materials )er curtain at a cost of C1- )er )ound. Actual direct la+or &ours were 6!. A $ariance analysis for /1 Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
Fe+ruary would s&ow a direct la+or rate $ariance of A) C .!2/ fa$ora+le. ") C .!2/ unfa$ora+le. C) C0-7 fa$ora+le. D) C0-7 unfa$ora+le. Answer: D E*)lanation: D) La+or rate $ar. B 8Actual rate )er &our - Std rate )er &our) E actual & C0-7 , B 8R!. !2 > 6!S - C16.!2) E 6! Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1 -) LNI Cor)orationGs direct la+or costs and related information for t&e mont& of Lune were as follows: Actual total direct la+or-&ours Standard total direct la+or-&ours %otal direct la+or cost ,nfa$ora+le direct la+or rate 8rate) $ariance 1.-!2 1. 22 C1/.022 C/!2
;&at is LNI Cor)orationGs direct la+or efficiency $ariance< A) C1.:67 fa$ora+le ") C1.:67 unfa$ora+le C) C1.6!2 unfa$ora+le D) C1.6!2 fa$ora+le Answer: C E*)lanation: C) La+or rate $ar. B 8Actual rate )er &our - Std rate )er &our) E actual 5uantity C/!2 B R81/.022 > 1.-!2) - rate )er &ourS E 1.-!2 Std )rice B 1!.6!2 > 1.-!2 B C11./6 La+or efficiency $ar B 8Actual &ours - Std rate for actual units) E Std rate C1.6!2 B 81.-!2 - 1. 22) E 11./6 Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
/ Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
1 0) Iewtowne "a'ery +a'es fres& )ies t&at are $ery )o)ular wit& t&e local residents. For Luly. Iewtowne "a'ery +ud(eted 6!2 direct la+or &ours to )roduce !22 )ies. In Luly. Iewtowne "a'ery actually )roduced ! 2 )ies and actually used 722 direct la+or &ours. %&e standard &ours allowed durin( Luly would &a$e +een closest to A) 7- . ") 6!2. C) 672. D) 6 1. Answer: C E*)lanation: C) Standard )rice B 6!2 &rs > !22 ca'es B 1.! &rs )er ca'e Std &rs allow B ! 2 ca'es )roduced E 1.! &r )er ca'e B 672 Diff: LO: 11-EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. 1 !) Nalley Niew Com)any )roduces &i'in( +oots. %&e direct la+or standard for eac& )air of +oots is 1 &our at a cost of C 2.22 )er direct la+or &our. Durin( t&e mont& of Hay. Nalley Niew Com)any used .!22 direct la+or &ours to )roduce .-!2 )airs of +oots. %otal direct la+or cost for Hay was C07.222. ;&at is t&e la+or rate $ariance for Hay< A) C .222 fa$ora+le ") C .222 unfa$ora+le C) C1.222 fa$ora+le D) C1.222 unfa$ora+le Answer: A E*)lanation: A) La+or rate $ar. B 8Actual rate )er &our - Std rate )er &our) E actual &ours C .222F B 8RC07.222 > .!22S - C 2.22) E .!22 Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
/Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
1 /) =uintonGs Salon cuts menGs &air. La+or standards for eac& cut are as follows: Standard direct la+or &ours )er cut Standard direct la+or rate %&e followin( data relates to t&e &aircuts durin( t&e mont& of Octo+er: Actual &ours wor'ed Actual total la+or cost Actual num+er of &aircuts 1/2 C-.1!2 2 .6! C 2.22
;&at is t&e la+or efficiency $ariance for t&e mont& of Octo+er< A) C0 fa$ora+le ") C0 unfa$ora+le C) C122 fa$ora+le D) C122 unfa$ora+le Answer: C E*)lanation: C) La+or efficiency $ar B 8Actual &ours - Std &ours for act units) E Std rate - C122 F B 81/2 - R 2 E .6!S) E C 2 Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1 6) Hi'eGs Ser$ice Station )erforms oil c&an(es for cars. Eac& oil c&an(e &as a standard time of 2.! direct la+or &ours. %&e standard direct la+or &our rate is C1!.22 )er &our. Data relatin( to oil c&an(es for t&e mont& of Se)tem+er follow: Actual num+er of oil c&an(es )erformed Actual direct la+or &ours wor'ed Actual total direct la+or cost 1.722 :22 1 .6!2
;&at is t&e la+or rate $ariance for Se)tem+er< A) C1.!22 fa$ora+le ") C6!2 fa$ora+le C) C1.!22 unfa$ora+le D) C6!2 unfa$ora+le Answer: " E*)lanation: ") La+or rate $ar. B 8Actual rate )er &our - Std rate )er &our) E actual &ours C6!2 F B 8RC1 .6!2 > :22S - C1!.22) E :22 Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
1 7) A'ron Clay Com)any manufactures flower)ots. %&e followin( data relate to t&e standards for direct la+or: Standard direct la+or &ours )er )ot Standard direct la+or rate )er &our A'ron Clay Com)any &ad t&e followin( actual results for A)ril: Actual direct la+or &ours Actual total direct la+or cost Actual num+er of )ots )roduced 0.122 C 67.222 7.-!2 .! C 17.6!
;&at is t&e direct la+or efficiency $ariance for A)ril< A) C-7 fa$ora+le ") C-7 unfa$ora+le C) C1.02/ fa$ora+le D) C1.02/ unfa$ora+le Answer: C E*)lanation: C) La+or efficiency $ar B 8Actual &ours - Std &ours for actual units) E Std rate C1.02/ F B 80.122 - R7.-!2 E .!S) E C17.6! Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1 :) Simon SayQ is a re(ional manufacturer of +a+y toys )roduced from )lastic deri$ed from or(anic and non-to*ic sources. Hana(ement +ud(eted one-&alf &our of direct la+or )er toy at a standard rate of C1 .!2 )er &our. %&e most current )roduction run )roduced 1.7!2 toys and used 1.6!2 la+or &ours at a total cost of C .6!2. ;&at is t&e direct la+or rate $ariance for t&is )roduction run< A) C76! fa$ora+le ") C76! unfa$ora+le C) C-!2 fa$ora+le D) C-!2 unfa$ora+le Answer: " E*)lanation: ") La+or rate $ar. B 8Actual rate )er &our - Std rate )er &our) E actual &ours C76! , B 8RC .6!2> 1.6!2S - C1 .!2) E 1.6!2 Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
/! Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
1-2) IeilGs Ser$ice S&o) )erforms routine $e&icle maintenance. One suc& ser$ice is tire rotations. IeilGs re)orts t&e followin( +ud(eted and actual amounts for tire rotations for t&e mont& of Au(ust. Standard direct la+or &ours )er $e&icle Standard direct la+or rate )er &our Actual &ours wor'ed Actual total la+or cost Actual num+er of $e&icles ser$iced 2.! C16.22 072 C7./02 :22
;&at is t&e la+or efficiency $ariance for t&e mont& of Au(ust< A) C:22 fa$ora+le ") C:22 unfa$ora+le C) C!12 fa$ora+le D) C!12 unfa$ora+le Answer: D E*)lanation: D) La+or efficiency $ar B 8Actual &ours - Std &ours for actual units ) E Std rate C!12 , B 8072 - R:22 E .!S) E C16 Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1-1) Coltrane Husic manufactures musical instrument for sale to students and )rofessionals. %&e information for one of ColtraneGs most )o)ular )roducts. )rofessional sa*o)&ones. follows: 3roduct Standard direct la+or &ours )er sa*o)&one Standard direct la+or rate )er &our Actual num+er of sa*o)&ones manufactured Actual direct la+or &ours wor'ed Actual total direct la+or cost Sa*o)&one 1. ! C 6.22 /!2 1.222 C !.022
;&at is t&e la+or rate $ariance for sa*o)&ones< A) C1./22 fa$ora+le ") C1.202 fa$ora+le C) C1./22 unfa$ora+le D) C1.202 unfa$ora+le Answer: A E*)lanation: A) La+or rate $ar. B 8Actual rate - Std rate) E actual &ours C1./22 F B 8RC !.022 > 1.222S - C 6.22) E 1.222 Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
// Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
1- ) Si+erlin( %ire Cor)oration manufactures automo+ile tires. Si+erlin( re)orted t&e followin( +ud(eted 8standard) and actual information for last 5uarter. Standard direct la+or &ours )er tire Standard rate )er direct la+or &our Actual direct la+or &ours Actual total direct la+or cost Actual num+er of tires )roduced 2. ! C16.!2 -. 22 C/!.222 12.222
;&at is t&e direct la+or efficiency $ariance for last 5uarter< A) C1 . !2 fa$ora+le ") C16! fa$ora+le C) C1 . !2 unfa$ora+le D) C16! unfa$ora+le Answer: C E*)lanation: C) La+or efficiency $ar B 8Actual &ours - Std &ours for actual units) E Std rate C1 . !2 , B 8-. 22 - R12.222 E . !S) E C16.!2 Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1--) Lustin %ime Ouitars manufactures electric (uitars. %&e followin( data relate to t&e standards for direct la+or: Standard direct la+or &ours )er (uitar Standard direct la+or rate )er &our Lustin %ime &ad t&e followin( actual results for Harc&: Actual direct la+or &ours Actual total direct la+or cost Actual num+er of (uitars )roduced 1. !2 C !.022 -6! -.! C 17.22
;&at is t&e direct la+or efficiency $ariance for Harc&< A) C1.1 ! fa$ora+le ") C1.1 ! unfa$ora+le C) C 1: fa$ora+le D) C 1: unfa$ora+le Answer: A E*)lanation: A) La+or efficiency $ar B 8Actual &ours - Std &ours for actual units) E Std rate C1.1 ! F B 81. !2 - R-6! E -.! S) E C17 Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1-0) Hadden Cor)oration manufactures t-s&irts. w&ic& is its only )roduct. %&e standards for t-s&irts are as follows: Standard direct la+or cost )er &our Standard direct la+or &ours )er t-s&irt C 16 ./
Durin( t&e mont& of Lanuary. t&e com)any )roduced 1. !2 t-s&irts. #elated )roduction data for t&e mont& follows: Actual direct la+or &ours Actual direct la+or cost incurred 662 C 1-.222
;&at is t&e direct la+or rate $ariance for t&e mont&< A) C:2 fa$ora+le ") C:2 unfa$ora+le C) C-02 fa$ora+le D) C-02 unfa$ora+le Answer: A E*)lanation: A) La+or rate $ar. B 8Actual rate )er &our - Std rate )er &our) E actual &ours C:2 F B 8RC1-.222 > 662S - C16) E 662 Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
1-!) Hadden Cor)oration manufactures t-s&irts. w&ic& is its only )roduct. %&e standards for t-s&irts are as follows: Standard direct la+or cost )er &our Standard direct la+or &ours )er t-s&irt C 16 ./
