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Exam 9: Standard Costing and Variance Analysis

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Question 31

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At the end of the accounting period,all variances are closed to the ________ account.

A) Work in Process
B) Finished Goods
C) Cost of Goods Manufactured
D) Cost of Goods Sold

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

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Question 32

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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?

A) $8,400 unfavorable
B) $9,000 unfavorable
C) $17,400 unfavorable
D) $600 favorable

E) None of the above
F) A) and D)

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Question 33

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The formula AH × (SR − AR) is the:

How do managers and companies set price and quantity standards?

The formula AQ × (SP − AP) is the:

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:

Bonnie Company has a direct labor standard of 15 hours per unit of output.Each employee has a standard wage rate of $14 per hour.The standard variable overhead rate is $10 per hour.During March,employees worked 13,100 hours.The direct labor rate variance was $9,170 favorable,the variable overhead rate variance was $13,100 unfavorable,and the direct labor efficiency variance was $15,400 unfavorable.What is the variable overhead efficiency variance?

Fixed overhead does not have separate price and quantity variances.

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 and sales 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 transfer of materials to the Cost of Goods Sold account?

A standard cost system records costs at their actual amounts.

Which of the following types of standards can be achieved only under perfect conditions?

When completing a variance analysis,we describe variances as ________ or ________.

Warner Company has budgeted fixed overhead of $225,000 based on budgeted production of 7,500 units.During October,7,200 units were produced and $236,400 was spent on fixed overhead.What is the fixed overhead spending variance?

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.What would Delaware's fixed overhead cost be if it used a flexible budget for the period based on actual sales?

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 and sales 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 to the Cost of Goods Sold account?

The production manager is typically responsible for the direct labor rate variance.

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 direct labor rate variance?

Interpreting the variances is a key part of managerial accounting.For each scenario described below,indicate whether the result would be favorable or unfavorable. Now consider each scenario with sustainability metrics in mind.How might the answers change?

Exeter has a materials standard of 1 pound per unit of output.Each pound has a standard price of $26 per pound.During July,Exeter paid $66,100 for 2,475 pounds,which it used to produce 2,350 units.What is the direct materials price variance?