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Accounting
Q:
Manatee Corp. has developed standard costs based on a predicted operating level of 352,000 units of production, which is 80% of capacity. Variable overhead is $281,600 at this level of activity, or $0.80 per unit. Fixed overhead is $440,000. The standard costs per unit are: Direct materials (0.5 lbs. @ $1/1b.)
$0.50 per unit Direct labor (1 hour @ $6/hour) .
$6.00 per unit Overhead (1 hour @ $2.05/hour)
$2.05 per unit Manatee actually produced 330,000 units at 75% of capacity and actual costs for the period were: Direct materials (162,000 lbs.) .
$ 170,100 Direct labor (329,500 hours) .
$2,042,900 Fixed overhead
$ 438,000 Variable overhead .
$ 262,000 Calculate the following variances and indicate whether each variance is favorable or unfavorable:
(1) Direct labor efficiency variance: $__________________
(2) Direct materials price variance: $__________________
(3) Controllable overhead variance: $__________________
Q:
Falcon Company's output for a period was assigned the standard direct labor cost of $17,160. If the company had a favorable direct labor rate variance of $1,000 and an unfavorable direct labor efficiency variance of $275, what was the total actual cost of direct labor incurred during the period?
Q:
Fairfield Co. collected the following information about its production activities for the current year.
a. Compute the direct materials price and quantity variances and indicate whether each is favorable or unfavorable.
b. Prepare the journal entry to record the issuance of direct materials into production. Actual costs and quantities:
Direct materials used 95,000 lbs. @ $6.30 per lb.
Units completed during the year, 50,000 units
Standard costs and quantities:
Price per lb. of direct material, $6.05
Two lbs. of direct material per unit
Q:
The following information describes production activities of the Central Corp.: Raw materials used
16,000 lbs. at $4.05 per lb. Factory payroll ...
5,545 hours for a total of $72,085 30,000 units were completed during the year
Budgeted standards for each unit produced:
1/2 lb. of raw material at $4.15 per lb.
10 minutes of direct labor at $12.50 per hour Compute the direct materials price and quantity and the direct labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable.
Q:
In producing 700 units of Product CBA last period, Cobalt Company used 5,000 pounds of Material H, costing $34,250. The company has established the standard of using 7.2 pounds of Material H per unit of CBA, at a price of $7.50 per pound. Calculate the materials price and quantity variances associated with producing the 700 units, and indicate whether they are favorable or unfavorable:
Q:
Jacques Company planned to use 18,000 pounds of material costing $2.50 per pound to make 4,000 units of its product. In actually making 4,000 units, the company used 18,800 pounds that cost $2.54 per pound. Calculate the direct materials quantity variance.
Q:
Jacques Company planned to use 18,000 pounds of material costing $2.50 per pound to make 4,000 units of its product. In actually making 4,000 units, the company used 18,800 pounds that cost $2.54 per pound. Calculate the direct materials price variance.
Q:
Q:
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Q:
Thomas Co. provides the following fixed budget data for the year: Sales (20,000 units) . $600,000 Cost of sales: Direct materials ..
$200,000 Direct labor
160,000 Variable overhead ..
60,000 Fixed overhead ..
80,000
500,000 Gross profit . $100,000 Operating expenses: Fixed ..
$12,000 Variable .
40,000
52,000 Income from operations .. $ 48,000 The company's actual activity tor the year follows: Sales (21,000 units) . $651,000 Cost of goods sold: Direct materials ..
$231,000 Direct labor
168,000 Variable overhead ..
73,500 Fixed overhead ..
77,500
550,000 Gross profit . $101,000 Operating expenses: Fixed .
12,000 Variable .
39,500
51,500 Income from operations . $ 49,500 Required:
Prepare a flexible budget performance report for the year using the contribution margin format.
Q:
A product has a sales price of $20. Based on a 15,000-unit production level, the variable costs are $12 per unit and the fixed costs are $6 per unit. Using a flexible budget for an actual production and sales level of 18,000 units, what is the budgeted operating income?
