23–21
60. Kyle, Inc. has collected the following data on one of its products. The direct materials
quantity variance is:
Direct materials standard (4 lbs. @ $1/lb.) $4 per finished unit
Total direct materials cost variance—unfavorable $13,750
Actual direct materials used 150,000 lbs.
Actual finished units produced 30,000 units
A. $30,000 favorable.
B. $13,750 unfavorable.
C. $16,250 favorable.
D. $30,000 unfavorable.
E. $13,750 favorable.
61. Kyle, Inc. has collected the following data on one of its products. The direct materials
price variance is:
Direct materials standard (4 lbs. @ $1/lb.) $4 per finished unit
Total direct materials cost variance—unfavorable $13,750
Actual direct materials used 150,000 lbs.
Actual finished units produced 30,000 units
A. $13,750 unfavorable.
B. $16,250 unfavorable.
C. $16,250 favorable.
D. $30,000 unfavorable.
E. $33,000 favorable.
62. Bartels Corp. produces woodcarvings. It takes 2 hours of direct labor to produce a carving.
Bartels’ standard labor cost is $12 per hour. During August, Bartels produced 10,000 carvings
and used 21,040 hours of direct labor at a total cost of $250,376. What is Bartels’ labor rate
variance for August?
A. $2,000 favorable.
B. $2,104 unfavorable.
C. $2,104 favorable.
D. $4,160 favorable.
E. $2,000 unfavorable.
23–23
63. Use the following data to find the direct labor cost variance.
Direct labor standard (4 hrs. @ $7/hr.) $28 per unit
Actual hours worked per unit 3.5 hours
Actual units produced 3,500 units
Actual rate per hour $7.50
A. $ 6,125 unfavorable.
B. $ 7,000 unfavorable.
C. $ 7,000 favorable.
D. $12,250 favorable.
E. $ 6,125 favorable.
64. The following company information is available for January. The direct materials price
variance is:
Direct materials used …………………………………… 2,500 feet @ $55 per foot
Standard costs for direct materials for January production 2,600 feet @ $53 per foot
A. $5,000 favorable.
B. $ 300 favorable.
C. $5,200 unfavorable.
D. $5,000 unfavorable.
E. $5,200 favorable.
65. The following company information is available. The direct materials quantity variance
is:
Direct materials used for production …………………. 36,000 gallons
Standard quantity for units produced ………………… 34,400 gallons
Standard cost per gallon of direct material …………… $6.00
Actual cost per gallon of direct material ……………… $6.10
A. $10,000 unfavorable.
B. $13,200 unfavorable.
C. $ 9,600 unfavorable.
D. $10,000 favorable.
E. $13,200 favorable.
66. Bradford Company budgeted 4,000 pounds of material costing $5.00 per pound to
produce 2,000 units. The company actually used 4,500 pounds that cost $5.10 per pound to
produce 2,000 units. What is the direct materials quantity variance?
A. $ 400 unfavorable.
B. $ 450 unfavorable.
C. $2,500 unfavorable.
D. $2,550 unfavorable.
E. $2,950 unfavorable.
67. Bradford Company budgeted 4,000 pounds of material costing $5.00 per pound to
produce 2,000 units. The company actually used 4,500 pounds that cost $5.10 per pound to
produce 2,000 units. What is the direct materials price variance?
A. $ 400 unfavorable.
B. $ 450 unfavorable.
C. $2,500 unfavorable.
D. $2,550 unfavorable.
E. $2,950 unfavorable.
68. A company has established 5 pounds of Material M at $2 per pound as the standard for the
material in its Product A. The company has just produced 1,000 units of this product, using
5,200 pounds of Material M that cost $9,880. The direct materials quantity variance is:
A. $400 unfavorable.
B. $120 favorable.
C. $400 favorable.
D. $520 favorable.
E. $520 unfavorable.
69. A company has established 5 pounds of Material M at $2 per pound as the standard for the
material in its Product A. The company has just produced 1,000 units of this product, using
5,200 pounds of Material M that cost $9,880.The direct materials price variance is:
A. $520 unfavorable.
B. $400 unfavorable.
C. $120 favorable.
D. $520 favorable.
E. $400 favorable.
70. A job was budgeted to require 3 hours of labor per unit at $8.00 per hour. The job
consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000.
What is the total labor cost variance?
A. $2,000 unfavorable.
B. $3,000 unfavorable.
C. $6,000 unfavorable.
D. $8,000 unfavorable.
E. $9,000 unfavorable.
71. The standard materials cost to produce 1 unit of Product M is 6 pounds of material at a
standard price of $50 per pound. In manufacturing 8,000 units, 47,000 pounds of material
were used at a cost of $51 per pound. What is the total direct materials cost variance?
A. $48,000 unfavorable.
B. $51,000 favorable.
C. $51,000 unfavorable.
D. $ 3,000 favorable.
E. $ 3,000 unfavorable.
23–28
72. The following information describes a company’s usage of direct labor in a recent period.
The direct labor efficiency variance is:
Actual hours used ………………………………. 45,000
Actual rate per hour …………………………….. $15
Standard rate per hour ………………………….. $14
Standard hours for units produced …………………. 47,000
A. $28,000 unfavorable.
B. $28,000 favorable.
C. $45,000 unfavorable.
D. $45,000 favorable.
E. $17,000 unfavorable.
73. The following information describes a company’s usage of direct labor in a recent period.
The direct labor rate variance is:
