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Exam 22: Performance Evaluation Using Variances From Standard Costs

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Question 41

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If at the end of the fiscal year the variances from standard are significant, the variances should be transferred to the:

A) work in process account only
B) cost of goods sold account only
C) finished goods account only
D) work in process, cost of goods sold, and finished goods accounts

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

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Question 42

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Currently attainable standards do not allow for reasonable production difficulties.

A) True
B) False

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Question 43

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Tippi Company produces lamps that require 2.25 standard hours per unit at an hourly rate of $15.00 per hour. If 7,700 units required 17,550 hours at an hourly rate of $15.20 per hour, what is the direct labor (a) rate variance, (b) time variance, and (c) cost variance?

The standard factory overhead rate is $7.50 per machine hour ($6.20 for variable factory overhead and $1.30 for fixed factory overhead) based on 100% capacity of 80,000 machine hours. The standard cost and the actual cost of factory overhead for the production of 15,000 units during August were as follows: What is the amount of the factory overhead controllable variance?

If a company records inventory purchases at standard cost and also records purchase price variances, prepare the journal entry for a purchase of widgets that were bought at $7.45 per unit and have a standard cost of $7.15. The total amount owed to the vendor for this purchase is $33,525.

The following information relates to manufacturing overhead for the Chapman Company: Standards: Total fixed factory overhead - $450,000 Estimated production - 25,000 units (100% of capacity) Overhead rates are based on machine hours. Standard hours allowed per unit produced - 2 Fixed overhead rate - $9.00 per machine hour Variable overhead rate - $3.50 per hour Actual: Fixed factory overhead - $450,000 Production - 24,000 units Variable overhead - $170,000 Required:

The standard costs and actual costs for direct materials, direct labor, and factory overhead for the manufacture of 2,500 units of product are as follows: The amount of the direct labor time variance is:

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

If the wage rate paid per hour differs from the standard wage rate per hour for direct labor, the variance is termed a:

The following data is given for the Zoyza Company: Overhead is applied on standard labor hours. The factory overhead controllable variance is:

The formula to compute direct material quantity variance is to calculate the difference between

Standard and actual costs for direct labor for the manufacture of 1,000 units of product were as follows: Determine the (a) time variance, (b) rate variance, and (c) total direct labor cost variance.

Calculate the total factory overhead cost variance using the above information:

Calculate the fixed factory overhead volume variance using the above information:

Calculate the variable factory overhead controllable variance using the above information:

Ruby Company produces a chair that requires 5 yds. 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 the (a) price variance, (b) quantity variance, and (c) cost variance.

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

If the standard to produce a given amount of product is 600 direct labor hours at $15 and the actual was 500 hours at $17, the time variance was $1,700 unfavorable.

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

Standard costs are used in companies for a variety of reasons. Which of the following is not one of the benefits for using standard costs?