Question 1

The standard costs and actual costs for direct materials for the manufacture of 3,000 actual units of product are ​
 The amount of direct materials price variance is
A) $2,750 unfavorable variance
B) $2,750 favorable variance
C) $1,500 favorable variance
D) $1,500 unfavorable variance

Accepted Answer

The answer of The standard costs and actual costs for...

Question 2

The following data relate to direct labor costs for the current period: ​
 What is the direct labor time variance?
A) $18,000 favorable
B) $18,000 unfavorable
C) $17,550 unfavorable
D) $17,550 favorable

Accepted Answer

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

Question 3

A favorable cost variance occurs when
A) actual costs are more than standard costs
B) standard costs are more than actual costs
C) standard costs are less than actual costs
D) actual costs are the same as standard costs

Accepted Answer

A favorable cost variance occurs when the actual costs incurred are less than the standard or expected costs, meaning the company spent less than anticipated.

Question 4

Myers Corporation has the following data related to direct materials costs for November: actual costs for 5,000 pounds of material,$​4.50; and standard costs for 4,800 pounds of material at $5.10 per pound. ​
What is the direct materials price variance?
A) ​$3,000 favorable
B) ​$3,000 unfavorable
C) ​$2,880 favorable
D) ​$2,880 unfavorable

Accepted Answer

The answer of Myers Corporation has the following data related...

Question 5

If the actual direct labor hours spent producing a commodity differs from the standard hours,the variance is a
A) time variance
B) price variance
C) quantity variance
D) rate variance

Accepted Answer

The answer of If the actual direct labor hours spent...

Question 6

Which of the following is not a reason standard costs are separated into two components?
A) The price and quantity variances need to be identified separately to correct the actual major differences
B) Identifying variances determines which manager must find a solution to major discrepancies
C) If a negative variance is overshadowed by a favorable variance,managers may overlook potential corrections
D) Variances bring attention to discrepancies in the budget and require managers to revise budgets closer to actual results

Accepted Answer

Standard costs are separated into price and quantity components primarily to identify where variances occur, assign responsibility, and ensure that negative variances are addressed. The separation is not specifically about revising budgets closer to actual results, but about managing and controlling costs effectively.

Question 7

The total manufacturing cost variance consists of
A) direct materials price variance,direct labor cost variance,and fixed factory overhead volume variance
B) direct materials cost variance,direct labor rate variance,and factory overhead cost variance
C) direct materials cost variance,direct labor cost variance,and variable factory overhead controllable variance
D) direct materials cost variance,direct labor cost variance,and factory overhead cost variance

Accepted Answer

The total manufacturing cost variance includes the direct materials cost variance, direct labor cost variance, and factory overhead cost variance. These three variances represent the differences between actual costs incurred and the standard costs that were expected to be incurred. The fixed factory overhead volume variance is not included in the total manufacturing cost variance because it is a separate variance that only applies to fixed factory overhead costs, while the other three variances apply to all manufacturing costs.

Question 8

The following data relate to direct labor costs for August: Actual costs: 5,500 hours at $24.00 per hour.
Standard costs: 5,000 hours at $23.70 per hour.
​
What is the direct labor rate variance?
​
A) ​$1,650 favorable
B) ​$1,650 unfavorable
C) ​$1,500 favorable
D) ​$1,500 unfavorable

Accepted Answer

Direct labor rate variance = (Actual rate - Standard rate) x Actual hours

= ($24.00 - $23.70) x 5,500 hours

= $1,650 unfavorable.

Question 9

The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are ​​
 The amount of the direct materials quantity variance is
A) $875 favorable variance
B) $850 unfavorable variance
C) $850 favorable variance
D) $875 unfavorable variance

Accepted Answer

The answer of The standard costs and actual costs for...

Question 10

Myers Corporation has the following data related to direct materials costs for November: actual costs for 5,000 pounds of material at $​4.50; and standard costs for 4,800 pounds of material at $5.10 per pound. ​
What is the direct materials quantity variance?
A) ​$1,020 favorable
B) ​​$1,020 unfavorable
C) ​$900 favorable
D) ​$900 unfavorable

Accepted Answer

The direct materials quantity variance is calculated as (Actual Quantity - Standard Quantity) x Standard Price. Here, it's (5,000 - 4,800) x $5.10 = 200 x $5.10 = $1,020 unfavorable, because the actual quantity used is more than the standard quantity allowed.

Question 11

If the wage rate paid per hour differs from the standard wage rate per hour for direct labor,the variance is a
A) variable variance
B) rate variance
C) quantity variance
D) volume variance

Accepted Answer

The variance described in the question is a rate variance, which occurs when the actual wage rate paid per hour differs from the standard wage rate per hour. A variable variance refers to a variance that changes proportionally with the level of activity, while a quantity variance refers to a variance that occurs when the actual quantity of direct labor hours used differs from the standard quantity of direct labor hours allowed for the units produced. A volume variance refers to a variance that occurs when the actual number of units produced differs from the standard number of units expected to be produced. None of these definitions fit the variance described in the question, making choice B - rate variance - the best option.

