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Exam 9: Standard Costing and Variance Analysis

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Question 41

True/False

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A standard cost system initially records manufacturing costs at the standard rather than the actual amount.

A) True
B) False

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Question 42

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A fixed overhead rate based on ________ highlights for management attention the cost of unutilized capacity.

A) budgeted production
B) practical capacity
C) utilized capacity
D) actual production

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

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Question 43

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Wharton Tooling uses a standard cost system to account for the costs of its one product.Variable overhead standards are 14 hours of labor at a standard rate of $9.Fixed overhead is applied at a rate of $150 per unit,based on budgeted production of 650 units.During July,Wharton Tooling produced 600 units.Payroll totaled $112,930 for 8,770 hours worked.Overhead incurred was $77,490 variable and $98,750 fixed.Calculate the: a.variable overhead rate variance. b.variable overhead efficiency variance. c.fixed overhead spending variance.

Raven applies overhead based on direct labor hours.The variable overhead standard is 2 hours at $11 per hour.During July,Raven spent $116,700 for variable overhead.8,890 labor hours were used to produce 4,700 units.What is the variable overhead rate variance?

The formula SR × (SH − AH) is the:

Pearl Co.produces pearl necklaces and uses a standard cost system.Fixed overhead is applied to production at a rate of $34 per unit,based on budgeted production of 3,000 per month.During December,Pearl produced 3,100 pearl necklaces.Fixed overhead incurred totaled $114,940.Calculate the: a.fixed overhead spending variance. b.fixed overhead volume variance. c.over- or underapplied fixed overhead.

The fixed overhead volume variance is the difference between:

Oxford Co.has a materials standard of 2.1 pounds per unit of output.Each pound has a standard price of $10 per pound.During February,Oxford Co.paid $57,220 for 4,840 pounds,which were used to produce 2,400 units.What is the direct materials quantity variance?

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 the actual volume and the budgeted volume,multiplied by the fixed overhead rate based on budgeted volume,is the:

Jupiter Co.applies overhead based on direct labor hours.The variable overhead standard is 4 hours at $12 per hour.During February,Jupiter Co.spent $113,400 for variable overhead.9,150 labor hours were used to produce 2,400 units.How much is variable overhead on the flexible budget?

A price standard is the price that should be paid per output unit for the input.

Madrid Co.has a direct labor standard of 4 hours per unit of output.Each employee has a standard wage rate of $11 per hour.During February,Madrid Co.paid $99,500 to employees for 9,150 hours worked.2,400 units were produced during February.What is the direct labor rate variance?

A standard cost card shows what the company spent to produce each unit of product.

A budget depends upon:

Madrid Co.has a direct labor standard of 4 hours per unit of output.Each employee has a standard wage rate of $11 per hour.During February,Madrid Co.paid $99,500 to employees for 9,150 hours worked.2,400 units were produced during February.What is the direct labor efficiency variance?

Swan Company has a direct labor standard of 15 hours per unit of output.Each employee has a standard wage rate of $14 per hour.During March,employees worked 13,100 hours.The direct labor rate variance was $9,170 favorable,and the direct labor efficiency variance was $15,400 unfavorable.How many units were produced?

Fletcher has budgeted fixed overhead of $135,000 based on budgeted production of 9,000 units.During July,9,400 units were produced and $142,800 was spent on fixed overhead.What is the fixed overhead spending variance?

Which of the following statements is true about variances?

The price variance for direct labor is called the: