Question 1

ToolTime has a standard of 2 hours of labor per unit, at $12 per hour. In producing 2,000 units, ToolTime used 3,850 hours of labor at a total cost of $46,970. ToolTime's labor quantity variance is

Accepted Answer

The answer of ToolTime has a standard of 2 hours...

Question 2

The per-unit standards for direct materials are 2 pounds at $4 per pound. Last month, 11,200 pounds of direct materials that actually cost $42,400 were used to produce 6,000 units of product. The direct materials quantity variance for last month was

Accepted Answer

The standard quantity for 6,000 units is 12,000 pounds (6,000 units x 2 pounds/unit). The actual quantity used was 11,200 pounds. The quantity variance is (12,000 - 11,200) x $4 = $3,200 favorable.

Question 3

The standard rate of pay is $10 per direct labor hour. If the actual direct labor payroll was $39,200 for 4,000 direct labor hours worked, the direct labor price (rate) variance is

Accepted Answer

The actual rate per hour is $39,200 / 4,000 = $9.80. The standard rate is $10. The variance is ($10 - $9.80) * 4,000 = $800 favorable.

Question 4

Gant Co. manufactures a product with a standard direct labor cost of two hours at $24.00 per hour. During July, 2,000 units were produced using 4,200 hours at $24.40 per hour. The labor quantity variance was

Accepted Answer

The labor quantity variance is calculated as (Actual Hours - Standard Hours) x Standard Rate. Here, (4,200 - 4,000) x $24 = $4,800 Unfavorable.

Question 5

Herrera Co. produces a product requiring 10 pounds of material at $1.50 per pound. Herrera produced 10,000 units of this product during 2009 resulting in a $30,000 unfavorable materials quantity variance. How many pounds of direct material did Herrera use during 2011?

Accepted Answer

The unfavorable materials quantity variance indicates that Herrera used more material than allowed. The variance is calculated as (Actual quantity - Standard quantity) x Standard price. In this case, the variance is $30,000, the standard price is $1.50 per pound, and the standard quantity is 10 pounds per unit. Therefore, the actual quantity used is 10,000 units x 10 pounds per unit + $30,000 / $1.50 per pound = 120,000 pounds.

Question 6

Which one of the following describes the total overhead variance?

Accepted Answer

The total overhead variance is calculated as the difference between the actual overhead costs incurred and the overhead costs that were applied based on the standard cost system. This measures how well the company controlled its overhead costs in relation to what was expected or planned.

Question 7

ToolTime has a standard of 2 hours of labor per unit, at $12 per hour. In producing 2,000 units, ToolTime used 3,850 hours of labor at a total cost of $46,970. ToolTime's total labor variance is

Accepted Answer

ToolTime's standard labor cost is 2,000 units * 2 hours per unit * $12 per hour = $48,000. The actual labor cost is $46,970. Therefore, the labor variance is $48,000 - $46,970 = $1,030 F.

Question 8

The standard number of hours that should have been worked for the output attained is 10,000 direct labor hours and the actual number of direct labor hours worked was 10,500. If the direct labor price variance was $10,500 unfavorable, and the standard rate of pay was $15 per direct labor hour, what was the actual rate of pay for direct labor?

Accepted Answer

Direct labor price variance = (Actual rate - Standard rate) x Actual hours
-$10,500 = (Actual rate - $15) x 10,500
Actual rate = $16

Question 9

LRF, Inc. produces a product requiring 4 pounds of material costing $2.50 per pound. During December, LRF purchased 4,200 pounds of material for $10,080 and used the material to produce 500 products. What was the materials price variance for December?

Accepted Answer

The materials price variance is calculated as (Actual Price - Standard Price) x Actual Quantity. The standard price is $2.50 per pound, and the actual price is $10,080 / 4,200 pounds = $2.40 per pound. The variance is ($2.40 - $2.50) x 4,200 = $420 F (favorable).

Question 10

Gant Co. manufactures a product with a standard direct labor cost of two hours at $24.00 per hour. During July, 2,000 units were produced using 4,200 hours at $24.40 per hour. The labor price variance was

Accepted Answer

The labor price variance is calculated as (Actual Rate - Standard Rate) x Actual Hours. Here, it is ($24.40 - $24.00) x 4,200 = $1,680 Unfavorable (U).

Question 11

A company developed the following per unit materials standards for its product: 3 pounds of direct materials at $4 per pound. If 12,000 units of product were produced last month and 37,500 pounds of direct materials were used, the direct materials quantity variance was

Accepted Answer

The direct materials quantity variance is calculated as (Actual Quantity - Standard Quantity) x Standard Price. The standard quantity for 12,000 units is 36,000 pounds (12,000 units x 3 pounds/unit). The actual quantity used was 37,500 pounds. The variance is (37,500 - 36,000) x $4 = $6,000 unfavorable.

Question 12

The standard direct labor cost for producing one unit of product is 5 direct labor hours at a standard rate of pay of $12. Last month, 15,000 units were produced and 73,500 direct labor hours were actually worked at a total cost of $810,000. The direct labor quantity variance was

Accepted Answer

The answer of The standard direct labor cost for producing...

Question 13

A company purchases 15,000 pounds of materials. The materials price variance is $6,000 favorable. What is the difference between the standard and actual price paid for the materials?

Accepted Answer

The materials price variance is calculated as (Actual Price - Standard Price) x Actual Quantity. Given a $6,000 favorable variance and 15,000 pounds, the difference is $6,000 / 15,000 = $0.40 per pound.

Question 14

The per-unit standards for direct labor are 1.5 direct labor hours at $12 per hour. If in producing 2,400 units, the actual direct labor cost was $36,800 for 3,000 direct labor hours worked, the total direct labor variance is

Accepted Answer

The answer of The per-unit standards for direct labor are...

Question 15

ToolTime has a standard of 1.5 pounds of materials per unit, at $4 per pound. In producing 2,000 units, ToolTime used 3,100 pounds of materials at a total cost of $12,090. ToolTime's materials quantity variance is

Accepted Answer

Materials quantity variance = (Standard quantity of materials - Actual quantity of materials) x Standard price per unit

Standard quantity of materials = 1.5 pounds per unit x 2,000 units = 3,000 pounds
Actual quantity of materials = 3,100 pounds

Materials quantity variance = (3,000 - 3,100) x $4 = $400 U (Unfavorable because 3,100 pounds exceed the standard of 3,000 pounds)

Question 16

A company uses 40,000 gallons of materials for which they paid $9.00 a gallon. The materials price variance was $80,000 favorable. What is the standard price per gallon?

Accepted Answer

The answer of A company uses 40,000 gallons of materials...

Question 17

ToolTime has a standard of 1.5 pounds of materials per unit, at $4 per pound. In producing 2,000 units, ToolTime used 3,100 pounds of materials at a total cost of $12,090. ToolTime's materials price variance is

Accepted Answer

The answer of ToolTime has a standard of 1.5 pounds...

Question 18

ToolTime has a standard of 2 hours of labor per unit, at $12 per hour. In producing 2,000 units, ToolTime used 3,850 hours of labor at a total cost of $46,970. ToolTime's labor price variance is

Accepted Answer

The labor price variance is calculated as (Actual Hours x Actual Rate) - (Actual Hours x Standard Rate). The actual rate is $46,970 / 3,850 hours = $12.20. The standard rate is $12. The variance is (3,850 x $12.20) - (3,850 x $12) = $770 Unfavorable.

Question 19

ToolTime has a standard of 1.5 pounds of materials per unit, at $4 per pound. In producing 2,000 units, ToolTime used 3,100 pounds of materials at a total cost of $12,090. ToolTime's total variance is

Accepted Answer