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Exam 9: Flexible Budgets Standard Costs and Variance Analysis

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Question 41

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The standards for product V28 call for 7.5 pounds of a raw material that costs $18.10 per pound.Last month, 1,400 pounds of the raw material were purchased for $24,990.The actual output of the month was 160 units of product V28.A total of 1,300 pounds of the raw material were used to produce this output. The direct materials purchases variance is computed when the materials are purchased. Required: a.What is the materials price variance for the month? b.What is the materials quantity variance for the month?

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a.Materials price variance = (AQ × AP)− ...

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Question 42

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Magno Cereal Corporation uses a standard cost system for its "crunchy pickle" cereal.The materials standard for each batch of cereal produced is 1.4 pounds of pickles at a standard cost of $3.00 per pound.During the month of August, Magno purchased 78,000 pounds of pickles at a total cost of $253,500.Magno used all of these pickles to produce 60,000 batches of cereal.What is Magno's materials quantity variance for August?

A) $1,500 Unfavorable
B) $18,000 Favorable
C) $19,500 Unfavorable
D) $54,000 Unfavorable

E) B) and C)
F) All of the above

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Question 43

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Piper Corporation's standards call for 1,000 direct labor-hours to produce 250 units of product.During October the company worked 1,250 direct labor-hours and produced 300 units.The standard hours allowed for October would be:

The total variable cost at the activity level of 5,000 guest-days per month should be:

The net operating income in the planning budget for May would be closest to:

The variable overhead rate variance for January is:

What is the variable overhead rate variance for the month?

The labor efficiency variance for June is:

The standard price per unit for direct materials should reflect the final, delivered cost of the materials.

Wember Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports.The cost formula for catering supplies is $400 per month plus $82 per job plus $10 per meal.A typical job involves serving a number of meals to guests at a corporate function or at a host's home.The company expected its activity in September to be 20 jobs and 144 meals, but the actual activity was 16 jobs and 141 meals.The actual cost for catering supplies in September was $3,100.The catering supplies in the planning budget for September would be closest to:

The revenue in the company's flexible budget for January would have been closest to:

The direct labor in the planning budget for July would be closest to:

The variable overhead efficiency variance for the month is closest to:

The variable overhead rate variance for February is:

The raw materials price variance for the month is closest to:

The labor rate variance for August is:

The variable overhead rate variance for power is closest to:

If skilled workers with high hourly rates of pay are given duties that require little skill and call for lower hourly rates of pay, this will result in a favorable labor rate variance.

The spending variance for supplies costs for the month should be:

The following data have been provided by Lopus Corporation: Required: Compute the variable overhead rate variances for lubricants and for supplies.Indicate whether each of the variances is favorable (F)or unfavorable (U).Show your work!