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Exam 9: Standard Costing and Variances

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Question 31

True/False

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Easily attainable standards are the best for motivating individuals to work hard.Tight but attainable standards are the best for motivating individuals to work hard.

A) True
B) False

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Question 32

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Venus Company applies overhead based on direct labor hours.The variable overhead standard is 10 hours at $3.50 per hour.During October,Venus Company spent $157,600 for variable overhead.47,440 labor hours were used to produce 4,800 units.What is the variable overhead efficiency variance?

A) $8,440 favorable
B) $1,960 favorable
C) $10,400 favorable
D) $1,960 unfavorable

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

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Question 33

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A quantity standard is

Whitman has a direct labor standard of 2 hours per unit of output.Each employee has a standard wage rate of $22.50 per hour.During July,Whitman paid $94,750 to employees for 4,445 hours worked.2,350 units were produced during July.What is the flexible budget amount for direct labor?

The difference between the actual variable overhead rate and the standard variable overhead rate,multiplied by the actual amount of the cost driver,is the

Delaware Corp.prepared a master budget that included $21,360 for direct materials,$33,600 for direct labor,$18,000 for variable overhead,and $46,440 for fixed overhead.Delaware Corp.planned to sell 4,000 units during the period,but actually sold 4,300 units.How much would variable overhead cost be on a flexible budget for the period based on actual sales?

In a standard cost system,a favorable variance will appear as

Melrose Inc.uses standard costing.Last period,its flexible budget for labor was $144,000.The direct labor rate variance was $5,000 favorable,and the direct labor efficiency variance was $6,000 unfavorable.In the journal entry to record the use of direct labor,the amount credited to wages payable would be

Comparing the master budget with the flexible budget creates a

The standard costs are summarized on a:

Warner Co.has budgeted fixed overhead of $150,000.Practical capacity is 6,000 units,and budgeted production is 5,000 units.During February,4,800 units were produced and $155,600 was spent on fixed overhead.What is the expected (planned) capacity variance?

The difference between budgeted volume and practical capacity,multiplied by the fixed overhead rate,is the

Tucker Co.has budgeted fixed overhead of $225,000 based on budgeted production of 7,500 units.During February,7,200 units were produced and $233,400 was spent on fixed overhead.What is the fixed overhead spending variance?

Tulip Inc.uses standard costing,and its manufacturing standards are as follows: 2 pounds of materials at $13 per pound,and 3 hours of labor at $10 per hour.Budgeted production last period was 5,000 units,and actual production was 4,800 units.Last period,Tulip purchased and used 9,800 pounds of materials for $135,000,and used 15,000 labor hours,costing $145,000.What is the journal entry to record the use of materials?

Melrose Inc.uses standard costing.Last period,it spent $145,000 for labor.The direct labor rate variance was $5,000 favorable,and the direct labor efficiency variance was $6,000 unfavorable.In the journal entry to record the use of direct labor,the amount debited to cost of goods sold would be

Tulip Inc.uses standard costing,and its manufacturing standards are as follows: 2 pounds of materials at $13 per pound,and 3 hours of labor at $10 per hour.Budgeted production last period was 5,000 units,and actual production was 4,800 units.Last period,Tulip purchased and used 9,800 pounds of materials for $135,000,and used 15,000 labor hours,costing $145,000.What is the journal entry to record direct labor costs?

After selling 4,300 units during the period,Dole Corp.prepared a flexible budget that included $22,962 for direct materials,$36,120 for direct labor,$19,350 for variable overhead,and $46,440 for fixed overhead.Dole originally planned its master budget based on sales of 4,000 units.What would total costs have been on the master budget?

The flexible budget can be used as a benchmark for evaluating performance after the fact,as part of the control process.The flexible budget can be used as part of the planning process to predict how the budget will change under various scenarios.The flexible budget can also be used as a benchmark for evaluating performance after the fact as part of the control process.

When preparing a flexible budget,fixed costs should remain the same as on the master budget.Fixed costs remain the same regardless of volume,which is the only change that occurs from master to flexible budget.

To foster continuous improvement,standards should ________________ in difficulty over time.