Question 12

The direct materials price variance is
A) $22,800 unfavorable
B) $22,800 favorable
C) $52,000 unfavorable
D) $52,000 favorable

Accepted Answer

The answer of The direct materials price variance is
A) $22,800...

Question 13

The materials price variance is
A) $0
B) $59,400 unfavorable
C) $59,400 favorable
D) $6,000 unfavorable

Accepted Answer

The answer of The materials price variance is
A) $0
B) $59,400...

Question 14

Jaxson Corporation has the following data related to direct labor costs for September: actual costs are 10,200 hours at $15.75 per hour and standard costs are 10,800 hours at $15.50 per hour. ​
What is the direct labor time variance?
A) ​$9,300 favorable
B) ​​$9,300 unfavorable
C) ​$9,450 favorable
D) ​​$9,450 unfavorable

Accepted Answer

The answer of Jaxson Corporation has the following data related...

Question 15

If the price paid per unit differs from the standard price per unit for direct materials,the variance is a
A) variable variance
B) controllable variance
C) price variance
D) volume variance

Accepted Answer

If the price paid per unit differs from the standard price per unit for direct materials, it results in a price variance. The other options are not relevant in this scenario - variable variance is typically used to refer to the variance in variable costs (not just direct materials), controllable variance relates to factors within the control of the organization (such as labor costs or manufacturing overhead costs), and volume variance relates to the difference between the actual level of activity and the expected level of activity.

Question 16

If the actual quantity of direct materials used in producing a commodity differs from the standard quantity,the variance is a
A) controllable variance
B) price variance
C) quantity variance
D) rate variance

Accepted Answer

The variance that arises when the actual quantity of direct materials used in production differs from the standard quantity is known as a quantity variance. This variance measures the difference between the actual quantity used and the expected or standard quantity allowed for the output achieved. The other options are not relevant to this variance. Controllable variance is a variance that can be controlled by management, price variance is the variance resulting from the difference between actual and standard price, and rate variance is the variance that arises when the actual hourly rate paid is different from the standard rate specified for the actual hours worked.

Question 17

The direct materials quantity variance is
A) 22,800 favorable
B) 22,800 unfavorable
C) 52,000 favorable
D) 52,000 unfavorable

Accepted Answer

The answer of The direct materials quantity variance is
A) 22,800...

Question 18

Standard costs are divided into which of the following components?
A) variance standard and quantity standard
B) materials standard and labor standard
C) quality standard and quantity standard
D) price standard and quantity standard

Accepted Answer

Standard costs are typically divided into price standard (reflecting the expected price to be paid for materials or labor) and quantity standard (reflecting the expected quantity of materials or labor to be used).

Question 19

The total manufacturing cost variance is
A) the difference between actual costs and standard costs for units produced
B) the flexible budget variance plus the time variance
C) the difference between planned costs and standard costs for units produced
D) none of the answers are correct

Accepted Answer

The total manufacturing cost variance is the difference between actual costs and standard costs for units produced. This measures the overall difference between what was actually spent on manufacturing a product and what should have been spent based on the predetermined standards.

Question 20

The materials quantity variance is
A) 63,000 favorable
B) 63,000 unfavorable
C) 59,400 favorable
D) 59,400 unfavorable

Accepted Answer

The answer of The materials quantity variance is
A) 63,000 favorable
B)...

Quiz 22: Evaluating Variances From Standard Costs

The standard costs and actual costs for direct materials for the manufacture of 3,000 actual units of product are The amount of direct materials price variance is

The following data relate to direct labor costs for the current period: What is the direct labor time variance?

A favorable cost variance occurs when

Myers Corporation has the following data related to direct materials costs for November: actual costs for 5,000 pounds of material,$4.50; and standard costs for 4,800 pounds of material at $5.10 per pound. What is the direct materials price variance?

If the actual direct labor hours spent producing a commodity differs from the standard hours,the variance is a

Which of the following is not a reason standard costs are separated into two components?

The total manufacturing cost variance consists of

The following data relate to direct labor costs for August: Actual costs: 5,500 hours at $24.00 per hour. Standard costs: 5,000 hours at $23.70 per hour. What is the direct labor rate variance?

The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are The amount of the direct materials quantity variance is

Myers Corporation has the following data related to direct materials costs for November: actual costs for 5,000 pounds of material at $4.50; and standard costs for 4,800 pounds of material at $5.10 per pound. What is the direct materials quantity variance?

If the wage rate paid per hour differs from the standard wage rate per hour for direct labor,the variance is a

The direct materials price variance is

The materials price variance is

Jaxson Corporation has the following data related to direct labor costs for September: actual costs are 10,200 hours at $15.75 per hour and standard costs are 10,800 hours at $15.50 per hour. What is the direct labor time variance?

If the price paid per unit differs from the standard price per unit for direct materials,the variance is a

If the actual quantity of direct materials used in producing a commodity differs from the standard quantity,the variance is a

The direct materials quantity variance is

Standard costs are divided into which of the following components?

The total manufacturing cost variance is

The materials quantity variance is