Question 1

The standard cost card for one unit of a certain finished product shows the following:  If the total standard variable cost for one unit of finished product is $85, then the standard price per pound for direct materials is:

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Question 2

Blue Corporation's standards call for 2,500 direct labor-hours to produce 1,000 units of product. During May 900 units were produced and the company worked 2,400 direct labor-hours. The standard hours allowed for May production would be:

Accepted Answer

To determine the standard hours allowed, we need to use the standard labor-hours per unit and multiply it by the actual number of units produced.

Standard labor-hours per unit = 2,500/1,000 = 2.5 hours per unit

Standard hours allowed for May production = 2.5 hours per unit x 900 units = 2,250 hours.

Therefore, the best choice is C, 2,250 hours.

Question 3

The following labor standards have been established for a particular product:  The following data pertain to operations concerning the product for the last month:  What is the labor efficiency variance for the month?

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Question 4

Merle Corporation applies manufacturing overhead to products on the basis of standard machine-hours. For the most recent month, the company based its budget on 4,000 machine-hours. Budgeted and actual overhead costs for the month appear below:  The company actually worked 3,690 machine-hours during the month. The standard hours allowed for the actual output were 3,620 machine-hours for the month. What was the overall variable overhead efficiency variance for the month?

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Question 5

The following materials standards have been established for a particular product:  The following data pertain to operations concerning the product for the last month:  What is the materials quantity variance for the month?

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Question 6

The following labor standards have been established for a particular product:  The following data pertain to operations concerning the product for the last month:  What is the labor rate variance for the month?

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Question 7

Sholette Manufacturing Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs) at $5.00 per MH. During the month, the actual total variable manufacturing overhead was $22,540 and the actual level of activity for the period was 4,600 MHs. What was the variable overhead rate variance for the month?

Accepted Answer

Variable overhead rate variance = (Actual variable overhead rate - Budgeted variable overhead rate) x Actual hours

Budgeted variable overhead rate = $5.00 per MH

Actual variable overhead rate = Actual variable overhead / Actual hours = $22,540 / 4,600 MHs = $4.90 per MH

Variable overhead rate variance = ($4.90 - $5.00) x 4,600 MHs = $460 favorable.

Question 8

Machain Corporation applies manufacturing overhead to products on the basis of standard machine-hours. The company's standard variable manufacturing overhead rate is $2.90 per machine-hour. The actual variable manufacturing overhead cost for the month was $15,270. The original budget for the month was based on 5,000 machine-hours. The company actually worked 5,090 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 5,200 machine-hours. What was the variable overhead efficiency variance for the month?

Accepted Answer

The variable overhead efficiency variance is calculated as (Standard hours allowed - Actual hours worked) x Standard rate. Here, (5,200 - 5,090) x $2.90 = 110 x $2.90 = $319 Favorable.

Question 9

Sperazza Corporation produces large commercial doors for warehouses and other facilities. In the most recent month, the company budgeted production of 4,900 doors. Actual production was 5,300 doors. According to standards, each door requires 6.4 machine-hours. The actual machine-hours for the month were 34,340 machine-hours. The standard supplies cost is $3.10 per machine-hour. The actual supplies cost for the month was $99,331. Supplies cost is an element of variable manufacturing overhead. The variable overhead efficiency variance for supplies cost is:

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Question 10

The following standards for variable manufacturing overhead have been established for a company that makes only one product:  The following data pertain to operations for the last month:  What is the variable overhead efficiency variance for the month?

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Question 11

Krizum Industries makes heavy construction equipment. The standard for a particular crane calls for 24 direct labor-hours at $16 per direct labor-hour. During a recent period 850 cranes were made. The labor rate variance was zero and the labor efficiency variance was $8,800 unfavorable. How many actual direct labor-hours were worked?

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Question 12

Welcome Corporation produces metal telephone poles. In the most recent month, the company budgeted production of 4,100 poles. Actual production was 4,400 poles. According to standards, each pole requires 7.0 machine-hours. The actual machine-hours for the month were 31,140 machine-hours. The standard variable manufacturing overhead rate is $2.50 per machine-hour. The actual variable manufacturing overhead cost for the month was $83,787. The variable overhead efficiency variance is:

Accepted Answer

The variable overhead efficiency variance is calculated as (Actual machine-hours - Standard machine-hours) x Standard rate. Standard machine-hours = 4,400 poles x 7.0 hours = 30,800 hours. Variance = (31,140 - 30,800) x $2.50 = $850 U.

Question 13

The standards for direct materials in making a certain product are 20 pounds at $0.75 per pound. During the past period, 56,000 units of product were made and the materials quantity variance was $30,000 U. The number of pounds of direct material used during the period amounted to:

Accepted Answer

The materials quantity variance is calculated as (Actual Quantity - Standard Quantity) x Standard Price. Given the variance is $30,000 U (unfavorable), we can set up the equation: (Actual Quantity - 56,000 units x 20 pounds) x $0.75 = $30,000. Solving for Actual Quantity gives 1,160,000 pounds.

Question 14

Dreary Credit Agency uses a standard cost system for the processing of its credit applications. The labor standard at Dreary is 10 applications per 8 hour day at a standard cost of $15 per hour. During the last pay period, Dreary's credit agents worked 1,920 hours and processed 2,500 applications. The total labor cost for the agents during this period was $29,184. What was Dreary's labor efficiency variance for this last pay period?

Accepted Answer

The labor efficiency variance is calculated as (Actual hours - Standard hours) x Standard rate. Standard hours for 2,500 applications is (2,500/10) x 8 = 2,000 hours. The variance is (1,920 - 2,000) x $15 = $1,200 Favorable.

Question 15

The following materials standards have been established for a particular product:  The following data pertain to operations concerning the product for the last month:  What is the materials price variance for the month?

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Question 16

A quantity of a particular raw material was purchased for $43,250. The standard cost of the material was $2.00 per kilogram and there was an unfavorable materials price variance of $3,250. How many kilograms were purchased?

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Question 17

The standard cost card for a product indicates that one unit of the product requires 8 kilograms of a raw material at $0.80 per kilogram. The production of the product in April was 870 units, but production had been budgeted for 850 units. During April, 8,200 kilograms of the raw material were purchased for $6,888 and 7,150 kilograms of the raw material were used in production. The material variances for April were:

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Question 18

The standard cost card of a particular product specifies that it requires 4.5 direct labor-hours at $12.80 per direct labor-hour. During March, 2,300 units of the product were produced and direct labor wages of $128,300 were incurred. A total of 11,700 direct labor-hours were worked. The direct labor variances for the month were:

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Question 19

The Fischer Corporation uses a standard costing system. The following data have been assembled for December:  The standard hours allowed for December's production is:

Accepted Answer

The standard hours allowed can be calculated as follows:
Standard hours per unit = 3 hours
Actual units produced = 1,800
Therefore, standard hours allowed = 3 × 1,800 = 5,400
However, there was an unfavorable efficiency variance, which means that the actual hours worked were more than the standard hours allowed. The calculation is as follows:
Actual hours worked = 5,600 + (500 × $16) = 5,600 + $8,000 = 6,100
Therefore, the standard hours allowed for December's production is 5,600 hours.

Question 20

The Hanson Corporation employs a standard costing system. The following data are available for February:  The actual direct labor rate for February is:

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Quiz 3: Standard Costs and Variances

The standard cost card for one unit of a certain finished product shows the following: If the total standard variable cost for one unit of finished product is $85, then the standard price per pound for direct materials is:

Blue Corporation's standards call for 2,500 direct labor-hours to produce 1,000 units of product. During May 900 units were produced and the company worked 2,400 direct labor-hours. The standard hours allowed for May production would be:

The following labor standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: What is the labor efficiency variance for the month?

The following materials standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: What is the materials quantity variance for the month?

The following labor standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: What is the labor rate variance for the month?

The following standards for variable manufacturing overhead have been established for a company that makes only one product: The following data pertain to operations for the last month: What is the variable overhead efficiency variance for the month?

The standards for direct materials in making a certain product are 20 pounds at $0.75 per pound. During the past period, 56,000 units of product were made and the materials quantity variance was $30,000 U. The number of pounds of direct material used during the period amounted to:

The following materials standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: What is the materials price variance for the month?

A quantity of a particular raw material was purchased for $43,250. The standard cost of the material was $2.00 per kilogram and there was an unfavorable materials price variance of $3,250. How many kilograms were purchased?

The Fischer Corporation uses a standard costing system. The following data have been assembled for December: The standard hours allowed for December's production is:

The Hanson Corporation employs a standard costing system. The following data are available for February: The actual direct labor rate for February is: