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Exam 22: Performance Evaluation Using Variances From Standard Costs

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Question 1

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Define ideal and currently attainable standards. Which type of standard should be used and why?

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Ideal standards are standards that are o...

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It is correct to rely exclusively on past cost data when establishing standards.

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A company must choice either a standard system or nonfinancial performance measures to evaluate the performance of a company.

If the standard to produce a given amount of product is 600 direct labor hours at $15 and the actual was 600 hours at $17, the rate variance was $1,200 unfavorable.

Calculate the Total Direct Materials cost variance using the above information:

The unfavorable volume variance may be due to all of the following factors except:

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows: The amount of the total factory overhead cost variance is:

The controllable variance measures:

Robin Company purchased and used 500 pounds of direct materials to produce a product with a 520 pound standard direct materials requirement. The standard materials price is $1.90 per pound. The actual materials price was $2.00 per pound. Prepare the journal entries to record (1) the purchase of the materials and (2) the material entering production. Robin records standards and variances in the general ledger.

Hsu Company produces a part with a standard of 5 yds. of material per unit. The standard price of one yard of material is $8.50. During the month, 8,800 parts were manufactured, using 45,700 yards of material at a cost of $8.30. Required: Determine the (a) price variance, (b) quantity variance, and (c) cost variance.

The following data relate to direct labor costs for February: What is the direct labor rate variance?

An unfavorable volume variance may be due to a failure of supervisors to maintain an even flow of work.

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

Incurring actual indirect factory wages in excess of budgeted amounts for actual production results in a:

The total manufacturing cost variance is

Standards are more widely used for nonmanufacturing expenses than for manufacturing costs.

Greyson Company produced 8,300 units of their product that required 4.25 standard hours per unit. Determine the standard fixed overhead cost per unit at 27,000 hours, which is 100% of normal capacity, if the favorable fixed factory overhead volume variance is $14,895.

A company should only use nonfinancial performance measures when financial measures cannot be calculated.

Calculate the Direct Labor Time Variance using the above information

The Trumpet Company produced 8,700 units of a product that required 3.25 standard hours per unit. The standard fixed overhead cost per unit is $1.20 per hour at 29,000 hours, which is 100% of normal capacity. Determine the fixed factory overhead volume variance.