Durin( t&e mont& of Lanuary. t&e com)any )roduced 1. !2 t-s&irts. #elated )roduction data for t&e mont& follows: Actual direct la+or &ours Actual direct la+or cost incurred 662 C 1-.222
;&at is t&e direct la+or efficiency $ariance for t&e mont&< A) C:2 fa$ora+le ") C:2 unfa$ora+le C) C-02 fa$ora+le D) C-02 unfa$ora+le Answer: D E*)lanation: D) La+or efficiency $ar B 8Actual &ours - Std &ours for actual units) E Std rate -02 , B 8662 - R1. !2 E 2./S) E C16 Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
/: Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
1-/) Hic&ael Cor)oration manufactures railroad cars. w&ic& is its only )roduct. %&e standards for railroad cars are as follows: Standard la+or &ours )er car Standard la+or cost )er direct la+or &our -2 C 2.22
Durin( t&e mont& of Harc&. t&e com)any )roduced 1./!2 railroad cars. #elated )roduction data for t&e mont& follows: Actual direct la+or &ours Actual direct la+or total cost !2.222 C :7!.222
;&at is t&e direct la+or rate $ariance for t&e mont&< A) C1!.222 fa$ora+le ") C1!.222 unfa$ora+le C) C12.222 fa$ora+le D) C12.222 unfa$ora+le Answer: A E*)lanation: A) La+or rate $ar. B 8Actual rate )er &our - Std rate )er &our) E actual &ours C1!.222 F B 8RC:7!.222 > !2.222S - C 2) E !2.222 Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
1-6) Hic&ael Cor)oration manufactures railroad cars. w&ic& is its only )roduct. %&e standards for railroad cars are as follows: Standard la+or &ours )er car Standard la+or cost )er direct la+or &our -2 C 2.22
Durin( t&e mont& of Harc&. t&e com)any )roduced 1./!2 railroad cars. #elated )roduction data for t&e mont& follows: Actual direct la+or &ours Actual direct la+or total cost !2.222 C :7!.222
;&at is t&e direct la+or efficiency $ariance for t&e mont&< A) C1!.222 fa$ora+le ") C1!.222 unfa$ora+le C) C12.222 fa$ora+le D) C12.222 unfa$ora+le Answer: D E*)lanation: D) La+or efficiency $ar B 8Actual &ours - Std &ours for actual units) E Std rate 12.222 , B 8!2.222 - R1./!2 E -2S) E C 2 Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1-7) On t&e line in front of eac& $ariance. enter t&e letters of t&e items needed to com)ute t&at $ariance. Tou will enter more t&an one item on eac& line. A. Actual la+or rate ". Actual la+or &ours C. Standard la+or rate D. Standard la+or &ours 999999 Direct la+or rate $ariance 999999 Direct la+or efficiency $ariance Answer: A. ". C Direct la+or rate $ariance ". C. D Direct la+or efficiency $ariance Diff: 1 LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
1-:) Cuya&o(a Cor)oration re)orts t&e followin( standards for direct la+or for t&e year: Standard cost )er &our Standard 5uantity )er finis&ed (ood C16.6! .2 &ours
Durin( t&e year. -!.222 finis&ed (oods were )roduced. %&e direct la+or efficiency $ariance was C ./!2 fa$ora+le. %&e direct la+or fle*i+le +ud(et $ariance was C!!2 fa$ora+le. Calculate t&e followin( items re(ardin( direct la+or for Cuya&o(a Cor)oration for t&e year: A. Direct la+or rate $ariance ". Standard &ours of direct la+or for actual )roduction C. Actual &ours of direct la+or incurred for actual )roduction Answer: SOLUTION Direct la+or efficiency $ariance-fa$ora+le Direct la+or fle*i+le +ud(et $ariance-fa$ora+le Direct la+or rate $ariance SOLUTION B Standard direct la+or )er finis&ed (ood Actual finis&ed (oods )roduced Standard &ours of direct la+or for actual )roduction SOLUTION C Direct la+or efficiency $ariance-fa$ora+le Standard direct la+or cost Fa$ora+le efficiency $ariance 8in)ut as ne(ati$e) > standard direct la+or cost Standard 5uantity of direct la+or for actual )roduction Actual &ours of direct la+or incurred for actual )roduction
C ./!2 C!!2 C .122 ,nfa$ora+le .22 -!.222 62.222 C ./!2 C16.6! 810:) 62.222 /:.7!1
Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances.
102) 3yne Cor)orationGs actual out)ut for a )eriod was assi(ned t&e standard la+or cost of C- .!22. If t&e com)any &ad an unfa$ora+le direct la+or rate $ariance of C1.6!2 and a fa$ora+le direct la+or efficiency $ariance of C:6!. w&at was t&e total actual cost of direct la+or incurred durin( t&e )eriod< Answer: Direct la+or rate $ariance C1.6!2 ,nfa$ora+le Direct la+or efficiency $ariance C:6! Fa$ora+le Direct la+or fle*i+le +ud(et $ariance 8if t&e )rice and efficiency $ariances are +ot& fa$ora+le. add t&emF if +ot& are unfa$ora+le. add t&emF if one is fa$ora+le and t&e ot&er is unfa$ora+le. t&en ta'e t&e difference) C66! ,nfa$ora+le Standard la+or cost C- .!22 Direct la+or fle*i+le +ud(et $ariance C66! Actual direct la+or cost 8if fle*i+le +ud(et $ariance is fa$ora+le. su+tract $ariance from standard la+or costF if unfa$ora+le. add to standard la+or cost) C--. 6! Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 101) 4oward IndustriesG actual direct la+or cost was C/6.222 durin( t&e current )eriod. 4oward re)orted an unfa$ora+le direct la+or rate $ariance of C1.722 and a fa$ora+le direct la+or efficiency $ariance of C .:22. ;&at was t&e standard direct la+or cost for actual out)ut durin( t&e )eriod< Answer: Direct la+or rate $ariance C1.722 ,nfa$ora+le Direct la+or efficiency $ariance C .:22 Fa$ora+le Direct la+or fle*i+le +ud(et $ariance 8if t&e rate and efficiency $ariances are +ot& fa$ora+le. add t&emF if +ot& are unfa$ora+le. add t&emF if one is fa$ora+le and t&e ot&er is unfa$ora+le. t&en ta'e t&e difference) C1.122 Fa$ora+le Actual direct la+or cost C/6.222 Direct la+or fle*i+le +ud(et $ariance C1.122 Standard direct la+or cost for actual out)ut 8if fle*i+le +ud(et $ariance is fa$ora+le. add $ariance to actual direct la+or costF if unfa$ora+le. su+tract from actual direct la+or cost) C/7.122 Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
10 ) Ii*onGs Diner +a'es )ies in lar(e +atc&es. One +atc& of )ies &as t&e followin( standard costs and amounts: Standard 5uantity of su(ar 8)ounds) Standard cost )er )ound of su(ar Standard direct la+or &ours )er +atc& of )ies Standard direct la+or cost )er &our 11! C .12 1.! C 1:.22
Ii*onGs Diner +a'ed 0 ! +atc&es of )ies in t&e most recent mont&. Actual costs and usa(e le$els were as follows: Actual )ounds of su(ar )urc&ased and used )er +atc& of )ies Actual cost )er )ound of su(ar Actual direct la+or &ours )er +atc& of )ies Actual direct la+or cost )er &our #e5uired: a. +. c. d. Calculate t&e material )rice $ariance. Calculate t&e material 5uantity $ariance. Calculate t&e la+or rate $ariance. Calculate t&e la+or efficiency $ariance. 1 C . 2 C 16.6!
Answer: SOLUTION a. Actual )ounds of su(ar )urc&ased and used )er +atc& of )ies Actual +atc&es of )ies )roduced Actual )ounds of su(ar )urc&ased and used Actual cost )er )ound of su(ar Standard cost )er )ound of su(ar Difference +etween actual and standard cost )er )ound Actual )ounds of su(ar used Haterials )rice $ariance SOLUTION b. Standard 5uantity of su(ar 8)ounds) Actual +atc&es of )ies )roduced Standard materials 5uantity. in )ounds Actual )ounds of su(ar used )er +atc& of )ies Actual +atc&es of )ies )roduced Actual materials 5uantity. in )ounds Actual materials 5uantity. in )ounds Standard materials 5uantity. in )ounds Difference +etween actual and standard materials 5uantity Standard cost )er )ound of su(ar Haterials 5uantity $ariance SOLUTION c. Actual direct la+or &ours )er +atc& of )ies Actual +atc&es of )ies )roduced Actual direct la+or &ours Actual direct la+or cost )er &our Standard direct la+or cost )er &our Difference +etween actual and standard direct la+or cost Actual direct la+or &ours Direct la+or rate $ariance SOLUTION d. Actual direct la+or &ours )er +atc& of )ies Actual +atc&es of )ies )roduced Actual direct la+or &ours Standard direct la+or &ours )er +atc& of )ies Actual +atc&es of )ies )roduced Standard direct la+or &ours Actual direct la+or &ours Standard direct la+or &ours Difference +etween actual and standard direct la+or &ours Standard direct la+or cost )er &our Direct la+or efficiency $ariance Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in(
.2 0 ! !1.7!2 C . 2 C8 .12) C2.12 !1.7!2 C!.17!unfa$ora+le 11! 0 ! 07.76! .2 0 ! !1.7!2 !1.7!2 807.76!) .:6! C .12 C/. 07unfa$ora+le .2 0 ! 7!2 C16.6! C81:.22) C81. !) 7!2 81.2/-)fa$ora+le .2 0 ! 7!2 1.! 0 ! /-7 7!2 8/-7) 1C1:.22 C0.2-7unfa$ora+le 1
Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 10-) ;eissfeld Cor)oration manufactures a sin(le )roduct. %&e direct materials standard calls for ! )ounds of direct material )er unit. %&e standard for direct material cost )er )ound is C12. A com)uter error &as wi)ed out t&e records for t&e direct la+or standards +ut t&e followin( information is found for t&e mont& of Octo+er:
Ium+er of units )roduced Cost of actual direct materials )urc&ased and used Actual direct la+or &ours used Actual direct la+or cost incurred Haterials )rice $arianceJfa$ora+le La+or efficiency $arianceJunfa$ora+le %otal la+or $arianceJunfa$ora+le #e5uired:
7 ! C -7.022.22 1.! ! C 2.!76.22 C 1. 22.22 C - !.22 C 1.276.!2
a. Calculate t&e num+er of )ounds of direct materials )urc&ased and used durin( Octo+er. +. Calculate t&e materials 5uantity $ariance. c. Calculate t&e standard direct la+or rate )er &our. d. Calculate t&e standard direct la+or &ours allowed for Octo+erGs )roduction. Answer:
Diff: LO: 11-EOC: E11- 2 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. 100) All $ariances disco$ered +y mana(ement must +e in$esti(ated. Answer: FALSE Diff: 1 LO: 11-0 EOC: S11-/ AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 10!) ,)-to-date standard costs )ro$ide a +enc&mar' +y w&ic& to e$aluate actual costs and o)erations. Answer: %#,E Diff: 1 LO: 11-0 EOC: S11-/ AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis
10/) Hana(ers will want to use mana(ement +y e*ce)tion to determine w&ic& $ariances are si(nificant enou(& to warrant in$esti(ation. Answer: %#,E Diff: 1 LO: 11-0 EOC: S11-/ AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 106) 3rice and 5uantity $ariances are a way to moti$ate em)loyees. Answer: %#,E Diff: 1 LO: 11-0 EOC: S11-/ AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 107) Direct la+or standards are +ecomin( less rele$ant to many com)anies due to t&e s&ift towards automated )roduction )rocesses. Answer: %#,E Diff: 1 LO: 11-0 EOC: S11-/ AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 10:) All of t&e followin( are ad$anta(es of usin( standard costs e!cept A) mana(ers can e$aluate t&e efficiency of )roduction wor'ers. ") differences +etween t&e static +ud(et and t&e fle*i+le +ud(et can +e +ro'en down into )rice and 5uantity com)onents. C) consumer moti$ation for )urc&ases can +e analyQed. D) standard costin( allows com)anies to create fle*i+le +ud(ets. Answer: C Diff: 1 LO: 11-0 EOC: S11-/ AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis
1!2) Disad$anta(es of usin( standard costs include all of t&e followin( e!cept A) t&e cost of 'ee)in( standards u)-to-date. ") t&e s&ift towards salaried em)loyees means t&at la+or costs are now fi*ed rat&er t&an $aria+le. C) )ractical standards can discoura(e em)loyees and decrease )roducti$ity. D) traditional standards can )romote unfa$ora+le em)loyee +e&a$ior. Answer: C Diff: 1 LO: 11-0 EOC: S11-/ AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 1!1) In order for cost +enc&mar's to +e effecti$e. standard costs must +e A) +ased on &istorical costs. ") u)dated re(ularly. C) re$iewed +y salaried assem+ly-line wor'ers. D) )ractical and attaina+le. Answer: " Diff: 1 LO: 11-0 EOC: S11-/ AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 1! ) Standards s&ould +e re$iewed and u)dated at least A) yearly. ") mont&ly. C) wee'ly. D) daily. Answer: A Diff: 1 LO: 11-0 EOC: S11-/ AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis
1!-) At lean com)anies. em)loyees tend to +e multi-s'illed and cross-trained to )erform a num+er of duties. %&ese wor'ers are &eld in &i(&-esteem +y mana(ement and are considered to +e )art of a team effort. rat&er t&an a la+or force to +e controlled. Conse5uently. t&is A) increases t&e im)ortance of direct la+or standards. ") decreases t&e im)ortance of direct la+or standards. C) "ot& of t&e a+o$e. D) Ione of t&e a+o$e. Answer: " Diff: 1 LO: 11-0 EOC: S11-/ AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 1!0) ;&en decidin( w&et&er or not to ado)t standard costs and )erform $ariance analysis. mana(ement s&ould do w&ic& of t&e followin(< A) E*amine t&e costs and +enefits of a standard costin( system ") ,)date inaccurate standard costs C) Ado)t lean t&in'in( D) Increase automation of assem+ly lines Answer: A Diff: 1 LO: 11-0 EOC: S11-/ AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 1!!) Identify fi$e +enefits of standard costs. Answer: Student res)onses will $ary +ut s&ould include t&e followin( )oints: A. %&ey aid mana(ement )lannin( +y )ro$idin( t&e unit amounts for +ud(etin(. ". %&ey aid mana(ement control +y esta+lis&in( e*)ected or desired le$els of o)eratin( )erformance. Si(nificant $ariations from standard amounts si(nal t&e need for mana(ementGs attention. C. %&ey &el) moti$ate em)loyees +y ser$in( as +enc&mar's a(ainst w&ic& t&eir )erformance is measured. D. %&ey )ro$ide unit costs t&at may +e useful in settin( t&e sale )rice of )roducts or ser$ices. E. %&ey &el) sim)lify record 'ee)in(. w&ic& reduces clerical costs. Diff: LO: 11-0 EOC: E11-10 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis
1!/) %&e $aria+le o$er&ead efficiency $ariance is calculated as Actual 4ours E 8Actual #ate - Standard #ate). Answer: FALSE Diff: 1 LO: 11-! EOC: S11-11 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 1!6) %&e )roduction $olume $ariance is fa$ora+le w&ene$er e*)ected out)ut is (reater t&an actual out)ut. Answer: FALSE Diff: 1 LO: 11-! EOC: S11-11 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 1!7) %&e $aria+le o$er&ead rate $ariance may +e affected +y +ot& indirect la+or and indirect materials. Answer: %#,E Diff: 1 LO: 11-! EOC: S11-11 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1!:) %&e $aria+le o$er&ead efficiency $ariance tells mana(ement &ow efficiently manufacturin( o$er&ead was used durin( t&e )eriod. Answer: FALSE Diff: 1 LO: 11-! EOC: S11-11 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1/2) %&e $aria+le o$er&ead efficiency $ariance is also called t&e $aria+le o$er&ead s)endin( $ariance. Answer: FALSE Diff: 1 LO: 11-! EOC: S11-11 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
1/1) %&e $aria+le o$er&ead rate $ariance tells mana(ers w&et&er more or less was s)ent on $aria+le o$er&ead t&an t&ey e*)ected for t&e &ours wor'ed. Answer: %#,E Diff: 1 LO: 11-! EOC: S11-11 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1/ ) %&e total $aria+le manufacturin( o$er&ead $ariance is com)osed of t&e rate $ariance and t&e efficiency $ariance. Answer: %#,E Diff: 1 LO: 11-! EOC: S11-11 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1/-) 4ow is t&e $aria+le manufacturin( o$er&ead efficiency $ariance calculated< A) %&e difference +etween t&e actual o$er&ead rate and t&e standard o$er&ead rate multi)lied +y t&e standard o$er&ead rate ") %&e difference +etween t&e standard &ours allowed and t&e actual &ours used multi)lied +y t&e standard o$er&ead rate C) %&e difference +etween t&e standard &ours allowed and t&e actual &ours used D) %&e difference +etween t&e standard &ours allowed and t&e actual &ours used multi)lied +y t&e actual o$er&ead rate Answer: " Diff: 1 LO: 11-! EOC: S11-11 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1/0) 4ow is t&e $aria+le o$er&ead rate $ariance calculated< A) %&e difference +etween t&e actual o$er&ead rate and t&e standard o$er&ead rate multi)lied +y t&e actual &ours ") %&e difference +etween t&e actual o$er&ead rate and t&e standard o$er&ead rate multi)lied +y t&e standard &ours allowed C) %&e difference +etween t&e standard &ours allowed and t&e actual &ours used multi)lied +y t&e standard o$er&ead rate D) %&e difference +etween t&e standard &ours allowed and t&e actual &ours used multi)lied +y t&e actual o$er&ead rate Answer: A Diff: 1 LO: 11-! EOC: S11-11 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1/!) %&e $aria+le o$er&ead rate $ariance is also 'nown as w&ic& of t&e followin(< A) Naria+le o$er&ead efficiency $ariance ") Naria+le o$er&ead usa(e $ariance C) Naria+le o$er&ead s)endin( $ariance D) Naria+le o$er&ead )rice $ariance 7Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
Answer: C Diff: 1 LO: 11-! EOC: S11-11 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1//) %&e $aria+le o$er&ead rate $ariance may +e caused +y $ariances in t&e followin( )roduction in)uts e!cept A) indirect materials. ") indirect la+or. C) fi*ed manufacturin( o$er&ead. D) Ione of t&e a+o$e im)acts t&e $aria+le o$er&ead rate $ariance. Answer: C Diff: LO: 11-! EOC: S11-11 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1/6) ;&at does t&e $aria+le o$er&ead efficiency $ariance tell mana(ement< A) 4ow efficiently $aria+le manufacturin( o$er&ead was used ") 4ow efficiently fi*ed manufacturin( o$er&ead was used C) 4ow efficiently em)loyees a))lied manufacturin( o$er&ead to eac& unit D) 4ow muc& of t&e total $aria+le manufacturin( o$er&ead $ariance is due to mac&ine &ours used (i$en t&e actual $olume of out)ut Answer: D Diff: LO: 11-! EOC: S11-11 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
1/7) %&e 99999999 is t&e difference +etween total actual o$er&ead costs and t&e fle*i+le +ud(et amount for o$er&ead costs for actual )roduction. A) )roduction $olume $ariance ") o$er&ead fle*i+le +ud(et $ariance C) o$er&ead efficiency $ariance D) +ot& A and C Answer: " Diff: LO: 11-! EOC: S11-11 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1/:) ;&ic& of t&e followin( statements would +e true if actual units )roduced e*ceed t&e +ud(eted units to +e )roduced< A) 3roduction $olume $ariance is e*)ected to +e unfa$ora+le. ") O$er&ead fle*i+le +ud(et $ariance is e*)ected to +e fa$ora+le. C) 3roduction $olume $ariance is e*)ected to +e fa$ora+le. D) O$er&ead fle*i+le +ud(et $ariance is e*)ected to +e unfa$ora+le. Answer: C Diff: LO: 11-! EOC: S11-11 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
162) %&e Laramie Cor)oration manufactures 3roduct U t&at consumes a lar(e amount of o$er&ead. For t&e mont& of Octo+er Laramie )roduced 1!. !2 units of 3roduct U and incurred actual o$er&ead costs of C-6!.222. %&e standard costs de$elo)ed for 3roduct U +y Laramie follow: Standard direct la+or &ours )er unit Standard direct la+or rate )er &our Standard o$er&ead &ours )er unit Standard o$er&ead rate )er &our
C1!.22 / C!.!2
;&at was t&e total $aria+le o$er&ead $ariance for 3roduct U in Octo+er< A) C1 7. !2 fa$ora+le ") C1 7. !2 unfa$ora+le C) C :1.1 ! fa$ora+le D) C :1.1 ! unfa$ora+le Answer: A E*)lanation: A) Actual o$er&ead C-6!.222 Standard o$er&ead 81!. !2 E / E C!.!2) !2-. !2 Difference 1 7. !2 F Diff: LO: 11-! EOC: E11- 0 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 161) S)ea'er City desi(ns and manufactures &i(&-end &ome t&eater s)ea'ers. S)ea'er City uses a standard o$er&ead rate of -.! &ours )er unit at a cost of C:.!2 )er &our. Data for t&e mont& of Lune s&ows t&at S)ea'er City )roduced !22 units and recorded actual o$er&ead costs of C1:.!22. ;&at is t&e total $aria+le o$er&ead $ariance for t&e mont& of Lune< A) C .76! fa$ora+le ") C10.6!2 unfa$ora+le C) C10.6!2 fa$ora+le D) C .76! unfa$ora+le Answer: D E*)lanation: D) Actual o$er&ead C1:.!22 Standard o$er&ead 8!22 E -.! E C:.!2) 1/./ ! Difference C .76! , Diff: LO: 11-! EOC: E11- 0 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
16 ) "atc&elder Hanufacturin( re)orted t&e followin( +ud(eted and actual fi(ures for one of its )roducts: Standard o$er&ead cost )er unit 81 &our at C .6! )er &our) Actual o$er&ead costs "ud(eted units Actual units )roduced C .6! C-. !2 6 ! /22
Oi$en t&is data. w&at is t&e total $aria+le o$er&ead $ariance for t&is )roduct< A) C1./22 fa$ora+le ") C1./22 unfa$ora+le C) C1. !/ fa$ora+le D) C1. !/ unfa$ora+le Answer: " E*)lanation: ") Actual o$er&ead C-. !2 Standard o$er&ead 8/22 E .6!) 1./!2 Difference 1./22 , Diff: LO: 11-! EOC: E11- 0 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
16-) Ca)ital Hanufacturin( desi(ns and manufactures +at&tu+s for &ome and commercial a))lications. Ca)ital recorded t&e followin( data for its commercial +at&tu+ )roduction line durin( t&e mont& of Harc&: Standard DL &ours )er tu+ Standard o$er&ead rate )er DL &our Standard o$er&ead cost )er unit Actual o$er&ead costs Actual DL &ours Actual o$er&ead cost )er mac&ine &our Actual tu+s )roduced C C/.!2 C1:.!2 .6!2 -. !2 C6.22 1.122
;&at is t&e $aria+le manufacturin( o$er&ead rate $ariance for Harc&< A) C1./ ! unfa$ora+le ") C- ! unfa$ora+le C) C1./ ! fa$ora+le D) C- ! fa$ora+le Answer: A E*)lanation: A) Naria+le HO4 rat $ariance B Actual 4ours E 8Actual #ate - Standard #ate) C1./ ! , B -. !2 E 8C6.22 - C/.!2) Diff: LO: 11-! EOC: E11- 0 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
160) Ca)ital Hanufacturin( desi(ns and manufactures +at&tu+s for &ome and commercial a))lications. Ca)ital recorded t&e followin( data for its commercial +at&tu+ )roduction line durin( t&e mont& of Harc&: Standard DL &ours )er tu+ Standard o$er&ead rate )er DL &our Standard o$er&ead cost )er unit Actual o$er&ead costs Actual DL &ours Actual o$er&ead cost )er mac&ine &our Actual tu+s )roduced C C/.!2 C1:.!2 .6!2 -. !2 C6.22 1.122
;&at is t&e $aria+le manufacturin( o$er&ead efficiency $ariance for Harc&< A) C1./ ! unfa$ora+le ") C- ! unfa$ora+le C) C1./ ! fa$ora+le D) C- ! fa$ora+le Answer: D E*)lanation: D) Naria+le HO4 efficiency $ariance B Standard #ate E 8Actual 4ours - Standard 4ours) C- ! F B C/.!2 E 8-. !2 - 81.122 E -)) Diff: LO: 11-! EOC: E11- 0 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 16!) %&e C&ilton Cor)oration s)ecialiQes in manufacturin( one ty)e of des' lam). C&ilton allocates $aria+le manufacturin( o$er&ead costs on t&e +asis of mac&ine &ours. C&ilton +ud(eted .! mac&ine &ours )er lam) and allocates o$er&ead at a rate of C1.72 )er mac&ine &our. Last year C&ilton manufactured -.222 lam)s. used 1-.722 mac&ine &ours and incurred actual o$er&ead costs of C1!.172. ;&at was C&iltonGs $aria+le manufacturin( o$er&ead rate $ariance last year< A) C0.102 fa$ora+le ") C0.102 unfa$ora+le C) C:.//2 fa$ora+le D) C:.//2 unfa$ora+le Answer: C E*)lanation: C) Naria+le HO4 rat $ariance B Actual 4ours E 8Actual #ate - Standard #ate) C:.//2 F B 1-.722 E 8C1.12 - C1.72) Diff: LO: 11-! EOC: E11- 0 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
16/) %&e C&ilton Cor)oration s)ecialiQes in manufacturin( one ty)e of des' lam). C&ilton allocates $aria+le manufacturin( o$er&ead costs on t&e +asis of mac&ine &ours. C&ilton +ud(eted .! mac&ine &ours )er lam) and allocates o$er&ead at a rate of C1.72 )er mac&ine &our. Last year C&ilton manufactured -.222 lam)s. used 1-.722 mac&ine &ours and incurred actual o$er&ead costs of C1!.172. ;&at was C&iltonGs $aria+le manufacturin( o$er&ead efficiency $ariance last year< A) C0.102 fa$ora+le ") C0.102 unfa$ora+le C) C:.//2 fa$ora+le D) C:.//2 unfa$ora+le Answer: " E*)lanation: ") Naria+le HO4 efficiency $ariance B Standard #ate E 8Actual 4ours - Standard 4ours) C0.102 , B C1.72 E 81-.722 - 8 -.222 E .!)) Diff: LO: 11-! EOC: E11- 0 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 166) Fa+ian Fa+rication mac&ines &ea$y-duty +ra'e rotors t&at are used on commercial airliners. Fa+ianGs mana(ement de$elo)ed t&e followin( standard costs: Standard direct la+or &ours )er rotor Standard o$er&ead rate )er direct la+or &our Actual acti$ity for Octo+er: Actual o$er&ead costs incurred Actual direct la+or &ours Actual rotors mac&ined C1-/.722 11.022 0.122 .02 C11. !
;&at is t&e total $aria+le manufacturin( o$er&ead $ariance for Octo+er< A) C /.122 unfa$ora+le ") C:2./6! unfa$ora+le C) C /.122 fa$ora+le D) C:2./6! fa$ora+le Answer: A E*)lanation: A) Actual o$er&ead C1-/.722 Standard o$er&ead 80.122 E .0 E C11. !) C112.622 Difference C /.122 , Diff: LO: 11-! EOC: E11- 0 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
:2 Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
167) Fa+ian Fa+rication mac&ines &ea$y-duty +ra'e rotors t&at are used on commercial airliners. Fa+ianGs mana(ement de$elo)ed t&e followin( standard costs: Standard direct la+or &ours )er rotor Standard o$er&ead rate )er direct la+or &our Actual acti$ity for Octo+er: Actual o$er&ead costs incurred Actual direct la+or &ours Actual rotors mac&ined C1-/.722 11.022 0.122 .02 C11. !
;&at is t&e $aria+le manufacturin( o$er&ead rate $ariance for Octo+er< A) C16.!!2 unfa$ora+le ") C7.!!2 unfa$ora+le C) C16.!!2 fa$ora+le D) C7.!!2 fa$ora+le Answer: " E*)lanation: ") Naria+le HO4 rat $ariance B Actual 4ours E 8Actual #ate - Standard #ate) C7.!!2 , B 11.022 E 88C1-/.722 > 11.022) - C11. !) Diff: LO: 11-! EOC: E11- 0 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
16:) Fa+ian Fa+rication mac&ines &ea$y-duty +ra'e rotors t&at are used on commercial airliners. Fa+ianGs mana(ement de$elo)ed t&e followin( standard costs: Standard direct la+or &ours )er rotor Standard o$er&ead rate )er direct la+or &our Actual acti$ity for Octo+er: Actual o$er&ead costs incurred Actual direct la+or &ours Actual rotors mac&ined C1-/.722 11.022 0.122 .02 C11. !
;&at is t&e $aria+le manufacturin( o$er&ead efficiency $ariance for Octo+er< A) C16.!!2 unfa$ora+le ") C7.!!2 unfa$ora+le C) C16.!!2 fa$ora+le D) C7.!!2 fa$ora+le Answer: A E*)lanation: A) Naria+le HO4 efficiency $ariance B Standard #ate E 8Actual 4ours - Standard 4ours) C16.!!2 , B C11. ! E 811.022 - 80.122 E .0)) Diff: LO: 11-! EOC: E11- 0 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 172) Dire Cor)oration uses t&e followin( standard costs for a sin(le unit of )roduct: Direct la+or 8-.! &ours M C1 .!2>&our) O$er&ead 8! &ours M C0. !>&our) C0-.6! C 1. !
Actual data for t&e mont& s&owed o$er&ead costs of C0 !.222 for .!22 units )roduced. ;&at is t&e difference +etween actual o$er&ead costs and standard o$er&ead costs allocated to )roducts< A) C- :.-6! fa$ora+le ") C- :.-6! unfa$ora+le C) C!-.1 ! fa$ora+le D) C!-.1 ! unfa$ora+le Answer: C E*)lanation: C) Actual o$er&ead C0 !.222 Standard o$er&ead 8 .!22 E C 1. !) 067.1 ! Difference !-.1 ! F Diff: LO: 11-! EOC: E11- 0 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. 171) Lu'a Com)any uses t&e followin( o$er&ead standard costs for a sin(le unit of )roduct: 6.! &ours at C1-.!2 )er &our. Actual data for t&e mont& s&owed o$er&ead costs of C1- .222 for 1.722 units )roduced. ;&at is t&e difference +etween actual o$er&ead costs and standard o$er&ead costs allocated to )roducts< A) C126.622 fa$ora+le : Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
") C126.622 unfa$ora+le C) C!2. !2 fa$ora+le D) C!2. !2 unfa$ora+le Answer: C E*)lanation: C) Standard o$er&ead cost )er unit Actual units )roduced O$er&ead allocated Actual o$er&ead Difference +etween actual and allocated If actual o$er&ead is less t&an allocated o$er&ead. t&en fa$ora+le. else unfa$ora+le
C121. ! 1.722 C17 . !2 C1- .222 C!2. !2 Fa$ora+le
Diff: LO: 11-! EOC: E11- 0 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances.
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17 ) Tummy-%ummy Foods &as t&e followin( information a+out its standards and )roduction acti$ity for Io$em+er: Actual manufacturin( o$er&ead cost incurred. C7!.222 Standard manufacturin( o$er&ead: Naria+le manufacturin( o$er&ead cost M C!.6! )er unit )roduced Fi*ed manufacturin( o$er&ead cost M C7.0! )er unit )roduced 8C70.!22>12.222 +ud(eted units) Actual units )roduced. 1 .222 Assume t&e allocation +ase for fi*ed o$er&ead costs is t&e num+er of units to +e )roduced. 4ow muc& are t&e standard o$er&ead costs allocated to actual )roduction< A) C162.022 ") C10 .222 C) C7!.222 D) C!6.!22 Answer: A E*)lanation: A) Standard $aria+le manufacturin( o$er&ead 8)er unit) C!.6! Standard fi*ed manufacturin( o$er&ead 8)er unit) C7.0! %otal standard o$er&ead cost )er unit C10. 2 Actual units )roduced 1 .222 Standard o$er&ead allocated to actual )roduction 162.022 Diff: LO: 11-! EOC: E11- 0 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis
17-) Crown Industries &as t&e followin( information a+out its standards and )roduction acti$ity for Decem+er: Actual manufacturin( o$er&ead cost incurred. C: .!22 Naria+le manufacturin( o$er&ead cost M C-. ! )er unit )roduced Fi*ed manufacturin( o$er&ead cost M C1.!2 )er unit )roduced 8C .!22>1!.222 +ud(eted units) Actual units )roduced. !.022 Assume t&e allocation +ase for fi*ed o$er&ead costs is t&e num+er of units to +e )roduced. 4ow muc& are t&e standard o$er&ead costs allocated to actual )roduction< A) C07.6!2 ") C: .!22 C) C61. !2 D) C !./!2 Answer: D E*)lanation: D)
Diff: LO: 11-! EOC: E11- 0 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis
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170) %&e standard $aria+le o$er&ead cost rate for t&e Oordon Com)any is C11. ! )er unit. "ud(eted fi*ed o$er&ead cost is C!2.222. %&e com)any +ud(eted !.222 units for t&e current )eriod and actually )roduced 0.1!2 finis&ed units. ;&at is t&e fi*ed o$er&ead $olume $ariance< Assume t&e allocation +ase for fi*ed o$er&ead costs is t&e num+er of units e*)ected to +e )roduced. A) C-.672 fa$ora+le ") C .122 unfa$ora+le C) C .122 fa$ora+le D) C-.672 unfa$ora+le Answer: D E*)lanation: D)
Diff: LO: 11-! EOC: E11- 0 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
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17!) %&e standard $aria+le o$er&ead cost rate for 4arris Hanufacturin( is C 0 )er unit. "ud(eted fi*ed o$er&ead cost is 0 .222. 4arris Hanufacturin( +ud(eted -.722 units for t&e current )eriod and actually )roduced -.:22 finis&ed units. ;&at is t&e fi*ed o$er&ead $olume $ariance< Assume t&e allocation +ase for fi*ed o$er&ead costs is t&e num+er of units e*)ected to +e )roduced. A) C .022 fa$ora+le ") C1.12! fa$ora+le C) C .022 unfa$ora+le D) C1.12! unfa$ora+le Answer: " E*)lanation: ") Standard $aria+le o$er&ead rate C 0.22 Actual )roduction -.:22 Naria+le o$er&ead allocated to actual )roduction C:-./22 "ud(eted fi*ed o$er&ead C0 .222 Fle*i+le +ud(et o$er&ead for actual )roduction C1-!./22 "ud(eted fi*ed o$er&ead "ud(eted unit )roduction "ud(eted fi*ed o$er&ead )er unit Standard $aria+le o$er&ead rate O$er&ead to +e allocated )er unit )roduced Actual )roduction Standard o$er&ead allocated to )roduction C0 .222 -.722 C11.2! C 0.22 C-!.2! -.:22 C1-/.62!
17/) Lennin(s Hanufacturin( (at&ered t&e followin( fle*i+le +ud(et information: 3ercent of normal ca)acity Standard direct la+or &ours %otal +ud(eted $aria+le o$er&ead cost %otal +ud(eted fi*ed o$er&ead cost 72D /0.222 C117.222 C122.222 122D 62.222 C1-2.222 C122.222
4ow muc& is t&e total +ud(eted o$er&ead cost at :2D of normal ca)acity< A) C -2.222 ") C122.222 C) C 16.222 D) C 26.222 Answer: C E*)lanation: C) Standard direct la+or &ours at 122D of ca)acity 62.222 %ar(et D of ca)acity :2D Direct la+or &ours at tar(et D of ca)acity /-.222 %otal +ud(eted $aria+le manufacturin( o$er&ead Standard direct la+or &ours Naria+le manufacturin( o$er&ead )er unit 8same at all le$els) Direct la+or &ours at tar(et D of ca)acity Naria+le manufacturin( o$er&ead at tar(et D ca)acity %otal +ud(eted fi*ed manufacturin( o$er&ead %otal +ud(eted manufacturin( o$er&ead at tar(et ca)acity C1-2.222 62.222 C1.7/ /-.222 C116.222 C122.222 C 16.222
176) Litc&field Industries (at&ered t&e followin( information for t&e mont& ended Lune -1: %&e static +ud(et $olume is !.!22 units: O$er&ead fle*i+le +ud(et: Ium+er of units Standard mac&ine &ours "ud(eted $aria+le o$er&ead costs: "ud(eted fi*ed o$er&ead costs: :.222 1-.222 C!2.222 C-!.6!2 12.222 10.!22 C!/.222 C-!.6!2 11.222 1/.222 C/ .222 C-!.6!2
Actual )roduction was 1 .222 units. Actual o$er&ead costs were C 7.222 for $aria+le costs and C-6.222 for fi*ed costs. Actual mac&ine &ours wor'ed were 1/.222 &ours. ;&at is t&e fi*ed o$er&ead $olume $ariance< 8Assume t&e allocation +ase for fi*ed o$er&ead costs is mac&ine &ours.) A) C0 . !2 unfa$ora+le ") C0 . !2 fa$ora+le C) C-/.022 unfa$ora+le D) C-/.022 fa$ora+le Answer: "
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E*)lanation: ") Standard mac&ine &ours Ium+er of units Standard mac&ine &ours )er unit )roducedJsame at all le$els "ud(eted $aria+le o$er&ead costs: Standard mac&ine &ours Naria+le manufacturin( o$er&ead )er &ourJsame at all le$els Static +ud(et $olume Standard mac&ine &ours )er unit )roducedJsame at all le$els Standard mac&ine &ours at static +ud(et $olume "ud(eted fi*ed o$er&ead costs: Fi*ed manufacturin( o$er&ead )er &our at static +ud(et $olume 8+ud(eted fi*ed o$er&ead cost > standard mac&ine &ours at static $olume) Actual )roduction Standard mac&ine &ours )er unit )roducedJsame at all le$els Hac&ine &ours at actual )roduction Naria+le manufacturin( o$er&ead )er &ourJsame at all le$els Naria+le o$er&ead cost "ud(eted fi*ed o$er&ead costs: Fle*i+le +ud(et o$er&ead for actual out)ut Actual )roduction Standard mac&ine &ours )er unit )roducedJsame at all le$els Hac&ine &ours at actual )roduction Naria+le manufacturin( o$er&ead )er &ourJsame at all le$els Fi*ed manufacturin( o$er&ead at static +ud(et $olume %otal o$er&ead )er &our Standard o$er&ead allocated to )roduction 8mac&ine &ours E total o$er&ead )er &our) Fle*i+le +ud(et o$er&ead for actual out)ut Standard o$er&ead allocated to )roduction Nolume $ariance If fle*i+le +ud(et o$er&ead is less t&an standard o$er&ead allocated. t&en fa$ora+le. else unfa$ora+le
10.!22 12.222 1.0! C!/.222 10.!22 C-.7/ !.!22 1.0! 6.:6! C-!.6!2 C0.07 1 .222 1.0! 16.022 C-.7/ C/6. 22 C-!.6!2 C12 .:!2 1 .222 1.0! 16.022 C-.7/ C0.07 C7.-0 C10!. 22 C12 .:!2 C10!. 22 C0 . !2 Fa$ora+le
Diff: LO: 11-! EOC: E11- 0 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 177) Litc&field Industries (at&ered t&e followin( information for t&e mont& ended Lune -1: %&e static +ud(et $olume is !.!22 units: O$er&ead fle*i+le +ud(et:
Ium+er of units Standard mac&ine &ours "ud(eted $aria+le o$er&ead costs: "ud(eted fi*ed o$er&ead costs:
:.222 1-.222 C!2.222 C-!.6!2
12.222 10.!22 C!/.222 C-!.6!2
11.222 1/.222 C/ .222 C-!.6!2
Actual )roduction was 1 .222 units. Actual o$er&ead costs were C 7.222 for $aria+le costs and C-6.222 for fi*ed costs. Actual mac&ine &ours wor'ed were 1/.222 &ours. ;&at is t&e standard $aria+le o$er&ead rate )er mac&ine &our< A) C-.!2 ") C0.-1 C) C .06 D) C-.7/ Answer: D E*)lanation: D) C !/.222>10.!22 B C-.7/ Diff: LO: 11-! EOC: E11- 0 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 17:) On t&e line in front of eac& $ariance. )ut t&e letter of t&e de)artment t&at is most li'ely res)onsi+le for t&at $ariance. A letter may +e used more t&an once or not at all. A. ". C. D. 3roduction de)artment Har'etin( de)artment 3urc&asin( de)artment 3ersonnel de)artment
9999 Direct la+or rate $ariance 9999 Direct material )rice $ariance 9999 Sales $olume $ariance 9999 Direct la+or efficiency $ariance 9999 Direct material 5uantity $ariance Answer: D. C. ". A. A Diff: LO: 11-! EOC: E11- ! AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1:2) On t&e line in front of eac& $ariance. enter t&e letters of t&e items needed to com)ute t&at $ariance. Tou will enter more t&an one item on eac& line. A. ". C. D. Standard o$er&ead allocated to )roduction Fle*i+le +ud(et o$er&ead for actual num+er of out)uts Actual $aria+le o$er&ead cost Fi*ed o$er&ead costs
999999 O$er&ead fle*i+le +ud(et $ariance 999999 3roduction $olume $ariance 121 Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
Answer: ". C. D O$er&ead fle*i+le +ud(et $ariance A. " 3roduction $olume $ariance Diff: LO: 11-! EOC: E11- 0 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. 1:1) Lam)Li(&t Industries (at&ered t&e followin( information for t&e mont& of Luly: O$er&ead fle*i+le +ud(et: Ium+er of units Standard mac&ine &ours "ud(eted $aria+le o$er&ead costs: "ud(eted fi*ed o$er&ead costs: 12.222 1-.!22 C-2.222 C!-. !2 1-.222 16.!22 C :.222 C!-.!22 1/.222 1.!22 C07.222 C/-.222
Lam)Li(&t actually )roduced 10.222 units in 16.!22 mac&ine &ours. %otal actual o$er&ead cost of C7!.!22 consisted of C-!.222 $aria+le costs and C!2.!22 fi*ed costs. %&e standard $aria+le and fi*ed o$er&ead rates are +ased on a master 8static) +ud(et of 1!.222 units. Assume t&e allocation +ase for fi*ed o$er&ead costs is t&e num+er of units. A. Com)ute t&e total manufacturin( o$er&ead cost $ariance. ". Com)ute t&e o$er&ead fle*i+le +ud(et $ariance. C. Com)ute t&e )roduction $olume $ariance.
Answer: SOL,%IOI A "ud(eted $aria+le o$er&ead costs: Ium+er of units Naria+le manufacturin( o$er&ead )er unitJsame at all le$els "ud(eted fi*ed o$er&ead costs: Static +ud(et $olume Fi*ed manufacturin( o$er&ead )er unit at static $olume Actual )roduction Naria+le manufacturin( o$er&ead )er unitJsame at all le$els %otal $aria+le o$er&ead for actual )roduction Static +ud(et $olume Fi*ed manufacturin( o$er&ead )er unit at static $olume Fi*ed manufacturin( o$er&ead Fle*i+le +ud(et o$er&ead for actual )roduction 8total $aria+le A fi*ed) Naria+le manufacturin( o$er&ead )er unitJsame at all le$els Fi*ed manufacturin( o$er&ead )er unit at static $olume O$er&ead )er unit to +e allocated Actual )roduction Standard o$er&ead allocated to )roduction
C-2.222 12.222 C-.22 C!-. !2 1!.222 C-.!! 10.222 C-.22 C0 .222 1!.222 C-.!! C!-. !2 C:!. !2 C-.22 C-.!! C/.!! 10.222 C:1.622
Actual $aria+le o$er&ead cost C-!.222 Actual fi*ed o$er&ead costs C!2.!22 %otal actual o$er&ead C7!.!22 Standard o$er&ead allocated to )roduction C:1.622 %otal manufacturin( o$er&ead $ariance C/. 22 If actual o$er&ead is less t&an standard o$er&ead allocated to )roduction. t&en fa$ora+le. else unfa$ora+le Fa$ora+le SOL,%IOI " Actual $aria+le o$er&ead cost C-!.222 Actual fi*ed o$er&ead costs C!2.!22 %otal actual o$er&ead C7!.!22 Fle*i+le +ud(et o$er&ead for actual )roduction 8total $aria+le A fi*ed) C:!. !2 O$er&ead fle*i+le +ud(et $ariance C:.6!2 If actual o$er&ead is less t&an fle*i+le +ud(et o$er&ead t&en fa$ora+le. else unfa$ora+le Fa$ora+le SOL,%IOI C Fle*i+le +ud(et o$er&ead for actual )roduction 8total $aria+le A fi*ed) C:!. !2 Standard o$er&ead allocated to )roduction C:1.622 3roduction $olume $ariance C-.!!2 If fle*i+le +ud(et o$er&ead is less t&an standard o$er&ead allocated. t&en fa$ora+le. else unfa$ora+le ,nfa$ora+le Diff: LO: 11-! EOC: E11- 0 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 12Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
1: ) %&e "erwin Com)any esta+lis&ed a master +ud(et $olume of -!.222 units for A)ril. Actual o$er&ead costs incurred amounted to C:7.!22. Actual )roduction for t&e mont& was -0.222 units. %&e standard $aria+le o$er&ead rate was C1.6! )er direct la+or &our. %&e standard fi*ed o$er&ead rate was C1.!2 )er direct la+or &our. One direct la+or &our is t&e standard 5uantity )er finis&ed unit. Assume t&e allocation +ase for fi*ed o$er&ead costs is t&e num+er of direct la+or &ours. A. Com)ute t&e total manufacturin( o$er&ead cost $ariance. ". Com)ute t&e o$er&ead fle*i+le +ud(et $ariance. C. Com)ute t&e )roduction $olume $ariance. Answer: SOL,%IOI A Actual )roduction Standard $aria+le manufacturin( o$er&ead rate )er direct la+or &our Naria+le manufacturin( o$er&ead Static +ud(et $olume Standard fi*ed manufacturin( o$er&ead rate )er direct la+or &our Fi*ed manufacturin( o$er&ead Fle*i+le +ud(et for actual )roduction 8$aria+le A fi*ed) Actual )roduction Standard $aria+le manufacturin( o$er&ead rate )er direct la+or &our Naria+le manufacturin( o$er&ead Actual )roduction Standard fi*ed manufacturin( o$er&ead rate )er direct la+or &our Fi*ed manufacturin( o$er&ead Standard o$er&ead allocated to )roduction Actual o$er&ead Standard o$er&ead allocated to )roduction %otal manufacturin( o$er&ead $ariance If actual o$er&ead is less t&an allocated o$er&ead. t&en fa$ora+le. else unfa$ora+le SOL,%IOI " Actual o$er&ead Fle*i+le +ud(et for actual )roduction 8$aria+le A fi*ed) O$er&ead fle*i+le +ud(et $ariance If actual o$er&ead is less t&an fle*i+le +ud(et o$er&ead. t&en fa$ora+le. else unfa$ora+le SOL,%IOI C Standard o$er&ead allocated to )roduction Fle*i+le +ud(et for actual )roduction 8$aria+le A fi*ed) 3roduction $olume $ariance If fle*i+le +ud(et o$er&ead is less t&an standard o$er&ead. t&en fa$ora+le. else unfa$ora+le
-0.222 C1.6! C!:.!22 -!.222 C1.!2 C! .!22 C11 .222 -0.222 C1.6! C!:.!22 -0.222 C1.!2 C!1.222 C112.!22 C:7.!22 C112.!22 C1 .222 Fa$ora+le C:7.!22 C11 .222 C1-.!22 Fa$ora+le C112.!22 C11 .222 C1.!22 ,nfa$ora+le
Diff: LO: 11-! EOC: E11- 0 AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 120 Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
1:-) If )roduction remains wit&in t&e rele$ant ran(e for t&e )eriod. fi*ed costs are e*)ected to remain fi*ed. Answer: %#,E Diff: 1 LO: 11-/ EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1:0) %&e fi*ed o$er&ead +ud(et $ariance measures t&e difference +etween t&e actual fi*ed o$er&ead costs incurred and t&e +ud(eted fi*ed o$er&ead costs. Answer: %#,E Diff: 1 LO: 11-/ EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1:!) %&e cause of a fi*ed o$er&ead $ariance. suc& as an unantici)ated increase or decrease in )ro)erty ta*es for t&e factory. is always under t&e control of mana(ement. Answer: FALSE Diff: 1 LO: 11-/ EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1:/) If t&e actual num+er of units manufactured is less t&an t&e num+er of units antici)ated to +e manufactured. t&en t&e fi*ed o$er&ead $olume $ariance will always +e unfa$ora+le. Answer: %#,E Diff: 1 LO: 11-/ EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
1:6) %&e two fi*ed o$er&ead $ariances are t&e A) +ud(et and $olume $ariances. ") rate and efficiency $ariances. C) )rice and usa(e $ariances. D) rate and $olume $ariances. Answer: A Diff: 1 LO: 11-/ EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1:7) ;&at ty)e of $ariance results w&en t&e actual fi*ed o$er&ead costs incurred are (reater t&an t&e +ud(eted fi*ed o$er&ead costs< A) Fa$ora+le fi*ed o$er&ead +ud(et $ariance ") ,nfa$ora+le fi*ed o$er&ead +ud(et $ariance C) Fa$ora+le fi*ed o$er&ead $olume $ariance D) ,nfa$ora+le fi*ed o$er&ead $olume $ariance Answer: " Diff: 1 LO: 11-/ EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1::) 4ow is t&e fi*ed o$er&ead +ud(et $ariance calculated< A) %&e difference +etween t&e standard fi*ed o$er&ead rate and t&e actual fi*ed o$er&ead rate multi)lied +y t&e actual &ours used ") %&e difference +etween t&e standard fi*ed o$er&ead costs allocated and t&e +ud(eted fi*ed o$er&ead costs C) %&e difference +etween t&e actual fi*ed o$er&ead costs incurred and t&e +ud(eted fi*ed o$er&ead costs D) %&e difference +etween t&e actual fi*ed o$er&ead costs incurred and t&e standard fi*ed o$er&ead costs allocated Answer: C Diff: 1 LO: 11-/ EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
22) 4ow is t&e fi*ed o$er&ead $olume $ariance calculated< A) %&e difference +etween t&e standard fi*ed o$er&ead rate and t&e actual fi*ed o$er&ead rate multi)lied +y t&e actual &ours used ") %&e difference +etween t&e standard fi*ed o$er&ead costs allocated and t&e +ud(eted fi*ed o$er&ead costs C) %&e difference +etween t&e actual fi*ed o$er&ead costs incurred and t&e +ud(eted fi*ed o$er&ead costs D) %&e difference +etween t&e actual fi*ed o$er&ead costs incurred and t&e standard fi*ed o$er&ead costs allocated Answer: " Diff: 1 LO: 11-/ EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. 21) ;&ic& of t&e followin( e*am)les would lead directly to a fa$ora+le fi*ed o$er&ead $olume $ariance< A) A decrease in county )ro)erty ta*es for t&e factory ") 3roducin( more units t&an antici)ated C) A decrease in wa(es )aid to factory maintenance wor'ers D) #ecei$in( a $olume discount on indirect materials )urc&ased Answer: " Diff: 1 LO: 11-/ EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 2 ) ;&at could cause a sales $olume $ariance for fi*ed e*)enses< A) Insurance costs on t&e factory rise une*)ectedly durin( t&e year due to a crisis in t&e insurance industry. ") %&e union calls for a stri'e of factory wor'ers and tem)orary wor'ers are &ired to fill in for t&e stri'in( em)loyees. C) %&e lease on t&e manufacturin( facility is rene(otiated and t&e lease )ayments increase durin( t&e year. D) %&e num+er of units actually sold falls wit&in a different rele$ant ran(e t&an t&e static +ud(et sales $olume. Answer: D Diff: 1 LO: 11-/ EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
2-) S&amroc' Hanufacturin( +ud(eted fi*ed o$er&ead costs of C .6! )er unit at an antici)ated )roduction le$el of 1.-!2 units. In Luly S&amroc' incurred actual fi*ed o$er&ead costs of C0.022 and actually )roduced 1.-22 units. ;&at is S&amroc'Gs fi*ed o$er&ead +ud(et $ariance for Luly< A) C/76.!2 fa$ora+le ") C/76.!2 unfa$ora+le C) C7 !.22 fa$ora+le D) C7 !.22 unfa$ora+le Answer: " E*)lanation: ") Fi*ed HO4 "ud(et Nariance B Actual fi*ed o$er&ead costs - "ud(eted fi*ed o$er&ead costs C/76.!2 , B C0.022 - 8C .6! E 1.-!2) Diff: 1 LO: 11-/ EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 20) S&amroc' Hanufacturin( +ud(eted fi*ed o$er&ead costs of C .6! )er unit at an antici)ated )roduction le$el of 1.-!2 units. In Luly S&amroc' incurred actual fi*ed o$er&ead costs of C0.022 and actually )roduced 1.-22 units. ;&at is S&amroc'Gs fi*ed o$er&ead $olume $ariance for Luly< A) C/76.!2 fa$ora+le ") C/76.!2 unfa$ora+le C) C1-6.!2 fa$ora+le D) C1-6.!2 unfa$ora+le Answer: D E*)lanation: D) Fi*ed HO4 Nolume $ariance B "ud(eted fi*ed o$er&ead - fi*ed o$er&ead allocated C1-6.!2 , B 8C .6! - 1.-!2) - 8C .6! E 1.-22) Diff: 1 LO: 11-/ EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
2!) %&e 3erry Cor)oration recorded t&e followin( +ud(eted and actual information relatin( to fi*ed o$er&ead costs for its V-Line of )roducts: Standard fi*ed o$er&ead )er direct la+or &our Standard direct la+or &ours )er unit "ud(eted )roduction "ud(eted fi*ed o$er&ead costs Actual )roduction in units Actual fi*ed o$er&ead costs incurred C0.!2 2. ! -. !2 C-./!/. ! -.022 C .:22.22
;&at is 3erryGs fi*ed manufacturin( o$er&ead +ud(et $ariance< A) C6!/. ! unfa$ora+le ") C1/7.6! unfa$ora+le C) C6!/. ! fa$ora+le D) C1/7.6! fa$ora+le Answer: C E*)lanation: C) Fi*ed HO4 "ud(et Nariance B Actual fi*ed o$er&ead costs - "ud(eted fi*ed o$er&ead costs C6!/. ! F B C .:22 - C-./!/. ! Diff: 1 LO: 11-/ EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
2/) %&e 3erry Cor)oration recorded t&e followin( +ud(eted and actual information relatin( to fi*ed o$er&ead costs for its V-Line of )roducts: Standard fi*ed o$er&ead )er direct la+or &our Standard direct la+or &ours )er unit "ud(eted )roduction "ud(eted fi*ed o$er&ead costs Actual )roduction in units Actual fi*ed o$er&ead costs incurred C0.!2 2. ! -. !2 C-./!/. ! -.022 C .:22.22
;&at is 3erryGs fi*ed manufacturin( o$er&ead $olume $ariance< A) C6!/. ! unfa$ora+le ") C1/7.6! unfa$ora+le C) C6!/. ! fa$ora+le D) C1/7.6! fa$ora+le Answer: D E*)lanation: D) Fi*ed HO4 Nolume $ariance B "ud(eted fi*ed o$er&ead - fi*ed o$er&ead allocated C1/7.6! F B C-./!/. ! - 8C0.!2 E . ! E -.022) Diff: 1 LO: 11-/ EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
26) Sc&enley Hanufacturin( +uilds )lay(round e5ui)ment t&at it sells to elementary sc&ools and munici)alities. Sc&enleyGs mana(ement &as contracted you to )erform a $ariance analysis on t&e fi*ed manufacturin( o$er&ead for its line of slides. Sc&enleyGs cost accountin( team informs you t&at it allocates fi*ed o$er&ead +ased on mac&ine &ours. %&is )eriod )roduction was +ud(eted at -6! slides. "ud(eted and actual )roduction data follows: Standard fi*ed o$er&ead cost )er mac&ine &our Standard mac&ine &ours )er slide Actual )roduction Actual fi*ed o$er&ead cost C11 / -:! C 6.!22
;&at is t&e fi*ed manufacturin( o$er&ead +ud(et $ariance for t&is )eriod< A) C .6!2 unfa$ora+le ") C1.- 2 unfa$ora+le C) C .6!2 fa$ora+le D) C1.- 2 fa$ora+le Answer: A E*)lanation: A) Fi*ed HO4 "ud(et Nariance B Actual fi*ed o$er&ead costs - "ud(eted fi*ed o$er&ead costs C .6!2 , B C 6.!22 - 8C11 E / E -6!) Diff: 1 LO: 11-/ EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
27) Sc&enley Hanufacturin( +uilds )lay(round e5ui)ment t&at it sells to elementary sc&ools and munici)alities. Sc&enleyGs mana(ement &as contracted you to )erform a $ariance analysis on t&e fi*ed manufacturin( o$er&ead for its line of slides. Sc&enleyGs cost accountin( team informs you t&at it allocates fi*ed o$er&ead +ased on mac&ine &ours. %&is )eriod )roduction was +ud(eted at -6! slides. "ud(eted and actual )roduction data follows: Standard fi*ed o$er&ead cost )er mac&ine &our Standard mac&ine &ours )er slide Actual )roduction Actual fi*ed o$er&ead cost C11 / -:! C 6.!22
;&at is t&e fi*ed manufacturin( o$er&ead $olume $ariance for t&is )eriod< A) C .6!2 unfa$ora+le ") C1.- 2 unfa$ora+le C) C .6!2 fa$ora+le D) C1.- 2 fa$ora+le Answer: D E*)lanation: D) Fi*ed HO4 Nolume $ariance B "ud(eted fi*ed o$er&ead - fi*ed o$er&ead allocated C1.- 2 F B 8C11 E / E -6!) - 8C11 E / E -:!) Diff: 1 LO: 11-/ EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 2:) Ietwor' Enter)rises incurred actual fi*ed manufacturin( o$er&ead costs of C .722 for t&e mont& of Se)tem+er. If t&e fi*ed manufacturin( o$er&ead +ud(et $ariance was a fa$ora+le C/.622 w&at were t&e +ud(eted fi*ed o$er&ead costs< A) C/.622 ") C :.!22 C) C1/.122 D) C .722 Answer: " E*)lanation: ") Fi*ed HO4 "ud(et Nariance B Actual fi*ed o$er&ead costs - "ud(eted fi*ed o$er&ead costs C/.622 F B C .722 - * * B C :.!22 Diff: 1 LO: 11-/ EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
12) #i$er Hills manufactures re)roduction anti5ue furniture usin( &istoric manufacturin( met&ods. #i$er often uses water)ower. w&ic& is not only &istorically accurate. +ut also sa$es ener(y costs. Alt&ou(& #i$er uses oldfas&ioned manufacturin( tec&ni5ues it is still a modern com)any t&at )erforms modern +usiness analysis. #i$er incurred actual fi*ed manufacturin( o$er&ead costs of C 7/.222. ,sin( standard costin(. #i$er allocated C !.222 in fi*ed manufacturin( o$er&ead costs. If #i$er o+ser$ed a C .1 ! unfa$ora+le fi*ed manufacturin( o$er&ead $olume $ariance. w&at amount &ad mana(ement +ud(eted for fi*ed manufacturin( o$er&ead< A) C .760 ") C 77.1 ! C) C 7-.76! D) C 6.1 ! Answer: D E*)lanation: D) Fi*ed HO4 Nolume $ariance B "ud(eted fi*ed o$er&ead - fi*ed o$er&ead allocated C .1 ! , B C 6.1 ! - C !.222 Diff: 1 LO: 11-/ EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 11) C&annel One Industries uses a standard costin( system to a))ly manufacturin( costs to its )roduction )rocess. In Hay. C&annel One antici)ated )roducin( .0!2 units wit& fi*ed manufacturin( o$er&ead costs allocated at C6.02 )er direct la+or &our wit& a standard of 1.! direct la+or &ours )er unit. In Hay. actual )roduction was -. 22 units and actual fi*ed manufacturin( o$er&ead costs were C -.222. ;&at was C&annel OneGs fi*ed manufacturin( o$er&ead $olume $ariance for Hay< A) C0.1:! fa$ora+le ") C0.1:! unfa$ora+le C) C7.- ! fa$ora+le D) C7.- ! unfa$ora+le Answer: C E*)lanation: C) Fi*ed HO4 Nolume $ariance B "ud(eted fi*ed o$er&ead - fi*ed o$er&ead allocated C7.- ! F B 8C6.02 E 1.! E .0!2) - 8C6.02 E 1.! E -. 22) Diff: 1 LO: 11-/ EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances
1 ) C&annel One Industries uses a standard costin( system to a))ly manufacturin( costs to its )roduction )rocess. In Hay. C&annel One antici)ated )roducin( .0!2 units wit& fi*ed manufacturin( o$er&ead costs allocated at C6.02 )er direct la+or &our wit& a standard of 1.! direct la+or &ours )er unit. In Hay. actual )roduction was -. 22 units and actual fi*ed manufacturin( o$er&ead costs were C -.222. ;&at was C&annel OneGs fi*ed manufacturin( o$er&ead +ud(et $ariance for Hay< A) C0.1:! fa$ora+le ") C0.1:! unfa$ora+le C) C7.- ! fa$ora+le D) C7.- ! unfa$ora+le Answer: A E*)lanation: A) Fi*ed HO4 "ud(et Nariance B Actual fi*ed o$er&ead costs - "ud(eted fi*ed o$er&ead costs C0.1:! F B C -.222 - 8C6.02 E 1.! E .0!2) Diff: 1 LO: 11-/ EOC: E11-1: AACS": Analytical %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances 1-) If a com)any reco(niQes $ariances at t&e earliest )oint )ossi+le. raw materials in$entory will +e de+ited for t&e actual 5uantity of raw materials )urc&ased and costed at t&e actual )rice )aid )er unit. Answer: FALSE Diff: 1 LO: 11-6 EOC: S11-1 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 10) A de+it +alance in t&e direct materials )rice $ariance indicates t&e standard cost of materials was less t&an t&e actual cost of materials. Answer: %#,E Diff: 1 LO: 11-6 EOC: S11-1 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. 1!) A credit +alance means t&at a $ariance is unfavorable since it decreases income 8@ust li'e a re$enue). Answer: FALSE Diff: 1 LO: 11-6 EOC: S11-1AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis
1/) Lust as in @o+ costin(. t&e manufacturin( costs flow t&rou(& t&e in$entory accounts in t&e followin( order: raw materials W wor' in )rocess W cost of (oods sold W finis&ed (oods. Answer: FALSE Diff: 1 LO: 11-6 EOC: S11-1AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 16) A standard cost income statement s&ows cost of (oods sold at standard and actual cost. Answer: %#,E Diff: 1 LO: 11-6 EOC: E11--1 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 17) ;&en a com)any uses direct materials. t&e amount of t&e de+it to ;or' in 3rocess In$entory is +ased on t&e standard 5uantity of t&e materials t&at s&ould &a$e +een used times t&e standard )rice )er unit of t&e materials. Answer: %#,E Diff: 1 LO: 11-6 EOC: E11--1 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. 1:) %&e entry to allocate manufacturin( o$er&ead costs to )roduction in$ol$es w&ic& of t&e followin(< A) De+it to wor' in )rocess in$entory for t&e actual cost of o$er&ead ") Credit to wor' in )rocess in$entory for t&e standard rate of o$er&ead times t&e standard 5uantity of t&e allocation +ase allowed for actual out)ut C) Credit to wor' in )rocess in$entory for t&e actual cost of o$er&ead D) De+it to wor' in )rocess in$entory for t&e standard rate of o$er&ead times t&e standard 5uantity of t&e allocation +ase allowed for actual out)ut Answer: D Diff: LO: 11-6 EOC: E11- 1 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis
2) ;or' in )rocess in$entory is de+ited for w&ic& of t&e followin( w&en recordin( t&e use of direct materials in t&e )roduction )rocess< A) Standard 5uantity of direct materials used for actual )roduction out)ut times actual cost )er )ound ") Standard 5uantity of direct materials used for actual )roduction out)ut times standard cost )er )ound C) Actual 5uantity of direct materials used times standard cost )er )ound D) Actual 5uantity of direct materials used times actual cost )er )ound Answer: " Diff: LO: 11-6 EOC: E11- 1 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 1) #aw materials in$entory is credited for w&ic& of t&e followin( w&en recordin( t&e use of direct materials in t&e )roduction )rocess< A) Standard 5uantity of direct materials used for actual )roduction times actual cost )er )ound ") Standard 5uantity of direct materials used for actual )roduction times standard cost )er )ound C) Actual 5uantity of direct materials )ut into )roduction times actual cost )er )ound D) Actual 5uantity of direct materials )ut into )roduction times standard cost )er )ound Answer: D Diff: LO: 11-6 EOC: E11- 1 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis ) ;&ic& of t&e followin( s&ows t&e effect on wor' in )rocess in$entory w&en assi(nin( direct la+or costs to t&e )roduction )rocess< A) De+ited for standard 5uantity of direct la+or used for actual )roduction times standard cost )er &our ") De+ited for actual 5uantity of direct la+or times standard cost )er &our C) Credited for standard 5uantity of direct la+or used for actual )roduction times standard cost )er &our D) Credited for standard 5uantity usa(e of direct la+or for actual )roduction times actual cost )er &our Answer: A Diff: LO: 11-6 EOC: E11- 1 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis
-) Cost of (oods sold is s&own at w&ic& of t&e followin( on a standard cost income statement< A) Standard cost ") Actual cost C) Ieit&er A nor " D) "ot& A and " Answer: D Diff: LO: 11-6 EOC: E11--1 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis 0) #e(ardin( a standard cost income statement. w&ic& of t&e followin( is true< A) O)eratin( income is s&own at standard cost. ") Nariances are listed se)arately. C) Cost of (oods sold is s&own only at standard cost. D) Sales re$enue is s&own only at standard re$enue. Answer: " Diff: LO: 11-6 EOC: E11--1 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis !) %&e 99999999 de)artment would most li'ely +e res)onsi+le for a Kdirect material )rice $ariance.K A) )roduction ") mar'etin( C) )ersonnel D) )urc&asin( Answer: D Diff: LO: 11-6 EOC: E11- 1 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances.
