Question 1

A job was budgeted to require three hours of labor per unit at $8 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 labor rate variance?
A)$22,000 unfavorable
B)$16,000 unfavorable
C)$6,000 unfavorable
D)$16,000 favorable
E)$22,000 favorable

Accepted Answer

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

Question 2

A company has established 5 pounds of Material M at $2 per pound as the standard for the material in its Product A. The company has just produced 1,000 units of this product, using 5,200 pounds of Material M that cost $9,880. 
-The direct materials price variance is:
A)$520 unfavorable
B)$400 unfavorable
C)$120 favorable
D)$520 favorable
E)$400 favorable

Accepted Answer

$9,880 - ($2 x 5,200 pounds) = $520 favorable

Question 3

A job was budgeted to require three hours of labor per unit at $8 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 efficiency variance?
A)$22,000 unfavorable
B)$16,000 unfavorable
C)$6,000 unfavorable
D)$16,000 favorable
E)$22,000 favorable

Accepted Answer

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

Question 4

Use the following data to find the direct labor rate variance. $\begin{array}{llcc}
  \text { Direct labor standard (4 hrs. @\$7/hr.)  } & \text {\$ 28  per unit   }  \
 \text { Actual hours worked per unit  } & \text {  3.5  hours  }  \
 \text { Actual units produced  } & \text { 3,500 units  }  \
 \text { Actual rate per hour  } & \text { \$ 7.50    }  \
\end{array}$

A)$6,125 unfavorable
B)$7,000 unfavorable
C)$7,000 favorable
D)$12,250 favorable
E)$6,125 favorable

Accepted Answer

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

Standard rate = $7/hr
Actual rate = $7.50/hr
Actual hours worked per unit = 3.5 hrs
Actual units produced = 3,500 units

Direct labor rate variance = (7.50 - 7) x 3.5 x 3,500
= $6,125 unfavorable

Therefore, the correct answer is A) $6,125 unfavorable.

Question 5

A job was budgeted to require three hours of labor per unit at $8 per hour. The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000. 
-The entry to record the labor costs and variances would include a:
A)debit to Goods in Process for $198,000.
B)credit to Factory Payroll for $192,000.
C)debit to Direct Labor Cost Variance for $6,000.
D)credit to Direct Labor Cost Variance for $6,000.
E)credit to Direct Labor Efficiency Variance for $16,000

Accepted Answer

Rate variance: $198,000 - (22,000 hours x $8) = $22,000 unfavorable
Debit to DL rate variance $22,000
Efficiency variance: ($8 x 22,000) - [$8 x (8,000 x 3 hours)] = $16,000 favorable
Credit to DL efficiency variance $16,000
Total labor cost: $198,000
Credit to factory payroll $198,000
Standard labor cost: ($8 x 3 hours) x 8,000 units = $192,000
Debit to GIP $192,000

Question 6

Use the following data to find the direct labor efficiency variance. $\begin{array}{llcc}
  \text { Direct labor standard (4 hrs. @\$7/hr.)  } & \text {\$ 28  per unit   }  \
 \text { Actual hours worked per unit  } & \text {  3.5  hours  }  \
 \text { Actual units produced  } & \text { 3,500 units  }  \
 \text { Actual rate per hour  } & \text { \$ 7.50    }  \
\end{array}$

A)$6,125 unfavorable
B)$7,000 unfavorable
C)$7,000 favorable
D)$12,250 favorable
E)$6,125 favorable

Accepted Answer

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

Question 7

The following company information is available: $\begin{array}{ll}
\text { Direct materials used for production } & 36,000\text { gallons } \
\text { Standard quantity for units produced } & 34,400\text { gallons } \
\text { Standard cost per gallon of direct material } & \$ 6.00 \
\text { Actual cost per gallon of direct material } & \$ 6.10
\end{array}$ The direct materials quantity variance is:
A)$10,000 unfavorable
B)$13,200 unfavorable
C)$9,600 unfavorable
D)$3,600 unfavorable
E)$13,200 favorable

Accepted Answer

Direct materials quantity variance = (actual quantity used - standard quantity for units produced) x standard cost per gallon

= (36,000 - 34,400) x $6.00

= 1,600 x $6.00

= $9,600 unfavorable

Therefore, the correct answer is option C.

Question 8

A company has established 5 pounds of Material M at $2 per pound as the standard for the material in its Product A. The company has just produced 1,000 units of this product, using 5,200 pounds of Material M that cost $9,880. 
-The direct materials quantity variance is:
A)$400 unfavorable
B)$120 favorable
C)$400 favorable
D)$520 favorable
E)$520 unfavorable

Accepted Answer

($2 x 5,200 pounds) - [$2 (1,000 units x 5 pounds)] = $400 unfavorable

Question 9

The following company information is available: $\begin{array}{ll}
\text { Direct materials used for production } & 36,000\text { gallons } \
\text { Standard quantity for units produced } & 34,400\text { gallons } \
\text { Standard cost per gallon of direct material } & \$ 6.00 \
\text { Actual cost per gallon of direct material } & \$ 6.10
\end{array}$ The direct materials price variance is:
A)$10,000 unfavorable
B)$13,200 unfavorable
C)$9,600 unfavorable
D)$3,600 unfavorable
E)$13,200 favorable

Accepted Answer

The answer of The following company information is available: \(\begin{array}{ll}
\text...

Question 10

Bartels Corp.produces woodcarvings.It takes two hours of direct labor to produce a carving.Bartels' standard labor cost is $12 per hour.During August, Bartels produced 10,000 carvings and used 21,040 hours of direct labor at a total cost of $250,376.What is Bartels' labor rate variance for August?
A)$10,376 unfavorable
B)$2,104 unfavorable
C)$2,104 favorable
D)$12,480 unfavorable
E)$ 12,480 favorable

Accepted Answer

$250,376 - ($12 x 21,040 hrs.) = $2,104 favorable

Question 11

Bradford Company budgeted 4,000 pounds of material costing $5 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)$400 unfavorable
B)$450 unfavorable
C)$2,500 unfavorable
D)$2,550 unfavorable
E)$2,950 unfavorable

Accepted Answer

Direct Materials Price Variance = (Actual Price - Standard Price) x Actual Quantity

Standard Price = $5 per pound
Actual Price = $5.10 per pound
Actual Quantity = 4,500 pounds

Direct Materials Price Variance = ($5.10 - $5) x 4,500 = $450 unfavorable

Question 12

Bartels Corp.produces woodcarvings.It takes two hours of direct labor to produce a carving.Bartels' standard labor cost is $12 per hour.During August, Bartels produced 10,000 carvings and used 21,040 hours of direct labor at a total cost of $250,376.What is Bartels' labor efficiency variance for August?
A)$10,376 unfavorable
B)$2,104 unfavorable
C)$2,104 favorable
D)$12,480 unfavorable
E)$ 12,480 favorable

Accepted Answer

Labor efficiency variance = (Standard hours - Actual hours) x Standard labor cost per hour

Standard hours = 2 hours per carving x 10,000 carvings = 20,000 hours 
Actual hours = 21,040 hours 
Standard labor cost per hour = $12

Labor efficiency variance = (20,000 - 21,040) x $12 = $12,480 unfavorable

Question 13

The standard materials cost to produce one unit of Product M 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 material cost variance?
A)$48,000 unfavorable
B)$51,000 favorable
C)$51,000 unfavorable
D)$ 3,000 favorable
E)$ 3,000 unfavorable

Accepted Answer

Price variance = $1 x 47,000 pounds = $47,000 unfavorable
Quantity variance = 1,000 pounds x $50 = $50,000 favorable
Total material cost variance = $3,000 favorable

Question 14

The following company information is available for January:  
$\begin{array}{llcc}
  \text { Direct materials used  } & \text {  2,500 feet @ \$ 55  per foot  }  \
  \text {  Standard costs for direct materials for January  } & \text { 2,600 feet @ \$53 per foot   }  \
  \text {  production }  \
\end{array}$

The direct material quantity variance is:
A)$5,000 favorable
B)$300 favorable
C)$5,300 unfavorable
D)$5,000 unfavorable
E)$5,300 favorable

Accepted Answer

The direct material quantity variance is unfavorable because the actual quantity used (2,500 feet) is less than the standard quantity allowed (2,600 feet). The unfavorable variance is calculated as follows:Unfavorable variance = (Standard quantity - Actual quantity) x Standard price= (2,600 feet - 2,500 feet) x $53 per foot= 100 feet x $53 per foot= $5,300

Question 15

The following company information is available for January: 
$\begin{array}{llcc}
  \text { Direct materials used  } & \text {  2,500 feet @ \$ 55  per foot  }  \
  \text {  Standard costs for direct materials for January  } & \text { 2,600 feet @ \$53 per foot   }  \
  \text {  production }  \
\end{array}$

The direct material price variance is:
A)$5,000 favorable
B)$ 300 favorable
C)$5,300 unfavorable
D)$5,000 unfavorable
E)$5,300 favorable

Accepted Answer

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

Question 16

The following company information is available: $$\begin{array} { l l } 
\text { Direct materials used for production } & 712 \text { pounds } \
\text { Standard quantity for units produced } & 750 \text { pounds } \
\text { Stardard cost per pound of direct material } & \$ 48 \
\text { Actual cost per pound of direct material } & \$ 50
\end{array}$$ The direct materials quantity variance is:
A)$1,824 favorable
B)$1,424 favorable
C)$400 favorable
D)$1,824 unfavorable
E)$1,424 unfavorable

Accepted Answer

The direct materials quantity variance is calculated as (Standard Quantity - Actual Quantity) x Standard Cost per Pound. Here, (750 - 712) x $48 = $1,824 favorable.

Question 17

Bartels Corp.produces woodcarvings.It takes two hours of direct labor to produce a carving.Bartels' standard labor cost is $12 per hour.During August, Bartels produced 10,000 carvings and used 21,040 hours of direct labor at a total cost of $250,376.What is Bartels' labor cost variance for August?
A)$10,376 unfavorable
B)$2,104 unfavorable
C)$2,104 favorable
D)$12,480 unfavorable
E)$ 12,480 favorable

Accepted Answer

$250,376 - (20,000 hrs. x $12) = $10,376 unfavorable

Question 18

Use the following data to find the total direct labor cost variance: $\begin{array}{llcc}
  \text { Direct labor standard (4 hrs. @\$7/hr.)  } & \text {\$ 28  per unit   }  \
 \text { Actual hours worked per unit  } & \text {  3.5  hours  }  \
 \text { Actual units produced  } & \text { 3,500 units  }  \
 \text { Actual rate per hour  } & \text { \$ 7.50    }  \
\end{array}$

A)$6,125 unfavorable
B)$7,000 unfavorable
C)$7,000 favorable
D)$12,250 favorable
E)$6,125 favorable

Accepted Answer

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

Question 19

Bradford Company budgeted 4,000 pounds of material costing $5 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?
A)$400 unfavorable
B)$450 unfavorable
C)$2,500 unfavorable
D)$2,550 unfavorable
E)$2,950 unfavorable

Accepted Answer

($5 x 4,500 pounds) - ($5 x [2,000 units x (4,000/2,000)]) = $2,500 unfavorable

Question 20

A job was budgeted to require three hours of labor per unit at $8 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?
A)$22,000 unfavorable
B)$16,000 unfavorable
C)$6,000 unfavorable
D)$16,000 favorable
E)$22,000 favorable

Accepted Answer

Rate variance: $198,000 - (22,000 hours x $8) = $22,000 unfavorable
Efficiency variance: ($8 x 22,000) - [$8 x (8,000 x 3 hours)] = $16,000 favorable
Total labor cost variance = $6,000 unfavorable

Quiz 8: Flexible Budgets and Standard Costing

A job was budgeted to require three hours of labor per unit at $8 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 labor rate variance?

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

A job was budgeted to require three hours of labor per unit at $8 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 efficiency variance?

A job was budgeted to require three hours of labor per unit at $8 per hour. The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000. -The entry to record the labor costs and variances would include a:

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

Bartels Corp.produces woodcarvings.It takes two hours of direct labor to produce a carving.Bartels' standard labor cost is $12 per hour.During August, Bartels produced 10,000 carvings and used 21,040 hours of direct labor at a total cost of $250,376.What is Bartels' labor rate variance for August?

Bradford Company budgeted 4,000 pounds of material costing $5 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?

The standard materials cost to produce one unit of Product M 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 material cost variance?

Bartels Corp.produces woodcarvings.It takes two hours of direct labor to produce a carving.Bartels' standard labor cost is $12 per hour.During August, Bartels produced 10,000 carvings and used 21,040 hours of direct labor at a total cost of $250,376.What is Bartels' labor cost variance for August?

Bradford Company budgeted 4,000 pounds of material costing $5 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?

A job was budgeted to require three hours of labor per unit at $8 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?