72) The following information summarizes the standard cost for producing one metal tennis
racket frame at Spaulding Industries. In addition, the variances for one month’s production are
given. Assume that all inventory accounts have zero balances at the beginning of the month.
Standard Cost Per Unit Standard Monthly Costs
Materials $ 4.00 $ 8,400
Direct Labor 2 hrs @ $2.60 5.20 10,920
Factory Overhead:
Variable 1.80 3,780
Fixed 5.00 10,500
$ 16.00 $ 33,600
Variances:
Material price $ 244.75 unfavorable
Material quantity $ 500.00 unfavorable
Labor rate $ 520.00 favorable
Labor efficiency $ 2,080.00 unfavorable
What were the actual direct labor hours worked during the month?
A) 5,000
B) 4,800
C) 4,200
D) 4,000
73) The following information summarizes the standard cost for producing one metal tennis
racket frame at Spaulding Industries. In addition, the variances for one month’s production are
given. Assume that all inventory accounts have zero balances at the beginning of the month.
Standard Cost Per Unit Standard Monthly Costs
Materials $ 4.00 $ 8,400
Direct Labor 2 hrs @ $2.60 5.20 10,920
Factory Overhead:
Variable 1.80 3,780
Fixed 5.00 10,500
$ 16.00 $ 33,600
Variances:
Material price $ 244.75 unfavorable
Material quantity $ 500.00 unfavorable
Labor rate $ 520.00 favorable
Labor efficiency $ 2,080.00 unfavorable
What was the actual quantity of materials used during the month?
A) 2,156
B) 2,100
C) 2,225
D) 1,975
74) The following information summarizes the standard cost for producing one metal tennis
racket frame at Spaulding Industries. In addition, the variances for one month’s production are
given. Assume that all inventory accounts have zero balances at the beginning of the month.
Standard Cost Per Unit Standard Monthly Costs
Materials $ 4.00 $ 8,400
Direct Labor 2 hrs @ $2.60 5.20 10,920
Factory Overhead:
Variable 1.80 3,780
Fixed 5.00 10,500
$ 16.00 $ 33,600
Variances:
Material price $ 244.75 unfavorable
Material quantity $ 500.00 unfavorable
Labor rate $ 520.00 favorable
Labor efficiency $ 2,080.00 unfavorable
What was the actual price per unit paid for the direct material during the month, assuming all
materials purchased were put into production?
A) $4.34
B) $4.22
C) $4.11
D) $4.00
75) Data on Gantry Company’s direct labor costs are given below:
Standard direct-labor hours 30,000
Actual direct-labor hours 29,000
Direct-labor efficiency variance-favorable $ 4,000
Direct-labor rate variance-favorable $ 5,800
Total direct labor payroll $ 110,200
What was Gantry’s actual direct labor rate?
A) $3.60
B) $3.80
C) $4.00
D) $5.80
76) Data on Gantry Company’s direct labor costs are given below:
Standard direct-labor hours 30,000
Actual direct-labor hours 29,000
Direct-labor efficiency variance-favorable $ 4,000
Direct-labor rate variance-favorable $ 5,800
Total direct labor payroll $ 110,200
What was Gantry’s standard direct labor rate?
A) $3.54
B) $3.80
C) $4.00
D) $5.80
77) Batson Company produces Trivets. Based on its master budget, the company should produce
1,000 Trivets each month, working 2,500 direct labor hours. During May, only 900 Trivets were
produced. The company worked 2,400 direct labor hours. The standard hours allowed for May
production would be:
A) 2,500 hours.
B) 2,400 hours.
C) 2,250 hours.
D) 1,800 hours.
78) Information on Kimble Company’s direct labor costs for the month of January is as follows:
Actual direct labor hours 34,500
Standard direct labor hours 35,000
Total direct labor payroll $ 241,500
Direct labor efficiency variance-favorable $ 3,200
What is Kimble’s direct labor rate variance?
A) $17,250
B) $20,700
C) $18,750
D) $21,000
79) Information on Kimble Company’s direct labor costs for the month of January is as follows:
Actual direct labor hours 34,500
Standard direct labor hours 35,000
Total direct labor payroll $ 241,500
Direct labor efficiency variance-favorable $ 3,200
Is the direct labor rate variance favorable or unfavorable?
A) Favorable
B) Unfavorable
80) The following data pertains to the direct materials cost for the month of October:
Standard costs 5,000 units allowed at $20 each
Actual costs 5,050 units input at $19 each
What is the direct materials efficiency variance?
A) $950 favorable
B) $950 unfavorable
C) $1,000 favorable
D) $1,000 unfavorable
81) The Fellowes Company has developed standards for direct labor. During June, 75 units were
scheduled and 100 were produced. Data related to direct labor are:
Standard hours allowed 3 hours per unit
Standard wages allowed $ 4.00 per hour
Actual direct labor 310 hours (total cost $1,209)
What is the direct labor rate variance for June?
A) $30 unfavorable.
B) $31 favorable.
C) $31 unfavorable.
D) $30 favorable.
82) When computing standard cost variances, the difference between actual and standard prices
multiplied by actual quantity yields a(n): (CMA adapted)
A) combined price and quantity variance.
B) efficiency variance.
C) price variance.
D) quantity variance.
83) Shawn Incorporated planned to produce 3,000 units of its single product, Megatron, during
November. The standard specifications for one unit of Megatron include six pounds of material
at $0.30 per pound. Actual production in November was 3,100 units of Megatron. The
accountant computed a favorable materials price variance of $380 and an unfavorable materials
quantity variance of $120. Based on these variances, one could conclude that: (CMA adapted)
A) more materials were purchased than were used.
B) more materials were used than were purchased.
C) the actual cost of materials was less than the standard cost.
D) the actual usage of materials was less than the standard allowed.
84) Miller Company planned to produce 3,000 units of its single product, Tallium, during
November. The standards for one unit of Tallium specify six pounds of materials at $0.30 per
pound. Actual production in November was 3,100 units of Tallium. There was a favorable
materials price variance of $380 and an unfavorable materials quantity variance of $120. Based
on these variances, one could conclude that: (CMA adapted)
A) more materials were purchased than were used.
B) more materials were used than were purchased.
C) the actual cost per pound for materials was less than the standard cost per pound.
D) the actual usage of materials was less than the standard allowed.
85) An unfavorable direct labor efficiency variance could be caused by: (CMA adapted)
A) an unfavorable materials quantity variance.
B) an unfavorable variable overhead rate variance.
C) a favorable materials quantity variance.
D) a favorable variable overhead rate variance.
86) Variable manufacturing overhead is applied to products on the basis of standard direct labor
hours. If the direct labor efficiency variance is unfavorable, the variable overhead efficiency
variance will be: (CMA adapted)
A) favorable.
B) unfavorable.
C) either favorable or unfavorable.
D) zero.
50
87) Given the following information in standard costing:
Standard 16,000 hours at $4.00
Actual 15,800 hours at $4.20
What is the direct labor rate variance?
A) $3,160 favorable.
B) $3,160 unfavorable.
C) $2,360 favorable.
D) $2,360 unfavorable.
88) Information for Bonanza Company’s direct labor cost for February is as follows:
Actual direct labor hours 69,000
Total direct labor payroll $ 483,000
Efficiency variance $ 6,400 F
Rate variance $ 41,400 U
What were the standard direct labor hours for February?
A) 70,000.
B) 69,000.
C) 72,000.
D) 71,400.
89) The standard unit cost is used in the calculation of which of the following variances? (CPA
adapted)
Materials Price Variance Materials Usage Variance
A. No No
B. No Yes
C. Yes No
D. Yes Yes
A) Option A
B) Option B
C) Option C
D) Option D
90) A favorable materials price variance coupled with an unfavorable materials usage variance
would most likely result from: (CMA adapted)
A) machine efficiency problems.
B) product mix production changes.
C) labor efficiency problems.
D) the purchase of lower-than-standard-quality materials.
91) Excess direct labor wages resulting from overtime premium will be disclosed in which type
of variance? (CPA adapted)
A) Yield.
B) Quantity.
C) Labor efficiency.
D) Labor rate.
92) The budget for the month of May was for 9,000 units at a direct materials cost of $15 per
unit. Direct labor was budgeted at 45 minutes per unit for a total of $81,000. Actual output for
the month was 8,500 units with $127,500 in direct materials and $77,775 in direct labor expense.
The direct labor standard of 45 minutes was obtained throughout the month. Variance analysis of
the performance for the month of May would show a(n): (CMA adapted)
A) favorable materials efficiency (quantity) variance of $7,500.
B) favorable direct labor efficiency variance of $1,275.
C) unfavorable direct labor efficiency variance of $1,275.
D) unfavorable direct labor price (rate) variance of $1,275.
93) Jackson Company uses a standard cost system. The following information pertains to direct
labor for product B for the month of October:
Standard hours allowed for actual production 2,000
Actual rate paid per hour $ 8.40
Standard rate per hour $ 8.00
Labor efficiency variance $ 1,600 U
What were the actual hours worked for the month of October?
A) 1,800.
B) 1,810.
C) 2,190.
D) 2,200.
94) The fixed factory overhead application rate is a function of a predetermined activity level. If
standard hours allowed for actual output equal this predetermined activity level for a given
period, the volume variance will be: (CPA adapted)
A) zero.
B) favorable.
C) unfavorable.
D) either favorable or unfavorable, depending on the budgeted overhead.
54
95) The following information is available for Baxter Manufacturing for April:
Actual machine hours 840
Standard machine hours allowed 900
Denominator activity (machine hours) 1,000
Actual fixed overhead costs $ 3,800
Budgeted fixed overhead costs $ 4,000
Predetermined overhead rate ($1 variable + $4 fixed) $ 5
What is the fixed overhead price (spending) variance for April?
A) $200.
B) $400.
C) $300.
D) $240.
96) The following information is available for Baxter Manufacturing for April:
Actual machine hours 840
Standard machine hours allowed 900
Denominator activity (machine hours) 1,000
Actual fixed overhead costs $ 3,800
Budgeted fixed overhead costs $ 4,000
Predetermined overhead rate ($1 variable + $4 fixed) $ 5
Is the fixed overhead price (spending) variance for April favorable or unfavorable?
A) Favorable.
B) Unfavorable.
97) The following information is available for Baxter Manufacturing for April:
55
Actual machine hours 840
Standard machine hours allowed 900
Denominator activity (machine hours) 1,000
Actual fixed overhead costs $ 3,800
Budgeted fixed overhead costs $ 4,000
Predetermined overhead rate ($1 variable + $4 fixed) $ 5
What is the production volume variance?
A) $200.
B) $400.
C) $300.
D) $240.
98) The following information is available for Baxter Manufacturing for April:
Actual machine hours 840
Standard machine hours allowed 900
Denominator activity (machine hours) 1,000
Actual fixed overhead costs $ 3,800
Budgeted fixed overhead costs $ 4,000
Predetermined overhead rate ($1 variable + $4 fixed) $ 5
Is the production volume variance for April favorable or unfavorable?
A) Favorable.
B) Unfavorable.
99) The following information is available for the Danske Company:
Denominator hours for May 15,000
Actual hours worked during May 14,000
Standard hours allowed for May 12,000
Flexible budget fixed overhead cost $ 45,000
Actual fixed overhead costs for May $ 48,000
Danske Company had total underapplied overhead of $15,000. Additional information is as
follows:
Variable Overhead:
Applied based on standard direct labor hours allowed $ 42,000
Budgeted based on standard direct labor hours 38,000
Fixed Overhead:
Applied based on standard direct labor hours allowed $ 30,000
Budgeted based on standard direct labor hours 27,000
What is the actual total overhead for the period?
A) $50,000.
B) $45,000.
C) $80,000.
D) $87,000.
100) The following information is available for the Danske Company:
Denominator hours for May 15,000
Actual hours worked during May 14,000
Standard hours allowed for May 12,000
Flexible budget fixed overhead cost $ 45,000
Actual fixed overhead costs for May $ 48,000
Danske Company had total underapplied overhead of $15,000. Additional information is as
follows:
Variable Overhead:
Applied based on standard direct labor hours allowed $ 42,000
Budgeted based on standard direct labor hours 38,000
Fixed Overhead:
Applied based on standard direct labor hours allowed $ 30,000
Budgeted based on standard direct labor hours 27,000
What is the fixed overhead price (spending) variance for May?
A) $1,000 unfavorable.
B) $3,000 unfavorable.
C) $2,000 unfavorable.
D) $2,000 favorable.
101) The following information is available for the Danske Company:
Denominator hours for May 15,000
Actual hours worked during May 14,000
Standard hours allowed for May 12,000
Flexible budget fixed overhead cost $ 45,000
Actual fixed overhead costs for May $ 48,000
Danske Company had total underapplied overhead of $15,000. Additional information is as
follows:
Variable Overhead:
Applied based on standard direct labor hours allowed $ 42,000
Budgeted based on standard direct labor hours 38,000
Fixed Overhead:
Applied based on standard direct labor hours allowed $ 30,000
Budgeted based on standard direct labor hours 27,000
What is the production volume variance for May?
A) $2,000.
B) $3,000.
C) $6,000.
D) $9,000.
102) The following information is available for the Danske Company:
Denominator hours for May 15,000
Actual hours worked during May 14,000
Standard hours allowed for May 12,000
Flexible budget fixed overhead cost $ 45,000
Actual fixed overhead costs for May $ 48,000
Danske Company had total underapplied overhead of $15,000. Additional information is as
follows:
Variable Overhead:
Applied based on standard direct labor hours allowed $ 42,000
Budgeted based on standard direct labor hours 38,000
Fixed Overhead:
Applied based on standard direct labor hours allowed $ 30,000
Budgeted based on standard direct labor hours 27,000
Is the production volume variance favorable or unfavorable?
A) Favorable.
B) Unfavorable.
103) Which one of the following variances is of least significance from a behavioral control
perspective? (CMA adapted)
A) Unfavorable materials quantity variance amounting to 20% of the quantity allowed for the
output attained.
B) Unfavorable labor efficiency variance amounting to 10% more than the budgeted hours for
the output attained.
C) Favorable materials price variance obtained by purchasing raw materials from a new vendor.
D) Fixed factory overhead volume variance resulting from management’s decision midway
through the fiscal year to reduce its budgeted output by 20%.
104) The production volume variance is computed by calculating the difference between the:
A) actual fixed overhead and applied fixed overhead.
B) actual fixed overhead and budget at actual level of activity reached.
C) actual fixed overhead and budget at denominator level of activity planned.
D) budget at actual levels of activity reached and fixed overhead applied.