/) %&e 99999999 de)artment would most li'ely +e res)onsi+le for a Kdirect la+or rate $ariance.K A) finance ") mar'etin( C) )ersonnel D) )urc&asin( Answer: C Diff: LO: 11-6 EOC: E11- 1 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. 6) %&e 99999999 de)artment would most li'ely +e res)onsi+le for a Kdirect la+or efficiency $ariance.K A) mar'etin( ") )roduction C) )urc&asin( D) )ersonnel Answer: " Diff: LO: 11-6 EOC: E11- 1 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances. 7) %&e 99999999 de)artment would most li'ely +e res)onsi+le for a Ksales $olume $ariance.K A) mar'etin( ") )roduction C) )urc&asin( D) )ersonnel Answer: A Diff: LO: 11-6 EOC: E11- 1 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances.
:) ;&ic& term +elow is +est )aired wit& Ka summariQed +ud(et t&at can easily +e com)uted for se$eral $olume le$elsK< A) Fle*i+le +ud(et ") Sales $olume $ariance C) "enc&mar'in( D) O$er&ead fle*i+le +ud(et $ariance Answer: A Diff: LO: 11-6 EOC: S11-1 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis -2) ;&ic& term +elow is +est )aired wit& K%&e difference +etween t&e actual o$er&ead cost incurred and t&e fle*i+le +ud(et amount of o$er&ead cost for actual num+er of out)utK< A) Sales $olume $ariance ") Fle*i+le +ud(et C) O$er&ead fle*i+le +ud(et $ariance D) "enc&mar'in( Answer: C Diff: LO: 11-6 EOC: E11--1 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss and calculate direct material. direct la+or and o$er&ead $ariances -1) A8n) 99999999 Karises +ecause t&e num+er of units actually sold differs from t&e static +ud(et units.K A) fle*i+le +ud(et ") sales $olume $ariance C) +enc&mar'in( D) o$er&ead fle*i+le +ud(et $ariance Answer: " Diff: LO: 11-6 EOC: E11--1 AACS": #eflecti$e %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis
- ) CostanQa Hanufacturin( (at&ered t&e followin( information for t&e year ended Decem+er -1: Actual sales Standard sales Standard cost of (oods sold Direct material )rice $ariance Direct material 5uantity $ariance Direct la+or rate $ariance Direct la+or efficiency $ariance O$er&ead fle*i+le +ud(et $ariance 3roduction $olume $ariance Sellin( and Administrati$e C 7!.222 C 7!.222 C 22.222 C0. 22 C:22 C-.222 C:22 C . !2 C-.222 C!!.222
,nfa$ora+le ,nfa$ora+le Fa$ora+le ,nfa$ora+le ,nfa$ora+le Fa$ora+le
3re)are a standard cost income statement for CostanQa for t&e year ended Decem+er -1. Answer: CostanQa Hanufacturin( Standard Cost Income Statement Tear Ended Decem+er -1 Standard cost income statement Actual sales Standard cost of (oods sold Nariances Direct material )rice $ariance Direct material 5uantity $ariance Direct la+or rate $ariance Direct la+or efficiency $ariance O$er&ead fle*i+le +ud(et $ariance 3roduction $olume $ariance Cost of (oods sold at actual cost Oross Har(in Sellin( and Administrati$e O)eratin( income
C 7!.222 C 22.222 C0. 22 C:22 C8-.222) C:22 C . !2 C8-.222) C 2 . !2 C7 .6!2 C!!.222 C 6.6!2
Diff: LO: 11-6 EOC: E11--1 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis
1 2 Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
--) Standard 3roducts Com)any reco(niQes $ariances from standards at t&e earliest o))ortunity. and t&e 5uantity of direct materials )urc&ased is e5ual to t&e 5uantity used. %&e followin( information is a$aila+le for t&e most recent mont&. Assume t&e allocation +ase for fi*ed o$er&ead costs is t&e num+er of units. Direct Haterials Standard 5uantity>unit Standard )rice>l+. or &r. Actual 5uantity>unit Actual )rice>l+. or &r. 3rice $ariance =uantity>Efficiency $ariance Static +ud(et $olume Actual $olume Actual o$er&ead cost Standard $aria+le o$er&ead cost Standard fi*ed o$er&ead cost O$er&ead fle*i+le +ud(et $ariance 3roduction $olume $ariance /.22 l+s. C7.12>l+. /. ! l+s. C7.22>l+. C!/ .!2 F C1.7 .!2 , 722 units :22 units C11.222 C!>unit C!./22 C:22 , C622 F Direct La+or .! &rs. C7.22>&r. .7 &rs. C6.!2>&r C1. /2.22 F C .1/2.22 ,
LournaliQe t&e )urc&ase and usa(e of direct materials includin( t&e related $ariances. Answer: Date Accounts De+it Credit #aw Haterials In$entory 0!.!/ .!2 Accounts 3aya+le 0!.222.22 Direct Haterials 3rice Nariance !/ .!2 ;or' in 3rocess In$entory Direct Haterials =uantity Nariance #aw Haterials In$entory 0-.602.22 1.7 .!2 0!.!/ .!2
Diff: LO: 11-6 EOC: E11- 1 AACS": Analytical %&in'in( Learnin( Outcome: Discuss standard costin( and $ariance analysis. Discuss and calculate direct material. direct la+or and o$er&ead $ariances.
1 1 Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all
-0) Standard 3roducts Com)any reco(niQes $ariances from standards at t&e earliest o))ortunity. and t&e 5uantity of direct materials )urc&ased is e5ual to t&e 5uantity used. %&e followin( information is a$aila+le for t&e most recent mont&. Assume t&e allocation +ase for fi*ed o$er&ead costs is t&e num+er of units. Direct Haterials Standard 5uantity>unit Standard )rice>l+. or &r. Actual 5uantity>unit Actual )rice>l+. or &r. 3rice $ariance =uantity>Efficiency $ariance Static +ud(et $olume Actual $olume Actual o$er&ead cost Standard $aria+le o$er&ead cost Standard fi*ed o$er&ead cost O$er&ead fle*i+le +ud(et $ariance 3roduction $olume $ariance /.22 l+s. C7.12>l+. /. ! l+s. C7.22>l+. C!/ .!2 F C1.7 .!2 , 722 units :22 units C11.222 C!>unit C!./22 C:22 , C622 F Direct La+or .! &rs. C7.22>&r. .7 &rs. C6.!2>&r C1. /2.22 F C .1/2.22 ,
LournaliQe t&e direct la+or costs incurred and t&e assi(nment of direct la+or to ;or' in 3rocess In$entory. includin( t&e related $ariances. Answer: Date Accounts De+it Credit Hanufacturin( ;a(es 2.1/2.22 ;a(es 3aya+le 17.:22.22 Direct la+or rate Nariance 1. /2.22 ;or' in 3rocess In$entory Direct La+or Efficiency Nariance Hanufacturin( ;a(es 17.222.22 .1/2.22 2.1/2.22
-!) Standard 3roducts Com)any reco(niQes $ariances from standards at t&e earliest o))ortunity. and t&e 5uantity of direct materials )urc&ased is e5ual to t&e 5uantity used. %&e followin( information is a$aila+le for t&e most recent mont&. Assume t&e allocation +ase for fi*ed o$er&ead costs is t&e num+er of units. Direct Haterials Standard 5uantity>unit Standard )rice>l+. or &r. Actual 5uantity>unit Actual )rice>l+. or &r. 3rice $ariance =uantity>Efficiency $ariance Static +ud(et $olume Actual $olume Actual o$er&ead cost Standard $aria+le o$er&ead cost Standard fi*ed o$er&ead cost O$er&ead fle*i+le +ud(et $ariance 3roduction $olume $ariance /.22 l+s. C7.12>l+. /. ! l+s. C7.22>l+. C!/ .!2 F C1.7 .!2 , 722 units :22 units C11.222 C!>unit C!./22 C:22 , C622 F Direct La+or .! &rs. C7.22>&r. .7 &rs. C6.!2>&r C1. /2.22 F C .1/2.22 ,
LournaliQe t&e allocation of o$er&ead costs to ;or' in 3rocess In$entory and closin( manufacturin( o$er&ead costs to o$er&ead $ariances. Answer: Date Accounts De+it Credit ;or' in 3rocess In$entory 12.722.22 Hanufacturin( O$er&ead 12.722.22 O$er&ead Fle*i+le "ud(et Nariance 3roduction Nolume Nariance Hanufacturin( O$er&ead :22.22 622.22 22.22

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Managerial Accounting, 3e (Braun/Tietz) Chapter 11 Standard Costs and Variances

1 Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all

Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all

Co)yri(&t 1 21- 3earson Education. Inc. )u+lis&in( as 3rentice 4all

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