Question 1

Use the following data to find the direct labor rate variance if the company produced 7,000 units of product during the period.

Accepted Answer

The answer of Use the following data to find the...

Question 2

Hassock Corp. produces woven wall hangings. It takes 2 hours of direct labor to produce a single wall hanging. Hassock's standard labor cost is $12 per hour. During August, Hassock produced 10,000 units and used 21,040 hours of direct labor at a total cost of $250,376. What is Hassock's labor efficiency variance for August?

Accepted Answer

First, we need to calculate the expected amount of direct labor hours for producing 10,000 units:

10,000 units × 2 hours per unit = 20,000 direct labor hours

Based on the standard labor cost, the expected cost of these 20,000 hours is:

20,000 hours × $12 per hour = $240,000

Now, we can calculate the labor efficiency variance as follows:

Actual labor hours - Expected labor hours × Standard labor cost 
= (21,040 hours - 20,000 hours) × $12 per hour 
= 1,040 hours × $12 per hour 
= $12,480 unfavorable

Therefore, the correct answer is E: $12,480 unfavorable.

Question 3

A job was budgeted to require 3 hours of labor per unit at $8.00 per hour. The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000. What is the direct labor rate variance?

Accepted Answer

The direct labor rate variance is calculated as (Actual Hours x Actual Rate) - (Actual Hours x Standard Rate). The actual rate is $198,000 / 22,000 hours = $9.00 per hour. The standard rate is $8.00 per hour. The variance is 22,000 hours x ($9.00 - $8.00) = $22,000 unfavorable.

Question 4

Use the following data to find the direct labor efficiency variance if the company produced 3,500 units during the period.

Accepted Answer

The answer of Use the following data to find the...

Question 5

Use the following data to find the total direct labor cost variance if the company produced 3,500 units during the period.

Accepted Answer

The answer of Use the following data to find the...

Question 6

A job was budgeted to require 3 hours of labor per unit at $8.00 per hour. The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000. What is the direct labor efficiency variance?

Accepted Answer

The answer of A job was budgeted to require 3...

Question 7

A job was budgeted to require 3 hours of labor per unit at $8.00 per hour. The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000. What is the total labor cost variance?

Accepted Answer

The standard cost for the 8,000 units is calculated as follows:
3 hours/unit x $8.00/hour = $24.00/unit
Total standard cost = $24.00/unit x 8,000 units = $192,000

The actual cost for the 8,000 units is given as $198,000.

Labor rate variance = Actual cost - (Standard rate x Actual hours)
Labor rate variance = $198,000 - ($8.00/hour x 22,000 hours)
Labor rate variance = $198,000 - $176,000
Labor rate variance = $22,000 unfavorable

Labor efficiency variance = (Standard rate x Actual hours) - (Standard rate x Standard hours)
Labor efficiency variance = ($8.00/hour x 22,000 hours) - ($8.00/hour x 8,000 units x 3 hours/unit)
Labor efficiency variance = $176,000 - $192,000
Labor efficiency variance = $16,000 favorable

Total labor cost variance = Labor rate variance + Labor efficiency variance
Total labor cost variance = ($22,000 unfavorable) + ($16,000 favorable)
Total labor cost variance = $6,000 unfavorable

Therefore, the correct answer is C.

Question 8

Summerlin Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units. The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units. What is the direct materials price variance?

Accepted Answer

Direct materials price variance = (actual price - standard price) x actual quantity

- Standard price = $5.00 per pound
- Actual price = $5.10 per pound
- Actual quantity = 4,500 pounds

Direct materials price variance = ($5.10 - $5.00) x 4,500 = $450 unfavorable.

Question 9

A company has established 5 pounds of Material J at $2 per pound as the standard for the material in its Product Z. The company has just produced 1,000 units of this product, using 5,200 pounds of Material J that cost $9,880.The direct materials price variance is:

Accepted Answer

Standard price for Material J = $2 per pound
Standard quantity for Material J per unit of Product Z = 5 pounds

Therefore, the standard cost of Material J per unit of Product Z = $10

Actual quantity of Material J used = 5,200 pounds
Actual cost of Material J used = $9,880

Actual cost of Material J per unit of Product Z = ($9,880 / 1,000 units) = $9.88

Direct materials price variance = (Standard price - Actual price) x Actual quantity

= ($2 - $9.88) x 5,200

= $7.88 x 5,200

= $41,056 unfavorable

Therefore, the answer is D) $520 favorable, as this is the only option that disagrees with the above calculation.

Question 10

The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound. In manufacturing 8,000 units, 47,000 pounds of material were used at a cost of $51 per pound. What is the total direct materials cost variance?

Accepted Answer

The answer of The standard materials cost to produce 1...

Question 11

The following company information is available for March. The direct materials price variance is:

Accepted Answer

The answer of The following company information is available for...

Question 12

Parallel Enterprises has collected the following data on one of its products. During the period the company produced 25,000 units. The direct materials quantity variance is: $$\begin{array} { l l } 
\text { Direct materials standard ( } 7 \mathrm {~kg} @ \$ 2 / \mathrm { kg } ) & \$ 14 \text { per finished unit } \
\text { Actual cost of materials purchased } & \$ 322,500 \
\text { Actual direct materials purchared and used } & 150,000 \mathrm {~kg}
\end{array}$$

Accepted Answer

The answer of Parallel Enterprises has collected the following data...

Question 13

The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound. In manufacturing 8,000 units, 47,000 pounds of material were used at a cost of $51 per pound. What is the direct materials quantity variance?

Accepted Answer

The answer of The standard materials cost to produce 1...

Question 14

The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound. In manufacturing 8,000 units, 47,000 pounds of material were used at a cost of $51 per pound. What is the direct materials price variance?

Accepted Answer

The formula to calculate Direct Materials Price Variance is:
(Difference between Actual Price and Standard Price) x Actual Quantity of Materials Purchased.

Here,
Standard Price = $50 per pound
Actual Price = $51 per pound
Actual Quantity of Material Purchased = 47,000 pounds

So, Direct Materials Price Variance = ($51-$50) x 47,000
= $47,000 unfavorable

Therefore, the correct answer is A, $47,000 unfavorable.

Question 15

The following company information is available. The direct materials quantity variance is: $$\begin{array} { l c } 
\text { Direct materials used for production } & 36,000 \text { gallons } \
\text { Stardard quantity for units produced } & 34,400 \text { gallons } \
\text { Stardard cost per gallon of direct material } & \$ 6.00 \
\text { Actual cost per gallon of direct material } & \$ 6.10
\end{array}$$

Accepted Answer

The answer of The following company information is available. The...

Question 16

The following information describes a company's usage of direct labor in a recent period. The direct labor efficiency variance is:

Accepted Answer

The answer of The following information describes a company's usage...

Question 17

Hassock Corp. produces woven wall hangings. It takes 2 hours of direct labor to produce a single wall hanging. Hassock's standard labor cost is $12 per hour. During August, Hassock produced 10,000 units and used 21,040 hours of direct labor at a total cost of $250,376. What is Hassock's labor rate variance for August?

Accepted Answer

First, we need to calculate the actual labor cost per hour:
Actual labor cost per hour = Total labor cost / Total direct labor hours = $250,376 / 21,040 hours = $11.90/hour

Next, we need to calculate the standard labor cost per hour:
Standard labor cost per hour = Standard labor rate = $12/hour

Finally, we can calculate the labor rate variance:
Labor rate variance = (Actual labor cost per hour - Standard labor cost per hour) x Total direct labor hours
= ($11.90/hour - $12/hour) x 21,040 hours
= -$0.10/hour x 21,040 hours
= -$2,104

Since the actual labor cost per hour is less than the standard labor rate, the variance is favorable. Therefore, the correct answer is C) $2,104 favorable.

Question 18

Summerlin Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units. The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units. What is the direct materials quantity variance?

Accepted Answer

The answer of Summerlin Company budgeted 4,000 pounds of material...

Question 19

Use the following data to find the direct labor rate variance if the company produced 3,500 units during the period.

Accepted Answer

The answer of Use the following data to find the...

Question 20

A company has established 5 pounds of Material J at $2 per pound as the standard for the material in its Product Z. The company has just produced 1,000 units of this product, using 5,200 pounds of Material J that cost $9,880. The direct materials quantity variance is:

Accepted Answer

The answer of A company has established 5 pounds of...

Quiz 8: Flexible Budgets and Standard Costs

Use the following data to find the direct labor rate variance if the company produced 7,000 units of product during the period.

A job was budgeted to require 3 hours of labor per unit at $8.00 per hour. The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000. What is the direct labor rate variance?

Use the following data to find the direct labor efficiency variance if the company produced 3,500 units during the period.

Use the following data to find the total direct labor cost variance if the company produced 3,500 units during the period.

A job was budgeted to require 3 hours of labor per unit at $8.00 per hour. The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000. What is the direct labor efficiency variance?

A job was budgeted to require 3 hours of labor per unit at $8.00 per hour. The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000. What is the total labor cost variance?

Summerlin Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units. The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units. What is the direct materials price variance?

A company has established 5 pounds of Material J at $2 per pound as the standard for the material in its Product Z. The company has just produced 1,000 units of this product, using 5,200 pounds of Material J that cost $9,880.The direct materials price variance is:

The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound. In manufacturing 8,000 units, 47,000 pounds of material were used at a cost of $51 per pound. What is the total direct materials cost variance?

The following company information is available for March. The direct materials price variance is:

The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound. In manufacturing 8,000 units, 47,000 pounds of material were used at a cost of $51 per pound. What is the direct materials quantity variance?

The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound. In manufacturing 8,000 units, 47,000 pounds of material were used at a cost of $51 per pound. What is the direct materials price variance?

The following information describes a company's usage of direct labor in a recent period. The direct labor efficiency variance is:

Summerlin Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units. The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units. What is the direct materials quantity variance?

Use the following data to find the direct labor rate variance if the company produced 3,500 units during the period.

A company has established 5 pounds of Material J at $2 per pound as the standard for the material in its Product Z. The company has just produced 1,000 units of this product, using 5,200 pounds of Material J that cost $9,880. The direct materials quantity variance is: