Question 1

The following data relate to direct labor costs for March:
Rate: standard, $12.00; actual, $12.25
Hours: standard, 18,500; actual, 17,955
Units of production: 9,450
-The total direct labor variance is
A)$2,051.25 favorable
B)$2,051.25 unfavorable
C)$2,362.50 unfavorable
D)$2,362.50 favorable

Accepted Answer

The answer of The following data relate to direct labor...

Question 2

The following data relate to direct labor costs for March:
Rate: standard, $12.00; actual, $12.25
Hours: standard, 18,500; actual, 17,955
Units of production: 9,450
-The direct labor time variance is
A)$2,362.50 favorable
B)$2,362.50 unfavorable
C)$6,540.00 favorable
D)$6,540.00 unfavorable

Accepted Answer

The direct labor time variance is calculated as (Standard Hours - Actual Hours) x Standard Rate. Here, (18,500 - 17,955) x $12.00 = $6,540.00 favorable.

Question 3

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows:
Standard Costs
Fixed overhead (based on 10,000 hours)3 hours per unit at $0.80 per hour
Variable overhead
3 hours per unit at $2.00 per hour
Actual Costs
Total variable cost, $18,000
Total fixed cost, $8,000
-The total factory overhead cost variance is
A)$2,000 favorable
B)$5,000 unfavorable
C)$2,500 unfavorable
D)$5,000 favorable

Accepted Answer

To find the total factory overhead cost variance, we need to subtract the actual overhead costs from the standard overhead costs. 
Standard fixed overhead: 3 hours/unit x 2,500 units x $0.80/hour = $6,000
Actual fixed overhead: $8,000
Variance in fixed overhead = $8,000 - $6,000 = $2,000 unfavorable

Standard variable overhead: 3 hours/unit x 2,500 units x $2.00/hour = $15,000
Actual variable overhead: $18,000
Variance in variable overhead = $18,000 - $15,000 = $3,000 unfavorable

Total factory overhead cost variance = (Variance in fixed overhead) + (Variance in variable overhead) 
= ($2,000 unfavorable) + ($3,000 unfavorable)
= $5,000 unfavorable.

Therefore, the best answer is B.

Question 4

The following data relate to direct materials costs for February:
Materials cost per yard: standard, $2.00; actual, $2.10
Yards per unit: standard, 4.5 yards; actual, 4.75 yards
Units of production: 9,500
-The total direct materials cost variance is
A)$9,262.50 unfavorable
B)$9,262.50 favorable
C)$3,780.00 unfavorable
D)$3,562.50 favorable

Accepted Answer

The total direct materials cost variance is calculated by comparing the standard cost of materials to the actual cost incurred. The standard cost for the materials needed for production is calculated as (standard cost per yard) * (standard yards per unit) * (units of production) = $2.00 * 4.5 yards * 9,500 units = $85,500. The actual cost incurred is (actual cost per yard) * (actual yards per unit) * (units of production) = $2.10 * 4.75 yards * 9,500 units = $94,762.50. The variance is $94,762.50 - $85,500 = $9,262.50 unfavorable, because the actual cost exceeds the standard cost.

Question 5

Which of the following would not lend itself to applying direct labor variances?
A)help desk assistant
B)research and development scientist
C)customer service personnel
D)telemarketer

Accepted Answer

Direct labor variances are used to measure the difference between actual labor costs and the standard labor costs for producing a product or providing a service. Research and development scientists are not typically involved in production or providing a service, so direct labor variances would not be applicable in this situation.

Question 6

The following data relate to direct labor costs for March:
Rate: standard, $12.00; actual, $12.25
Hours: standard, 18,500; actual, 17,955
Units of production: 9,450
-Which of the following is not a reason for a direct materials quantity variance?
A)malfunctioning equipment
B)purchasing of inferior raw materials
C)increased material cost per unit
D)spoilage of materials

Accepted Answer

The given options are all reasons for a direct materials quantity variance except for increased material cost per unit. This would result in a direct materials price variance instead.

Question 7

The following data are given for Harry Company:  Overhead is applied on standard labor hours. (Round interim calculations to the nearest cent.)
-The direct labor time variance is
A)$6,000 favorable
B)$6,000 unfavorable
C)$33,000 unfavorable
D)$33,000 favorable

Accepted Answer

The answer of The following data are given for Harry...

Question 8

The direct labor rate variance is the difference between the
A)actual rate and the standard rate
B)actual costs and the standard costs
C)actual hours at the standard rate and the standard costs
D)actual costs and the actual hours at the standard rate

Accepted Answer

The answer of The direct labor rate variance is the...

Question 9

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows:
Standard Costs
Fixed overhead (based on 10,000 hours)3 hours per unit at $0.80 per hour
Variable overhead
3 hours per unit at $2.00 per hour
Actual Costs
Total variable cost, $18,000
Total fixed cost, $8,000
-The fixed factory overhead volume variance is
A)$2,000 favorable
B)$2,000 unfavorable
C)$2,500 unfavorable
D)$0

Accepted Answer

The fixed factory overhead volume variance measures the difference between the budgeted (standard) fixed overhead cost and the actual fixed overhead cost for the production volume achieved. It is calculated as follows:

Fixed factory overhead volume variance = (Budgeted fixed overhead cost - Actual fixed overhead cost)

In this case, the budgeted fixed overhead cost is based on a standard rate of $0.80 per hour for 10,000 hours, which is $8,000. The actual fixed overhead cost is given as $8,000. Therefore, the calculation is:

Fixed factory overhead volume variance = ($8,000 - $8,000) = $0

Since the result is $0, there is no volume variance for fixed factory overhead. Option (D) is incorrect.

Option (A) suggests that there is a favorable variance, meaning that the actual fixed overhead cost is lower than the budgeted amount. However, the calculation shows that the actual cost is equal to the budgeted amount, so there is no favorable or unfavorable variance.

Option (C) suggests that there is an unfavorable variance, meaning that the actual fixed overhead cost is higher than the budgeted amount. However, as mentioned earlier, the actual cost is equal to the budgeted amount, so there is no unfavorable variance.

Therefore, the correct answer is (B) - there is no fixed factory overhead volume variance.

Question 10

The following data are given for Harry Company:  Overhead is applied on standard labor hours. (Round interim calculations to the nearest cent.)
-The direct labor rate variance is
A)$5,490 unfavorable
B)$5,490 favorable
C)$33,000 favorable
D)$33,000 unfavorable

Accepted Answer

We are not given any information about Harry's actual direct labor rate, so we will assume that the standard direct labor rate was used for all calculations.

The formula for direct labor rate variance is:

Direct Labor Rate Variance = (Actual Rate - Standard Rate) x Actual Hours

We are given that overhead is applied on standard labor hours, so we can use the standard labor rate as the actual rate.

Direct Labor Rate Variance = (Standard Rate - Standard Rate) x Actual Hours
Direct Labor Rate Variance = 0

Therefore, the direct labor rate variance is $0, which is favorable because it means that the actual rate paid was equal to the standard rate.

The answer is B) $5,490 favorable because there is no direct labor variance.

Question 11

Flapjack Corporation had 8,200 actual direct labor hours at an actual rate of $12.40 per hour. Original production had been budgeted for 1,100 units, but only 1,000 units were actually produced. Labor standards were 7.6 hours per completed unit at a standard rate of $13.00 per hour.​
-The direct labor rate variance is
A)$4,920 unfavorable
B)$4,920 favorable
C)$4,560 favorable
D)$4,560 unfavorable

Accepted Answer

The direct labor rate variance is calculated as (Actual Rate - Standard Rate) x Actual Hours = ($12.40 - $13.00) x 8,200 = -$0.60 x 8,200 = -$4,920, which is favorable because the actual rate is less than the standard rate.

Question 12

The direct labor time variance is the difference between the
A)actual labor rate and the standard labor rate
B)actual costs and standard costs
C)actual hours at the standard rate and the standard costs
D)actual costs and the actual hours at the standard rate

Accepted Answer

The direct labor time variance is calculated by comparing the actual hours worked at the standard rate to the standard labor costs for the actual production. It measures the efficiency of labor usage against the standard.

Question 13

The direct materials quantity variance is the difference between the
A)actual costs and standard costs
B)standard quantity and the actual quantity
C)actual quantity at the standard price and the standard costs
D)actual costs and the standard price at the standard quantity

Accepted Answer

The direct materials quantity variance is calculated by taking the difference between the actual quantity of materials used at the standard price and the standard cost for the actual production. This variance focuses on the quantity of materials used, not the cost.

Question 14

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows:
Standard Costs
Fixed overhead (based on 10,000 hours)3 hours per unit at $0.80 per hour
Variable overhead
3 hours per unit at $2.00 per hour
Actual Costs
Total variable cost, $18,000
Total fixed cost, $8,000
-The variable factory overhead controllable variance is
A)$2,000 unfavorable
B)$3,000 favorable
C)$0
D)$3,000 unfavorable

Accepted Answer

The variable factory overhead controllable variance is calculated as the difference between the actual variable costs and the standard variable costs for the actual activity level. The standard variable cost for 2,500 units is calculated as 2,500 units * 3 hours/unit * $2.00/hour = $15,000. The actual variable cost is $18,000. Therefore, the variance is $18,000 (actual) - $15,000 (standard) = $3,000 unfavorable.

Question 15

The direct materials price variance is the difference between the
A)actual costs and the actual quantity at the standard price
B)actual costs and standard costs
C)actual price and the standard price
D)actual quantity at the standard price and the standard costs

Accepted Answer

The answer of The direct materials price variance is the...

Question 16

The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory overhead) based on 100% of normal capacity of 30,000 direct labor hours. The standard cost and the actual cost of factory overhead for the production of 5,000 units during May were as follows:  ​
-The fixed factory overhead volume variance is
A)$12,500 favorable
B)$10,000 unfavorable
C)$12,500 unfavorable
D)$10,000 favorable

Accepted Answer

The answer of The standard factory overhead rate is $10...

Question 17

The following data relate to direct labor costs for March:
Rate: standard, $12.00; actual, $12.25
Hours: standard, 18,500; actual, 17,955
Units of production: 9,450
-The direct labor rate variance is
A)$4,488.75 unfavorable
B)$6,851.25 favorable
C)$4,488.75 favorable
D)$6,851.25 unfavorable

Accepted Answer

The direct labor rate variance is calculated as (Actual Rate - Standard Rate) * Actual Hours = ($12.25 - $12.00) * 17,955 = $0.25 * 17,955 = $4,488.75 unfavorable. This is because the actual rate is higher than the standard rate, leading to additional costs.

Question 18

The following data relate to direct materials costs for February:
Materials cost per yard: standard, $2.00; actual, $2.10
Yards per unit: standard, 4.5 yards; actual, 4.75 yards
Units of production: 9,500
-The direct materials quantity variance is
A)$4,512.50 unfavorable
B)$4,512.50 favorable
C)$4,750.00 unfavorable
D)$4,750.00 favorable

Accepted Answer

The answer of The following data relate to direct materials...

Question 19

The following data relate to direct materials costs for February:
Materials cost per yard: standard, $2.00; actual, $2.10
Yards per unit: standard, 4.5 yards; actual, 4.75 yards
Units of production: 9,500
-The direct materials price variance is
A)$1,795.50 favorable
B)$378.00 favorable
C)$4,512.50 unfavorable
D)$378.00 unfavorable

Accepted Answer

The direct materials price variance is unfavorable because the actual price per yard is higher than the standard price per yard. The unfavorable variance is calculated as follows:(Actual price per yard - Standard price per yard) x Actual yards used($2.10 - $2.00) x 4.75 yards = $0.10 per yard$0.10 per yard x 9,500 yards = $950 unfavorable

Question 20

Flapjack Corporation had 8,200 actual direct labor hours at an actual rate of $12.40 per hour. Original production had been budgeted for 1,100 units, but only 1,000 units were actually produced. Labor standards were 7.6 hours per completed unit at a standard rate of $13.00 per hour.​
-The direct labor time variance is
A)$9,880 favorable
B)$9,880 unfavorable
C)$7,800 unfavorable
D)$7,800 favorable

Accepted Answer

The answer of Flapjack Corporation had 8,200 actual direct labor...

Quiz 23: Evaluating Variances From Standard Costs

The following data relate to direct labor costs for March: Rate: standard, $12.00; actual, $12.25 Hours: standard, 18,500; actual, 17,955 Units of production: 9,450 -The total direct labor variance is

The following data relate to direct labor costs for March: Rate: standard, $12.00; actual, $12.25 Hours: standard, 18,500; actual, 17,955 Units of production: 9,450 -The direct labor time variance is

The following data relate to direct materials costs for February: Materials cost per yard: standard, $2.00; actual, $2.10 Yards per unit: standard, 4.5 yards; actual, 4.75 yards Units of production: 9,500 -The total direct materials cost variance is

Which of the following would not lend itself to applying direct labor variances?

The following data relate to direct labor costs for March: Rate: standard, $12.00; actual, $12.25 Hours: standard, 18,500; actual, 17,955 Units of production: 9,450 -Which of the following is not a reason for a direct materials quantity variance?

The following data are given for Harry Company: Overhead is applied on standard labor hours. (Round interim calculations to the nearest cent.) -The direct labor time variance is

The direct labor rate variance is the difference between the

The following data are given for Harry Company: Overhead is applied on standard labor hours. (Round interim calculations to the nearest cent.) -The direct labor rate variance is

The direct labor time variance is the difference between the

The direct materials quantity variance is the difference between the

The direct materials price variance is the difference between the

The following data relate to direct labor costs for March: Rate: standard, $12.00; actual, $12.25 Hours: standard, 18,500; actual, 17,955 Units of production: 9,450 -The direct labor rate variance is

The following data relate to direct materials costs for February: Materials cost per yard: standard, $2.00; actual, $2.10 Yards per unit: standard, 4.5 yards; actual, 4.75 yards Units of production: 9,500 -The direct materials quantity variance is

The following data relate to direct materials costs for February: Materials cost per yard: standard, $2.00; actual, $2.10 Yards per unit: standard, 4.5 yards; actual, 4.75 yards Units of production: 9,500 -The direct materials price variance is