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79. During the month of March, Baker’s Express purchased 10,000 pounds of flour at $1 per pound. At the end of March,
Baker’s Express found that it had a favorable materials price variance of $500. The standard cost per pound must be
a. $0.95
b. $1.00
c. $1.05
d. $1.95
Chapter 10
80. During June, Zinc Company produced 10,000 chainsaw blades. The standard quantity of material allowed per unit was
2 pounds of steel per blade at a standard cost of $5 per pound. Zinc determined that it had a favorable materials usage
variance of $1,500 for June. Calculate the actual quantity of materials used by Zinc Company in June.
a. 19,700 pounds
b. 13,305 pounds
c. 12,645 pounds
d. 17,425 pounds
81. During June, Cisco Company produced 12,000 chainsaw blades. The standard quantity of material allowed per unit
was 1.5 pounds of steel per blade at a standard cost of $8 per pound. The actual cost was $7 per pound. The actual pounds
of steel that Cisco purchased were 19,500 pounds. All materials purchased were used. Calculate Cisco’s materials usage
variance.
a. $10,500 U
b. $12,000 F
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c. $12,000 U
d. $10,500 F
82. Craydye makes all sorts of moldings. Its standard quantity of material allowed is 1 foot of wood per 1 foot of molding
at a standard price of $3.00 per foot. During August, it purchased 200,000 feet of wood at a cost of $2.00 per foot, which
produced only 199,000 feet of molding. Calculate the materials price variance and the materials usage variance.
a. $400,000 F and $1,000 U
b. $600,900 U and $2,500 F
c. $700,000 U and $4,000 F
d. $200,000 F and $3,000 U
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83. Mover Company has developed the following standards for one of its products:
Direct materials: 7.5 pounds × $8 per pound
Direct labor: 2 hours × $12 per hour
The following activity occurred during March:
Materials purchased: 5,000 pounds costing $42,500
Materials used: 3,600 pounds
Units produced: 500 units
Direct labor: 1,150 hours at $11.80/hour
The company records materials price variances at the time of purchase. The variable standard cost per unit for materials
and labor is
a. $98.
b. $84.
c. $74.
d. $38.
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84. Pericloud Company uses a standard costing system. The following information pertains to direct materials for July:
Standard price per lb. $20.00
Actual purchase price per lb. $18.00
Quantity purchased 2,000 lbs.
Quantity used 1,400 lbs.
Standard quantity allowed for actual output 1,450 lbs.
Actual output 500 units
Pericloud Company reports its material price variances at the time of purchase. What is the material usage variance for
Pericloud Company?
a. $1,900 U
b. $2,450 F
c. $7,850 U
d. $1,000 F
85. During August, 10,000 units were produced. The standard quantity of material allowed per unit was 10 pounds at a
standard cost of $3 per pound. If there was an unfavorable usage variance of $18,750 for August, the actual quantity of
materials used must be
a. 106,250 pounds.
b. 93,750 pounds.
c. 31,875 pounds.
d. 23,438 pounds.
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86. During September, 40,000 units were produced. The standard quantity of material allowed per unit was 5 pounds at a
standard cost of $2.50 per pound. If there was a favorable usage variance of $25,000 for September, the actual quantity of
materials used must have been
a. 210,000 pounds.
b. 190,000 pounds.
c. 105,000 pounds.
d. 95,000 pounds.
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87. Marigold Company has developed the following standards for one of its products.
Direct materials: 10 pounds × $12 per pound
Direct labor: 4 hours × $20 per hour
Variable overhead: 5 hours × $10 per hour
The following activity occurred during the month of October:
Materials purchased: 10,000 pounds costing $150,000
Materials used: 6,000 pounds
Units produced: 500 units
Direct labor: 2,300 hours at $23.60/hour
The company records materials price variances at the time of purchase. The direct materials price variance is:
a. $41,000 F.
b. $53,000 U.
c. $30,000 U.
d. $12,000 F.
88. All of the following are true except
a. A favorable labor efficiency variance could result from using higher quality materials that result in fewer
inspections.
b. A favorable labor rate variance could result from lower wage workers quitting.
c. A favorable materials price variance could result from purchasing identical materials from another supplier at a
lower price.
d. An unfavorable materials usage variance could result from not efficiently utilizing raw materials, thus causing
waste.
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e. An unfavorable labor efficiency variance can be caused by machine downtime, and poor quality materials.
89. Zinkyl Corporation produces high-quality leather boots. The company has a standard cost system and has set the
following standards for materials and labor:
Leather (10 strips @ $20) $200
Direct labor (10 hours @ $10) $100
Total prime cost $300
During the year, Zinkyl produced 100 boots. Actual leather purchased was 1,500 strips, at $12 per strip. There were no
beginning or ending inventories of leather. Actual direct labor was 1,000 hours at $10 per hour.
Compute the materials price variance.
a. $6,000 F
b. $7,300 U
c. $12,000 F
d. $16,800 U
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90. Bortello Corporation produces high-quality leather boots. The company has a standard cost system and has set the
following standards for materials and labor:
Leather (12 strips @ $20) $240
Direct labor (10 hours @ $12) $120
Total prime cost $360
During the year Bortello produced 125 boots. Actual leather purchased was 1,700 strips, at $16 per strip. There were no
beginning or ending inventories of leather. Actual direct labor was 1,500 hours at $15 per hour.
Calculate the labor rate variance and the labor efficiency variance, respectively.
a. $4,500 U and $3,000 U
b. $4,500 F and $3,000 F
c. $4,500 U and $3,000 F
d. $4,500 F and $3,000 U
91. Bortello Corporation produces high-quality leather boots. The company has a standard cost system and has set the
following standards for materials and labor:
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Leather (12 strips @ $20) $240
Direct labor (10 hours @ $12) $120
Total prime cost $360
During the year Bortello produced 125 boots. Actual leather purchased was 1,700 strips, at $16 per strip. There were no
beginning or ending inventories of leather. Actual direct labor was 1,500 hours at $15 per hour.
Compute the total budget variances for materials and labor, respectively.
a. $2,800 F and $7,500 F
b. $2,800 F and $7,500 U
c. $2,800 U and $7,500 U
d. $2,800 U and $7,500 F
92. Bortello Corporation produces high-quality leather boots. The company has a standard cost system and has set the
following standards for materials and labor:
Chapter 10
Leather (12 strips @ $20) $240
Direct labor (10 hours @ $12) $120
Total prime cost $360
During the year Bortello produced 125 boots. Actual leather purchased was 1,700 strips, at $16 per strip. There were no
beginning or ending inventories of leather. Actual direct labor was 1,500 hours at $15 per hour.
Compute the costs of leather and direct labor that should have been incurred for the production of 125 boots.
a. $36,000 and $36,000
b. $46,500 and $37,500
c. $37,200 and $20,000
d. $30,000 and $15,000
93. Seaside Company produces picture frames. During the year 190,000 picture frames were produced. Materials and
labor standards for producing the picture frames are as follows:
Direct materials (2 pieces of wood @ $2.25) $4.50
Direct labor (2 hours @ $10) $20.00
Seaside purchased and used 400,000 pieces of wood at $2.00 each and its actual labor hours were 360,000 hours at a wage
rate of $10.50.
What is the materials price variance?
a. $100,000 F
b. $112,500 U
c. $135,000 F
d. $170,000 U
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94. Colortrigon Company produces picture frames. During the year, 200,000 picture frames were produced. Materials
and labor standards for producing the picture frames are as follows:
Direct materials (2 pieces of wood @ $2) $4.00
Direct labor (2 hours @ $10) $20.00
Colortrigon purchased and used 300,000 pieces of wood at $2.00 each, and its actual labor hours were 350,000 hours at
a wage rate of $11.
What is the materials usage variance?
a. $112,500 F
b. $112,500 U
c. $200,000 U
d. $200,000 F
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95. Anemone Company produces picture frames. During the year, 200,000 picture frames were produced. Materials and
labor standards for producing the picture frames are as follows:
Direct materials (2 pieces of wood @ $3) $6.00
Direct labor (2 hours @ $12) $24.00
Anemone purchased and used 600,000 pieces of wood at $4.00 each, and its actual labor hours were 320,000 hours at a
wage rate of $13.
What is Anemone’s labor rate variance?
a. $450,000 F
b. $320,000 U
c. $445,000 U
d. $660,500 F
96. Blue Company produces picture frames. During the year, 250,000 picture frames were produced. Materials and labor
standards for producing the picture frames are as follows:
Direct materials (2 pieces of wood @ $3) $6.00
Direct labor (2 hours @ $14.50) $29.00
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Blue purchased and used 600,000 pieces of wood at $2.5 each, and its actual labor hours were 400,000 hours at a wage
rate of $15.00.
What is Blue’s total labor variance?
a. $1,250,000 F
b. $2,300,000 U
c. $1,430,500 F
d. $1,500,000 U
97. Which of the following is true regarding direct labor variances?
a. The labor efficiency variance measures the difference between what was paid to direct laborers and what should
have been paid.
b. The labor rate and labor efficiency variances will always add up to the total labor variance.
c. The labor rate variance measures the difference between the labor hours that were actually used and the labor
hours that should have been used.
d. The labor rate variance measures the difference between the labor hours that were originally budgeted and the
labor hours that should have been used.
e. The labor rate variance measures the difference between the labor hours that were actually used and the labor
hours that were originally budgeted.
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98. Which of the following is used to compute the labor rate variance?
a. (Fixed rate × Actual hours) – (Variable rate × Standard hours)
b. (Variable rate × Standard rate) – (Fixed rate × Actual hours)
c. (Actual rate × Standard hours) – (Standard rate × Actual hours)
d. (Actual rate × Actual hours) – (Standard rate × Actual hours)
e. None of these.
99. Which of the following expressions is used to calculate the labor efficiency variance?
a. (Efficiency hours × Actual hours) – (Variance hours × Standard rate)
b. (Variance Rate × Actual Hours) – (Overhead Rate × Actual Hours)
c. (Actual Hours × Standard Rate) – (Standard Hours × Standard Rate)
d. (Overtime Hours × Actual Rate) – (Premium Hours × Actual Rate)
e. None of these
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100. Which of the following is not true regarding the use of labor variance information?
a. The actual wage rate is almost always different from the standard rate.
b. Unexpected overtime can cause variation in the labor rate.
c. An average wage rate is chosen as the labor rate standard.
d. The production manager controls the use of labor.
e. The actual wage rate is used in determining the labor rate variance.
101. Which of the following costing methods focuses on the continuous reduction of the manufacturing costs of existing
products and processes?
a. Kaizen costing
b. Variance costing
c. Overhead costing
d. Sigma costing
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102. Which of the following is not true about Kaizen Standards?
a. Kaizen standards are the standards used for continuous improvement.
b. Kaizen standards are a currently attainable standard that reflects planned improvement.
c. Kaizen standards are constantly changing.
d. Kaizen standards are the standards used in traditional costing systems.
103. Claire Company uses a standard costing system. The following information pertains to direct labor costs for
February:
Standard direct labor rate per hour $15.00
Actual direct labor rate per hour $13.50
Labor rate variance $18,000 F
Actual output 1,000 units
Standard hours allowed for actual production 10,000 hours
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What is the total labor budget variance for Claire Company?
a. $18,000 F
b. $12,000 F
c. $18,000 U
d. $12,000 U
104. Majenta Company uses a standard costing system. The following information pertains to direct labor costs for
February:
Standard direct labor rate per hour $12.00
Actual direct labor rate per hour $10.00
Labor rate variance $15,000 F
Actual output 1,200 units
Standard hours allowed for actual production 13,000 hours
How many actual labor hours were worked during February for Majenta Company?
a. 6,300 hours
b. 9,000 hours
c. 4,200 hours
d. 7,500 hours
Chapter 10
105. Which of the following is true if the actual labor rate exceeds the standard labor rate and the actual labor hours
exceed the number of hours allowed?
a. Labor Rate Variance Favorable; Labor Efficiency Variance Favorable
b. Materials Usage Variance Favorable; Materials Efficiency Variance Unfavorable
c. Materials Usage Variance Unfavorable; Materials Efficiency Variance Favorable
d. Labor Rate Variance Unfavorable; Labor Efficiency Variance Unfavorable
106. During January, 7,000 direct labor hours were worked at a standard cost of $20 per hour. If the direct labor rate
variance for January was $17,500 favorable, the actual cost per direct labor hour must be
a. $17.50.
b. $20.00.
c. $22.50.
d. $25.00.
Chapter 10
107. During October, 10,000 direct labor hours were worked at a standard cost of $10 per hour. If the direct labor rate
variance for October was $4,000 unfavorable, the actual cost per direct labor hour must be
a. $10.40.
b. $10.00.
c. $9.60.
d. $9.20.
108. Benzyne Corporation produced 100 units of Product AA. The total standard and actual costs for materials and direct
labor for the 100 units of Product AA are as follows: