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Chapter 13
Variable cost @ $2 per hour
Total variable cost, $18,000
Fixed cost @ $0.80 per hour
Total fixed cost, $8,000
The amount of the direct materials quantity variance is:
a.
$875 favorable.
b.
$875 unfavorable.
c.
$800 favorable.
d.
$800 unfavorable.
114. Based on the following information, calculate the direct materials price variance.
Actual costs
3,590 pounds at $8.00
Standard costs
4,100 pounds at $6.00
a.
$7,700 favorable
b.
$8,200 favorable
c.
$7,180 unfavorable
d.
$8,100 unfavorable
Chapter 13
115. Based on the following information, calculate the direct materials quantity variance.
Actual quantity
2,500 pounds at $6.00
Standard quantity
2,900 pounds at $5.50
a.
$2,250 unfavorable
b.
$2,200 favorable
c.
$2,500 favorable
d.
$2,700 unfavorable
116. Based on the following information, calculate the direct labor rate variance.
Actual rate 2,500 hours at $15.00
Standard rate 2,650 hours at $15.50
a.
1,250 favorable
b.
1,000 unfavorable
c.
2,500 favorable
d.
1,300 unfavorable
Chapter 13
117. If the price paid per unit differs from the standard price per unit for direct materials, the variance is termed:
a.
variable variance.
b.
controllable variance.
c.
price variance.
d.
volume variance.
118. Efficient Corporation uses a standard cost system. The following information was provided for the period that just
ended:
Chapter 13
Actual price per gallon
$11.75
Actual gallons of material used
5,000
Actual hourly labor rate
$17.00
Actual hours of production
24,300
Standard price per gallon
$12.00
Standard gallons per completed unit
1/2
Standard hourly labor rate
$12.00
Standard time per completed unit
3 hrs.
Units completed during the period
9,000
The direct materials cost variance is:
a.
$1,125 favorable.
b.
$4,750 unfavorable.
c.
$6,000 unfavorable.
d.
$7,125 unfavorable.
119. Efficient Corporation uses a standard cost system. The following information was provided for the period that just
ended:
Actual price per gallon
$11.75
Actual gallons of material used
5,000
Actual hourly labor rate
$17.00
Actual hours of production
24,300
Standard price per gallon
$12.00
Standard gallons per completed unit
1/2
Standard hourly labor rate
$12.00
Standard time per completed unit
3 hrs.
Units completed during the period
9,000
The direct labor time variance is:
a.
$31,725 favorable.
Chapter 13
b.
$32,400 favorable.
c.
$89,100 unfavorable.
d.
$121,500 unfavorable.
120. Efficient Corporation uses a standard cost system. The following information was provided for the period that just
ended:
Actual price per gallon
$11.75
Actual gallons of material used
5,000
Actual hourly labor rate
$17.00
Actual hours of production
24,300
Standard price per gallon
$12.00
Standard gallons per completed unit
1/2
Standard hourly labor rate
$12.00
Standard time per completed unit
3 hrs.
Units completed during the period
9,000
The direct labor rate variance is:
a.
$135,000 unfavorable.
b.
$89,100 favorable.
c.
$89,100 unfavorable.
d.
$121,500 unfavorable.
Chapter 13
121. Efficient Corporation uses a standard cost system. The following information was provided for the period that just
ended:
Actual price per gallon
$11.75
Actual gallons of material used
5,000
Actual hourly labor rate
$17.00
Actual hours of production
24,300
Standard price per gallon
$12.00
Standard gallons per completed unit
1/2
Standard hourly labor rate
$12.00
Standard time per completed unit
3 hrs.
Units completed during the period
9,000
The total direct labor variance is:
a.
$216,000 favorable.
b.
$32,400 favorable.
c.
$89,100 unfavorable.
d.
$121,500 unfavorable.
Chapter 13
122. Frogue Corporation uses a standard cost system. The following information was provided for the period that just
ended:
Actual price per kilogram
$2.50
Actual kilograms of material used
31,000
Actual hourly labor rate
$18.10
Actual hours of production
4,900 labor hrs.
Standard price per kilogram
$2.80
Standard kilograms per completed unit
6 kilograms
Standard hourly labor rate
$18.00
Standard time per completed unit
1 hr.
Actual total factory overhead
$34,900
Actual fixed factory overhead
$18,000
Standard fixed factory overhead rate
$1.20 per labor hour
Standard variable factory overhead rate
$3.80 per labor hour
Maximum plant capacity
15,000 hours
Units completed during the period
5,000
The direct materials cost variance is:
a.
$6,500 unfavorable.
b.
$9,000 unfavorable.
c.
$9,000 favorable.
d.
$6,500 favorable.
123. If the wage rate paid per hour differs from the standard wage rate per hour for direct labor, the variance is termed:
a.
variable variance.
b.
rate variance.
c.
quantity variance.
d.
volume variance.
Chapter 13
124. If the actual direct labor hours spent producing a commodity differ from the standard hours, the variance is termed:
a.
time variance.
b.
price variance.
c.
quantity variance.
d.
rate variance.
125. The following data relate to direct labor costs for the current period of Executive Inc.:
Standard costs
6,000 hours at $12.00
Chapter 13
Actual costs
7,500 hours at $11.60
What is the direct labor time variance?
a.
$17,400 favorable
b.
$17,400 unfavorable
c.
$18,000 favorable
d.
$18,000 unfavorable
126. The following data relate to direct labor costs for the current period of Executive Inc.:
Standard costs
6,000 hours at $12.00
Actual costs
7,500 hours at $11.60
What is the direct labor rate variance?
a.
$3,000 unfavorable
b.
$3,000 favorable
c.
$2,400 unfavorable
d.
$2,400 favorable
Chapter 13
127. The following data relate to direct labor costs for the current period:
Standard costs
36,000 hours at $23.50
Actual costs
35,000 hours at $23.00
What is the direct labor time variance?
a.
$23,000 unfavorable
b.
$23,500 unfavorable
c.
$23,500 favorable
d.
$23,000 favorable
128. Answer Corporation uses standard cost system. The standard costs and actual costs for direct materials, direct labor,
and factory overhead for the manufacture of 2,500 units of product are as follows:
Standard Costs
Direct materials
2,500 kilograms @ $8
Direct labor
7,500 hours @ $12
Actual Costs
Direct materials
2,600 kilograms @ $8.75
Direct labor
7,400 hours @ $11.40
Factory overhead (100% capacity - 10,000 hrs.):
Chapter 13
Variable cost @ $2 per hour
Total variable cost, $18,000
Fixed cost @ $0.80 per hour
Total fixed cost, $8,000
The amount of the direct labor time variance is:
a.
$1,200 favorable.
b.
$1,140 unfavorable.
c.
$1,200 unfavorable.
d.
$1,140 favorable.
129. Answer Corporation uses standard cost system. The standard costs and actual costs for direct materials, direct labor,
and factory overhead for the manufacture of 2,500 units of product are as follows:
Standard Costs
Direct materials
2,500 kilograms @ $8
Direct labor
7,500 hours @ $12
Actual Costs
Direct materials
2,600 kilograms @ $8.75
Direct labor
7,400 hours @ $11.40
Factory overhead (100% capacity - 10,000 hrs.):
Variable cost @ $2 per hour
Total variable cost, $18,000
Fixed cost @ $0.80 per hour
Total fixed cost, $8,000
The amount of the direct labor rate variance is:
a.
$4,440 unfavorable.
b.
$4,500 favorable.
Chapter 13
c.
$4,440 favorable.
d.
$4,500 unfavorable.
130. The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are as
follows:
Standard Costs
Direct materials (per completed unit)
1.04 kilograms @$8.75
Actual Costs
Direct materials
2,500 kilograms @ $8
The amount of direct materials price variance is:
a.
$1,875 unfavorable.
b.
$1,950 favorable.
c.
$1,875 favorable.
d.
$1,950 unfavorable.
Chapter 13
131. The standard costs and actual costs for direct materials, direct labor, and factory overhead for the manufacture of
2,500 units of product are as follows:
Standard Costs
Direct labor
7,500 hours @ $12
Actual Costs
Direct labor
7,400 hours @ $11.40
The amount of the direct labor time variance is:
a.
$1,200 favorable.
b.
$1,140 unfavorable.
c.
$1,200 unfavorable.
d.
$1,140 favorable.
132. The following data relate to direct labor costs for the current period:
Standard costs
8,850 hours at $6.50
Actual costs
7,500 hours at $6.25
What is the direct labor rate variance?
a.
$1,875.00 unfavorable
Chapter 13
b.
$2,212.50 unfavorable
c.
$1,875.00 favorable
d.
$2,212.50 favorable
133. An unfavorable time variance is caused by:
a.
a shortage of skilled employees.
b.
improper scheduling of skilled employees.
c.
lack of enough sales orders.
d.
ow-quality (inferior) direct materials.
Chapter 13
134. Which of the following formula is used to calculate direct labor rate variance?
a.
Actual Costs + (Actual hours × Standard Rate)
b.
Actual costs – Standard cost
c.
(Actual hours × Standard rate) – Standard costs
d.
Actual costs – (Actual hours × Standard rate)
135. The formula to compute direct labor time variance is:
a.
actual costs – standard costs.
b.
actual costs + standard costs.
c.
(actual hours × standard rate) – standard costs.
d.
actual costs – (actual hours × standard rate).
Chapter 13
136. The formula to compute direct materials price variance is:
a.
actual costs – (actual quantity × standard price).
b.
actual cost + standard costs.
c.
actual cost – standard costs.
d.
(actual quantity × standard price) – standard costs.
137. The _____ is held responsible for an unfavorable quantity variance caused by low-quality direct materials.
a.
sales department
b.
investment department
c.
purchasing department
d.
operating department
Chapter 13
138. The standard costs and actual costs for direct labor for the manufacture of 2,500 actual units of product are as
follows:
Standard Costs
Direct labor
7,500 hours @ $12
Actual Costs
Direct labor
7,400 hours @ $11.40
The amount of the direct labor rate variance is:
a.
$4,440 unfavorable.
b.
$4,500 favorable.
c.
$4,440 favorable.
d.
$4,500 unfavorable.
139. The formula to compute direct material quantity variance is:
a.
actual costs – standard costs.
b.
standard costs – actual costs.
c.
(actual quantity × standard price) – standard costs.
d.
actual costs – (standard price × standard costs).
Chapter 13
140. If skilled, highly paid employees are used in jobs that are normally performed by unskilled, lower-paid employees, it
will result in:
a.
an unfavorable direct labor time variance.
b.
a favorable variable overhead variance.
c.
a favorable direct labor rate variance.
d.
an unfavorable direct labor rate variance.
141. Frogue Corporation uses a standard cost system. The following information was provided for the period that just
ended:
Actual price per kilogram
$3.00
Chapter 13
Actual kilograms of material used
31,000
Actual hourly labor rate
$18.20
Actual hours of production
4,900 labor hours
Standard price per kilogram
$2.80
Standard kilograms per completed unit
6 kilograms
Standard hourly labor rate
$18.00
Standard time per completed unit
1 hr.
Actual total factory overhead
$34,900
Actual fixed factory overhead
$18,000
Standard fixed factory overhead rate
$1.20 per labor hour
Standard variable factory overhead rate
$3.80 per labor hour
Maximum plant capacity
15,000 hours
Units completed during the period
5,000
The direct labor cost variance is:
a.
$1,310 favorable.
b.
$820 favorable.
c.
$1,310 unfavorable.
d.
$820 unfavorable.
142. It would be most appropriate to develop direct labor time standards for use in administrative activities when the
activity involves:
a.
repetitive task that produces common output.
b.
nonrepetitive task that produces common output.
c.
top-level management.
d.
task related to nonmeasurable output.
Chapter 13
143. Which of the following formulas is used to calculate process yield?
a.
Actual rate per hour × Actual time of a process
b.
Service units used / Available service units of a process
c.
Units entering process / Units passing inspection
d.
Units passing inspection / Units entering process
144. In computing _____, output is measured as the percentage of units from a process that pass inspection.
a.
standard units
b.
process yield
c.
process variance
d.
utilization rate