Q:
Casco Co. planned to produce and sell 40,000 units. At that volume level, variable costs are determined to be $320,000 and fixed costs are $30,000. The planned selling price is $10 per unit. Casco actually produced and sold 42,000 units. Using a contribution margin format:
(a) Prepare a fixed budget income statement for the planned level of sales and production.
(b) Prepare a flexible budget income statement for the actual level of sales and production.
Q:
Based on predicted production of 25,000 units, Best Co. anticipates $175,000 of fixed costs and $137,500 of variable costs. What are the flexible budget amounts of total costs for 20,000 and 30,000 units?
Q:
Stanton Co. produces and sells two lines of t-shirts, Deluxe and Mega. Stanton provides the following data. Compute the sales price and the sales volume variances for each product. Budget
Actual Unit sales price Deluxe .
$15
$16 Unit sales priceMega .
$20
$19 Unit salesDeluxe
2,400
2,500 Unit salesMega ..
2,000
1,900
Q:
Abrams, Inc., provides the following results of March's operations: Direct materials price variance ..
$ 400F Direct materials quantity variance .
2,000U Direct labor rate variance ..
100U Direct labor efficiency variance ....
1,200F Variable overhead spending variance
400U Variable overhead efficiency variance ..
800F Fixed overhead spending variance .
100U Fixed overhead volume variance ...
600F Required:
(a) Determine the total overhead cost variance for March.
(b) Applying the management by exception approach, which of the variances shown are of greatest concern? Why?
Q:
What is the overhead volume variance? What would be the cause of a favorable volume variance?
Q:
Whistler Company determined that in the production of their products last period; they had a favorable price variance and an unfavorable quantity variance for direct materials. What might be the cause of this pattern of variances?
Q:
Flexible budgets may be prepared before or after an actual period of activity. Why would management prepare such budgets at differing time frames?
Q:
Should both favorable and unfavorable variances be investigated, or only the unfavorable ones? Explain.
Q:
What are the four steps in the effective management of variance analysis?
Q:
Presented below are terms preceded by letters a through h and followed by a list of definitions 1 through 8. Enter the letter of the term with the definition, using the space preceding the definition. (a) Unfavorable variance
(b) Fixed budget performance report
(c) Overhead cost variance
(d) Budgetary control
(e) Spending variance
(f) Flexible budget performance report
(g) Quantity variance
(h) Favorable variance __________(1) Difference in sales or costs, when the actual value is compared to the budgeted value, that contributes to a lower income.
__________(2) A report that compares results with fixed budgeted amounts and identifies the differences as favorable or unfavorable variances.
__________(3) The difference between the actual price of an item and its standard price.
__________(4) Difference in sales or costs, when the actual value is compared to the budgeted value, that contributes to a higher income.
__________(5) Use of budgets by management to monitor and control the operations of a company.
__________(6) Difference between actual quantity of an input and the standard quantity of the input.
__________(7) Difference between the total overhead cost applied to products and the total overhead cost actually incurred.
__________(8) A report that compares actual revenues and costs with their variable budgeted amounts based on actual sales volume (or other level of activity) and identifies the differences as variances.
Q:
Presented below are terms preceded by letters a through j and followed by a list of definitions 1 through 10. Enter the letter of the term with the definition, using the space preceding the definition.
(a) Cost variance
(b) Volume variance
(c) Price variance
(d) Quantity variance
(e) Standard costs
(f) Controllable variance
(g) Fixed budget
(h) Flexible budget
(i) Variance analysis
(j) Management by exception
__________ (1) The difference between the total budgeted overhead cost and the overhead
cost that was allocated to products using the predetermined fixed overhead rate.
__________ (2) A planning budget based on a single predicted amount of sales or production
volume; unsuitable for evaluations if the actual volume differs from the predicted volume.
__________ (3) Preset costs for delivering a product, component, or service under normal
conditions.
__________ (4) A process of examining the differences between actual and budgeted sales or
costs and describing them in terms of the amounts that resulted from price and quantity
differences.
__________ (5) The difference between actual and budgeted sales or cost caused by the
difference between the actual price per unit and the budgeted price per unit.
__________ (6) A budget prepared based on predicted amounts of revenues and expenses
corresponding to the actual level of output.
__________ (7) The difference between actual and budgeted cost caused by the difference
between the actual quantity and the budgeted quantity.
__________ (8) The combination of both overhead spending variances (variable and fixed)
and the variable overhead efficiency variance.
__________ (9) A management process to focus on significant variances and give less
attention to areas where performance is close to the standard.
__________ (10) The difference between actual cost and standard cost, made up of a price
variance and a quantity variance.
Q:
Cabot Company collected the following data regarding production of one of its products. Compute the variable overhead efficiency variance. Direct labor standard (2 hrs. @ $13/hr.)
$26.00 per finished unit Actual direct labor hours
81,000 hrs. Budgeted units
42,000 units Actual finished units produced
40,000 units Standard variable OH rate (2 hrs. @ $14.30/hr.)
$28.60 per finished unit Standard fixed OH rate ($336,000/42,000 units)
$8.00 per unit Actual cost of variable overhead costs incurred
$1,140,000 Actual cost of fixed overhead costs incurred
$ 338,000 A. $14,300 favorable.
B. $18,000 favorable.
C. $18,000 unfavorable.
D. $18,300 unfavorable.
E. $14,300 unfavorable.
Q:
Cabot Company collected the following data regarding production of one of its products. Compute the variable overhead spending variance. Direct labor standard (2 hrs. @ $13/hr.)
$26.00 per finished unit Actual direct labor hours
81,000 hrs. Budgeted units
42,000 units Actual finished units produced
40,000 units Standard variable OH rate (2 hrs. @ $14.30/hr.)
$28.60 per finished unit Standard fixed OH rate ($336,000/42,000 units)
$8.00 per unit Actual cost of variable overhead costs incurred
$1,140,000 Actual cost of fixed overhead costs incurred
$ 338,000 A. $18,300 favorable.
B. $18,000 favorable.
C. $18,000 unfavorable.
D. $18,300 unfavorable.
E. $14,300 unfavorable.
Q:
Cabot Company collected the following data regarding production of one of its products. Compute the fixed overhead cost variance. Direct labor standard (2 hrs. @ $13/hr.)
$26.00 per finished unit Actual direct labor hours
81,000 hrs. Budgeted units
42,000 units Actual finished units produced
40,000 units Standard variable OH rate (2 hrs. @ $14.30/hr.)
$28.60 per finished unit Standard fixed OH rate ($336,000/42,000 units)
$8.00 per unit Actual cost of variable overhead costs incurred
$1,140,000 Actual cost of fixed overhead costs incurred
$ 338,000 A. $18,300 favorable.
B. $18,000 favorable.
C. $18,000 unfavorable.
D. $18,300 unfavorable.
E. $14,300 unfavorable.
Q:
Cabot Company collected the following data regarding production of one of its products. Compute the variable overhead cost variance. Direct labor standard (2 hrs. @ $13/hr.)
$26.00 per finished unit Actual direct labor hours
81,000 hrs. Budgeted units
42,000 units Actual finished units produced
40,000 units Standard variable OH rate (2 hrs. @ $14.30/hr.)
$28.60 per finished unit Standard fixed OH rate ($336,000/42,000 units)
$8.00 per unit Actual cost of variable overhead costs incurred
$1,140,000 Actual cost of fixed overhead costs incurred
$ 338,000 A. $18,000 favorable.
B. $4,000 favorable.
C. $18,000 unfavorable.
D. $18,300 favorable.
E. $14,300 unfavorable.
Q:
Cabot Company collected the following data regarding production of one of its products. Compute the direct labor efficiency variance. Direct labor standard (2 hrs. @ $13/hr.)
$26 per finished unit Actual direct labor hours
81,000 hrs. Actual finished units produced
40,000 units Actual cost of direct labor
$1,093,500 A. $13,000 favorable.
B. $40,500 favorable.
C. $53,500 favorable.
D. $13,000 unfavorable.
E. $40,500 unfavorable.
Q:
Cabot Company collected the following data regarding production of one of its products. Compute the direct labor rate variance. Direct labor standard (2 hrs. @ $13/hr.)
$26 per finished unit Actual direct labor hours
81,000 hrs. Actual finished units produced
40,000 units Actual cost of direct labor
$1,093,500 A. $53,500 unfavorable.
B. $40,500 favorable.
C. $53,500 favorable.
D. $13,000 unfavorable.
E. $40,500 unfavorable.
Q:
Cabot Company collected the following data regarding production of one of its products. Compute the direct labor cost variance. Direct labor standard (2 hrs. @ $13/hr.)
$26 per finished unit Actual direct labor hours
81,000 hrs. Actual finished units produced
40,000 units Actual cost of direct labor
$1,093,500 A. $53,500 unfavorable.
B. $40,500 favorable.
C. $53,500 favorable.
D. $13,000 unfavorable.
E. $40,500 unfavorable.
Q:
Cabot Company collected the following data regarding production of one of its products. Compute the direct materials quantity variance. Direct materials standard (6 lbs. @ $2/lb.)
$12 per finished unit Actual direct materials used
243,000 lbs. Actual finished units produced
40,000 units Actual cost of direct materials used
$483,570 A. $2,430 unfavorable.
B. $3,570 unfavorable.
C. $2,430 favorable.
D. $6,000 unfavorable.
E. $3,570 favorable.
Q:
Cabot Company collected the following data regarding production of one of its products. Compute the direct materials price variance. Direct materials standard (6 lbs. @ $2/lb.)
$12 per finished unit Actual direct materials used
243,000 lbs. Actual finished units produced
40,000 units Actual cost of direct materials used
$483,570 A. $2,430 unfavorable.
B. $3,570 unfavorable.
C. $2,430 favorable.
D. $6,000 unfavorable.
E. $3,570 favorable.
Q:
Cabot Company collected the following data regarding production of one of its products. Compute the direct materials cost variance. Direct materials standard (6 lbs. @ $2/lb.)
$12 per finished unit Actual direct materials used
243,000 lbs. Actual finished units produced
40,000 units Actual cost of direct materials used
$483,570 A. $6,000 favorable.
B. $3,570 unfavorable.
C. $2,430 favorable.
D. $6,000 unfavorable.
E. $3,570 favorable.
Q:
Brewer Company specializes in selling used cars. During the month, the dealership sold 22 cars at an average price of $15,000 each. The budget for the month was to sell 20 cars at an average price of $16,000. Compute the dealerships sales volume variance for the month.
A. $22,000 unfavorable.
B. $10,000 favorable.
C. $22,000 favorable.
D. $32,000 unfavorable.
E. $32,000 favorable.
Q:
Brewer Company specializes in selling used cars. During the month, the dealership sold 22 cars at an average price of $15,000 each. The budget for the month was to sell 20 cars at an average price of $16,000. Compute the dealerships sales price variance for the month.
A. $22,000 unfavorable.
B. $10,000 favorable.
C. $22,000 favorable.
D. $32,000 unfavorable.
E. $32,000 favorable.
Q:
Bok Companys output for the current period was assigned a $400,000 standard direct labor cost. The direct labor variances included a $10,000 unfavorable direct labor rate variance and a $4,000 favorable direct labor efficiency variance. What is the actual total direct labor cost for the current period?
A. $414,000.
B. $386,000.
C. $394,000.
D. $406,000.
E. $410,000.
Q:
Bok Companys output for the current period was assigned a $200,000 standard direct materials cost. The direct materials variances included a $5,000 favorable price variance and a $3,000 unfavorable quantity variance. What is the actual total direct materials cost for the current period?
A. $208,000.
B. $198,000.
C. $202,000.
D. $192,000.
E. $205,000.
Q:
For the current period, Boggs Companys manufacturing operations yield a $5,250 unfavorable price variance on its direct materials usage. The actual price per pound is $56.50 and the standard price per pound is $55.00. How many pounds of material are used in the current period?
A. 5,393.
B. 5,110.
C. 3,500.
D. 3,750.
E. 4,000.
Q:
When recording the journal entry for labor, the Goods in Process Inventory account is
A. Debited for standard labor cost.
B. Debited for actual labor cost.
C. Credited for standard labor cost.
D. Credited for actual labor cost.
E. Not used.
Q:
Landlubber Company established a standard direct materials cost of 1.5 gallons at $2 per gallon for one unit of its product. During the past month, actual production was 6,500 units. The material quantity variance was $700 favorable and the material price variance was $470 unfavorable. The entry to charge Goods in Process Inventory for the standard material costs during the month and to record the direct material variances in the accounts would include:
A. A debit to Goods in Process for $19,500.
B. A credit to Raw Materials for $19,270.
C. A debit to Direct Material Price Variance for $470.
D. A credit to Direct Material Quantity Variance for $700.
E. All of the choices are correct.
Q:
When standard manufacturing costs are recorded in the accounts and the cost variances are immaterial at the end of the accounting period, the cost variances should be:
A. Carried forward to the next accounting period.
B. Allocated between cost of goods sold, finished goods, and goods in process.
C. Closed to cost of goods sold.
D. Written off as a selling expense.
E. Ignored.
Q:
When recording variances in a standard cost system:
A. Only unfavorable material variances are debited.
B. Only unfavorable material variances are credited.
C. Both unfavorable material and labor variances are credited.
D. All unfavorable variances are debited.
E. All unfavorable variances are credited.
Q:
The following information relating to a company's overhead costs is available. Based on this information, the total overhead variance is: Budgeted fixed overhead rate per machine hour
$0.50 Actual variable overhead
$73,000 Budgeted variable overhead rate per machine hour
$2.50 Actual fixed overhead
$17,000 Budgeted hours allowed for actual output achieved
32,000 Based on this information, the total overhead variance is:
A. $7,000 favorable.
B. $6,000 favorable.
C. $1,000 unfavorable.
D. $6,000 unfavorable.
E. $1,000 favorable.
Q:
Quantity variances for direct cost categories (direct materials and direct labor) are based on differences between the actual inputs used and the standard inputs allowed for the actual output achieved. A key difference in the analysis of quantity variances for direct cost categories and the analysis of the efficiency variance for variable overhead is:
A. An efficiency variance for variable overhead cannot be calculated.
B. The flexible-budget variance for variable overhead is always equal to the efficiency variance for variable overhead.
C. The efficiency variance for variable overhead is based on the cost effectiveness in using the cost-allocation base.
D. The flexible-budget variance for variable overhead is always equal to the spending variance for variable overhead.
E. There is no key difference between the analysis of quantity variances for direct cost categories and the analysis of the efficiency variance for variable overhead; they should be evaluated in exactly the same manner.
Q:
Adams, Inc. uses the following standard to produce a single unit of its product: overhead (2 hrs. @ $3/hr.) $ 6. The flexible budget for overhead is $100,000 plus $1 per direct labor hour. Actual data for the month show overhead costs of $150,000, and 24,000 units produced. The overhead volume variance is:
A. $10,000 favorable.
B. $12,000 favorable.
C. $ 4,000 unfavorable.
D. $16,000 unfavorable.
E. $36,000 unfavorable.
Q:
Price Company's flexible budget shows $10,710 of overhead at 75% of capacity, which was the operating level achieved during May. However, the company applied overhead to production during May at a rate of $2.00 per direct labor hour based on a budgeted operating level of 6,120 direct labor hours (90% of capacity). If overhead actually incurred was $11,183 during May, the controllable variance for the month was:
A. $ 473 unfavorable.
B. $ 473 favorable.
C. $1,530 favorable.
D. $1,530 unfavorable.
E. $1,057 favorable.
Q:
Regarding overhead costs, as volume increases:
A. Unit fixed cost increases, unit variable cost decreases.
B. Unit fixed cost decreases, unit variable cost increases.
C. Unit variable cost decreases, unit fixed cost remains constant.
D. Unit fixed cost decreases, unit variable cost remains constant.
E. Both unit fixed cost and unit variable cost remain constant.
Q:
Montaigne Corp. has the following information about its standards and production activity for November. The controllable variance is: Actual total factory overhead incurred
$28,175 Standard factory overhead: Variable overhead .
$3.10 per unit produced Fixed overhead ($12,000/6,000 estimated units to be produced)
$2 per unit Actual units produced ..
4,800 units A. $1,295U.
B. $1,295F.
C. $2,400U.
D. $2,400F.
E. $3,695U.
Q:
Montaigne Corp. has the following information about its standards and production activity for November. The volume variance is: Actual total factory overhead incurred.
$28,175 Standard factory overhead: Variable overhead ...
$3.10 per unit produced Fixed overhead ($12,000/6,000 estimated units to be produced)
$2 per unit Actual units produced ..
4,800 units A. $1,295U.
B. $1,295F.
C. $2,400U.
D. $2,400F.
E. $3,695U.
Q:
Adams Co. uses the following standard to produce a single unit of its product: variable overhead (2 hrs. @ $3/hr.) $6. Actual data for the month show variable overhead costs of $150,000, and 24,000 units produced. The total variable overhead variance is:
A. $6,000F.
B. $6,000U.
C. $78,000U.
D. $78,000F.
E. $0.
Q:
A company's flexible budget for 48,000 units of production showed variable overhead costs of $72,000 and fixed overhead costs of $64,000. The company incurred overhead costs of $122,800 while operating at a volume of 40,000 units. The total controllable cost variance is:
A. $ 1,200 favorable.
B. $ 1,200 unfavorable.
C. $13,200 favorable.
D. $13,200 unfavorable.
E. $15,200 favorable.
Q:
The difference between the total budgeted fixed overhead cost and the fixed overhead applied to production using the predetermined overhead rate is the:
A. Production variance.
B. Volume variance.
C. Overhead cost variance.
D. Quantity variance.
E. Controllable variance.
Q:
The sum of the variable overhead spending variance, the variable overhead efficiency variance, and the fixed overhead spending variance is the:
A. Production variance.
B. Quantity variance.
C. Volume variance.
D. Price variance.
E. Controllable variance.
Q:
Overhead cost variance is:
A. The difference between the overhead costs actually incurred and the overhead budgeted at the actual operating level.
B. The difference between the actual overhead incurred during a period and the standard overhead applied.
C. The difference between actual and budgeted cost caused by the difference between the actual price per unit and the budgeted price per unit.
D. The costs that should be incurred under normal conditions to produce a specific product (or component) or to perform a specific service.
E. The difference between the total overhead cost that would have been expected if the actual operating volume had been accurately predicted and the amount of overhead cost that was allocated to products using the standard overhead rate.
Q:
The following information describes a company's usage of direct labor in a recent period. The direct labor rate variance is: Actual hours used .
45,000 Actual rate per hour ..
$15 Standard rate per hour ..
$14 Standard hours for units produced ...
47,000 A. $28,000 favorable.
B. $28,000 unfavorable.
C. $45,000 unfavorable.
D. $45,000 favorable.
E. $17,000 unfavorable.
Q:
The following information describes a company's usage of direct labor in a recent period. The direct labor efficiency variance is: Actual hours used .
45,000 Actual rate per hour ..
$15 Standard rate per hour ..
$14 Standard hours for units produced ...................
47,000 A. $28,000 unfavorable.
B. $28,000 favorable.
C. $45,000 unfavorable.
D. $45,000 favorable.
E. $17,000 unfavorable.
Q:
The standard materials cost to produce 1 unit of Product M is 6 pounds of material at a standard price of $50 per pound. In manufacturing 8,000 units, 47,000 pounds of material were used at a cost of $51 per pound. What is the total direct materials cost variance?
A. $48,000 unfavorable.
B. $51,000 favorable.
C. $51,000 unfavorable.
D. $ 3,000 favorable.
E. $ 3,000 unfavorable.
Q:
A job was budgeted to require 3 hours of labor per unit at $8.00 per hour. The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000. What is the total labor cost variance?
A. $2,000 unfavorable.
B. $3,000 unfavorable.
C. $6,000 unfavorable.
D. $8,000 unfavorable.
E. $9,000 unfavorable.
Q:
A company has established 5 pounds of Material M at $2 per pound as the standard for the material in its Product A. The company has just produced 1,000 units of this product, using 5,200 pounds of Material M that cost $9,880.The direct materials price variance is:
A. $520 unfavorable.
B. $400 unfavorable.
C. $120 favorable.
D. $520 favorable.
E. $400 favorable.
Q:
A company has established 5 pounds of Material M at $2 per pound as the standard for the material in its Product A. The company has just produced 1,000 units of this product, using 5,200 pounds of Material M that cost $9,880. The direct materials quantity variance is:
A. $400 unfavorable.
B. $120 favorable.
C. $400 favorable.
D. $520 favorable.
E. $520 unfavorable.
Q:
Bradford Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units. The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units. What is the direct materials price variance?
A. $ 400 unfavorable.
B. $ 450 unfavorable.
C. $2,500 unfavorable.
D. $2,550 unfavorable.
E. $2,950 unfavorable.
Q:
Bradford Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units. The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units. What is the direct materials quantity variance?
A. $ 400 unfavorable.
B. $ 450 unfavorable.
C. $2,500 unfavorable.
D. $2,550 unfavorable.
E. $2,950 unfavorable.
Q:
The following company information is available. The direct materials quantity variance is: Direct materials used for production .
36,000 gallons Standard quantity for units produced
34,400 gallons Standard cost per gallon of direct material ...
$6.00 Actual cost per gallon of direct material ...
$6.10 A. $10,000 unfavorable.
B. $13,200 unfavorable.
C. $ 9,600 unfavorable.
D. $10,000 favorable.
E. $13,200 favorable.
Q:
The following company information is available for January. The direct materials price variance is: Direct materials used
2,500 feet @ $55 per foot Standard costs for direct materials for January production
2,600 feet @ $53 per foot A. $5,000 favorable.
B. $ 300 favorable.
C. $5,200 unfavorable.
D. $5,000 unfavorable.
E. $5,200 favorable.
Q:
Q:
Bartels Corp. produces woodcarvings. It takes 2 hours of direct labor to produce a carving. Bartels' standard labor cost is $12 per hour. During August, Bartels produced 10,000 carvings and used 21,040 hours of direct labor at a total cost of $250,376. What is Bartels' labor rate variance for August?
A. $2,000 favorable.
B. $2,104 unfavorable.
C. $2,104 favorable.
D. $4,160 favorable.
E. $2,000 unfavorable.
Q:
Kyle, Inc. has collected the following data on one of its products. The direct materials price variance is: Direct materials standard (4 lbs. @ $1/lb.)
$4 per finished unit Total direct materials cost varianceunfavorable
$13,750 Actual direct materials used
150,000 lbs. Actual finished units produced
30,000 units A. $13,750 unfavorable.
B. $16,250 unfavorable.
C. $16,250 favorable.
D. $30,000 unfavorable.
E. $33,000 favorable.
Q:
Kyle, Inc. has collected the following data on one of its products. The direct materials quantity variance is: Direct materials standard (4 lbs. @ $1/lb.)
$4 per finished unit Total direct materials cost varianceunfavorable
$13,750 Actual direct materials used
150,000 lbs. Actual finished units produced
30,000 units A. $30,000 favorable.
B. $13,750 unfavorable.
C. $16,250 favorable.
D. $30,000 unfavorable.
E. $13,750 favorable.
Q:
Kyle, Inc. has collected the following data on one of its products. The actual cost of the direct materials used is: Direct materials standard (4 lbs. @ $1/lb.)
$4 per finished unit Total direct materials cost varianceunfavorable
$13,750 Actual direct materials used
150,000 lbs. Actual finished units produced
30,000 units A. $133,750.
B. $150,000.
C. $106,250.
D. $158,750.
E. $120,000.
Q:
Which department is often responsible for the direct materials price variance?
A. The accounting department.
B. The production department.
C. The purchasing department.
D. The finance department.
E. The budgeting department.
Q:
Based on a predicted level of production and sales of 12,000 units, a company anticipates reporting operating income of $26,000 after deducting variable costs of $72,000 and fixed costs of $10,000.
Based on this information, the budgeted amounts of fixed and variable costs for 15,000 units would be:
A. $10,000 of fixed costs and $72,000 of variable costs.
B. $10,000 of fixed costs and $90,000 of variable costs.
C. $12,500 of fixed costs and $90,000 of variable costs.
D. $12,500 of fixed costs and $72,000 of variable costs.
E. $10,000 of fixed costs and $81,000 of variable costs.
Q:
A company's flexible budget for 10,000 units of production reflects sales of $200,000; variable costs of $40,000; and fixed costs of $75,000. Calculate the expected level of operating income if the company produces and sells 13,000 units.
A. $110,500.
B. $85,000.
C. $133,000.
D. $100,000.
E. $50,500.
Q:
Product A has a sales price of $10 per unit. Based on a 10,000-unit production level, the variable costs are $6 per unit and the fixed costs are $3 per unit. Using a flexible budget for 12,500 units, what is the budgeted operating income from Product A?
A. $12,500.
B. $25,000.
C. $20,000.
D. $30,000.
E. $35,000.
Q:
Based on predicted production of 12,000 units, a company anticipates $150,000 of fixed costs and $123,000 of variable costs. The flexible budget amounts of fixed and variable costs for 10,000 units are:
A. $125,000 fixed and $102,500 variable.
B. $125,000 fixed and $123,000 variable.
C. $102,500 fixed and $150,000 variable.
D. $150,000 fixed and $123,000 variable.
E. $150,000 fixed and $102,500 variable.
Q:
A flexible budget is prepared:
A. Before the operating period only.
B. After the operating period only.
C. During the operating period only.
D. At any time in the planning period.
E. A flexible budget should never be prepared.
Q:
An internal report that helps management analyze the difference between actual performance and budgeted performance based on the actual sales volume (or other level of activity), and which presents the differences between actual and budgeted amounts as variances, is called a(n):
A. Sales budget performance report.
B. Flexible budget performance report.
C. Master budget performance report.
D. Static budget performance report.
E. Operating budget performance report.
Q:
Sales variance analysis is useful for:
A. Planning purposes only.
B. Budgeting purposes only.
C. Control purposes only.
D. Planning and control purposes.
E. Planning and budgeting purposes.
Q:
A flexible budget performance report compares the differences between:
A. Actual performance and budgeted performance based on actual sales volume.
B. Actual performance over several periods.
C. Budgeted performance over several periods.
D. Actual performance and budgeted performance based on budgeted sales volume.
E. Actual performance and standard costs at the budgeted sales volume.
Q:
Identify the situation that will result in a favorable variance.
A. Actual revenue is higher than budgeted revenue.
B. Actual revenue is lower than budgeted revenue.
C. Actual income is lower than expected.
D. Actual costs are higher than budgeted costs.
E. Actual expenses are higher than budgeted expenses.
Q:
Variable budget is another name for:
A. Cash budget.
B. Flexible budget.
C. Fixed budget.
D. Manufacturing budget.
E. Rolling budget.