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Exam 8: Evaluating Variances From Standard Costs

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Question 71

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Prepare an income statement (through income before income tax) for presentation to management, using the following data from the records of Greenway Manufacturing Company for November of the current year:

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Question 72

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The following data relate to direct labor costs for the current period: What is the direct labor rate variance?

A) $2,250 unfavorable
B) $2,125 unfavorable
C) $2,250 favorable
D) $2,125 favorable

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

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Question 73

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Ruby Company produces a chair that requires 5 yards of material per unit. The standard price of one yard of material is $7.50. During the month, 8,400 chairs were manufactured, using 43,700 yards at a cost of $7.30 per yard. Determine: (a) price variance (b) quantity variance (c) total cost variance.

Oak Company produces a chair that requires 6 yards of material per unit. The standard price of one yard of material is $7.50. During the month, 8,500 chairs were manufactured, using 48,875 yards. Journalize the entry to record the standard direct materials used in production.

The total manufacturing cost variance consists of

Sally's Chocolate Company makes gourmet cupcakes which are sold by the dozen. Compute the standard cost for one dozen cupcakes, based on the following standards:

Accounting systems that use standards for product costs are called budgeted cost systems.

Standard costs should always be revised when they differ from actual costs.

Compute the standard cost for one pair of boots, based on the following standards for each pair of boots:

The following data is given for the Bahia Company: Overhead is applied on standard labor hours. The fixed factory overhead volume variance is

Ruby Company produces a chair that requires 5 yards of material per unit. The standard price of one yard of material is $7.50. During the month, 8,500 chairs were manufactured, using 43,600 yards at a cost of $7.55 per yard. Determine: (a) price variance (b) quantity variance (c) cost variance.

At the end of the fiscal year, the variances from standard are usually transferred to the finished goods account.

The formula to the compute direct labor time variance is to calculate the difference between

The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory overhead) based on 100% of normal capacity of 30,000 direct labor hours. The standard cost and the actual cost of factory overhead for the production of 5,000 units during May were as follows: What is the amount of the fixed factory overhead volume variance?

Standard costs are divided into which of the following components?

Favorable fixed factory overhead volume variances are never harmful, since achieving them encourages managers to run the factory above normal capacity.

The direct labor time variance measures the efficiency of the direct labor force.

*Actual hours are equal to standard hours for units produced. Tthe variable factory overhead controllable variance is

At the end of the fiscal year, variances from standard costs are usually transferred to the

The standard cost is how much a product should cost to manufacture.