Actual hours used ……………………. 45,000
Actual rate per hour ………………….. $15
Standard rate per hour ……………….. $14
Standard hours for units produced …… 47,000
23–29
A. $28,000 favorable.
B. $28,000 unfavorable.
C. $45,000 unfavorable.
D. $45,000 favorable.
E. $17,000 unfavorable.
74. A company uses the following standard costs to produce a single unit of output.
Direct materials 6 pounds at $0.90 per pound = $5.40
Direct labor 0.5 hour at $12.00 per hour = $6.00
Manufacturing overhead 0.5 hour at $4.80 per hour = $2.40
During the latest month, the company purchased and used 58,000 pounds of direct materials
at a price of $1.00 per pound to produce 10,000 units of output. Direct labor costs for the
month totaled $56,350 based on 4,900 direct labor hours worked. Variable manufacturing
overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was
$10,400. Based on this information, the direct materials price variance for the month was:
A. $6,000 unfavorable
B. $1,800 favorable
C. $1,000 favorable
D. $5,800 unfavorable
E. $1,800 unfavorable
23–30
75. A company uses the following standard costs to produce a single unit of output.
Direct materials 6 pounds at $0.90 per pound = $5.40
Direct labor 0.5 hour at $12.00 per hour = $6.00
Manufacturing overhead 0.5 hour at $4.80 per hour = $2.40
During the latest month, the company purchased and used 58,000 pounds of direct materials
at a price of $1.00 per pound to produce 10,000 units of output. Direct labor costs for the
month totaled $56,350 based on 4,900 direct labor hours worked. Variable manufacturing
overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was
$10,400. Based on this information, the direct materials quantity variance for the month was:
A. $1,800 favorable
B. $5,800 unfavorable
C. $5,800 favorable
D. $1,800 unfavorable
E. $1,000 favorable
76. A company uses the following standard costs to produce a single unit of output.
Direct materials 6 pounds at $0.90 per pound = $5.40
Direct labor 0.5 hour at $12.00 per hour = $6.00
Manufacturing overhead 0.5 hour at $4.80 per hour = $2.40
23–31
During the latest month, the company purchased and used 58,000 pounds of direct materials
at a price of $1.00 per pound to produce 10,000 units of output. Direct labor costs for the
month totaled $56,350 based on 4,900 direct labor hours worked. Variable manufacturing
overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was
$10,400. Based on this information, the direct labor rate variance for the month was:
A. $1,200 favorable
B. $3,650 favorable
C. $2,450 favorable
D. $3,650 unfavorable
E. $1,200 unfavorable
77. A company uses the following standard costs to produce a single unit of output.
Direct materials 6 pounds at $0.90 per pound = $5.40
Direct labor 0.5 hour at $12.00 per hour = $6.00
Manufacturing overhead 0.5 hour at $4.80 per hour = $2.40
During the latest month, the company purchased and used 58,000 pounds of direct materials
at a price of $1.00 per pound to produce 10,000 units of output. Direct labor costs for the
month totaled $56,350 based on 4,900 direct labor hours worked. Variable manufacturing
overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was
$10,400. Based on this information, the direct labor efficiency variance for the month was:
A. $3,650 favorable
B. $2,450 favorable
C. $1,200 unfavorable
D. $1,200 favorable
E. $2,450 unfavorable
78. Overhead cost variance is:
A. The difference between the overhead costs actually incurred and the overhead budgeted at
the actual operating level.
B. The difference between the actual overhead incurred during a period and the standard
overhead applied.
C. The difference between actual and budgeted cost caused by the difference between the
actual price per unit and the budgeted price per unit.
D. The costs that should be incurred under normal conditions to produce a specific product (or
component) or to perform a specific service.
E. The difference between the total overhead cost that would have been expected if the actual
operating volume had been accurately predicted and the amount of overhead cost that was
allocated to products using the standard overhead rate.
79. The sum of the variable overhead spending variance, the variable overhead efficiency
variance, and the fixed overhead spending variance is the:
A. Production variance.
B. Quantity variance.
C. Volume variance.
D. Price variance.
E. Controllable variance.
80. The difference between the total budgeted fixed overhead cost and the fixed overhead
applied to production using the predetermined overhead rate is the:
A. Production variance.
B. Volume variance.
C. Overhead cost variance.
D. Quantity variance.
E. Controllable variance.
81. A company’s flexible budget for 48,000 units of production showed variable overhead
costs of $72,000 and fixed overhead costs of $64,000. The company incurred overhead costs
of $122,800 while operating at a volume of 40,000 units. The total controllable cost variance
is:
A. $ 1,200 favorable.
B. $ 1,200 unfavorable.
C. $13,200 favorable.
D. $13,200 unfavorable.
E. $15,200 favorable.
82. Adams Co. uses the following standard to produce a single unit of its product: variable
overhead (2 hrs. @ $3/hr.) $6. Actual data for the month show variable overhead costs of
$150,000, and 24,000 units produced. The total variable overhead variance is:
A. $6,000F.
B. $6,000U.
C. $78,000U.
D. $78,000F.
E. $0.
83. Montaigne Corp. has the following information about its standards and production activity
for November. The volume variance is:
Actual total factory overhead incurred……………………. $28,175
Standard factory overhead:
Variable overhead ……………………………………… $3.10 per unit produced
Fixed overhead
($12,000/6,000 estimated units to be produced) $2 per unit
Actual units produced ………………………………….…. 4,800 units
A. $1,295U.
B. $1,295F.
C. $2,400U.
D. $2,400F.
E. $3,695U.
84. Montaigne Corp. has the following information about its standards and production activity
for November. The controllable variance is:
Actual total factory overhead incurred …………………… $28,175
Standard factory overhead:
Variable overhead ………………………………………. $3.10 per unit produced
Fixed overhead
($12,000/6,000 estimated units to be produced) $2 per unit
Actual units produced ……………………………….……. 4,800 units
A. $1,295U.
B. $1,295F.
C. $2,400U.
D. $2,400F.
E. $3,695U.
85. Regarding overhead costs, as volume increases:
A. Unit fixed cost increases, unit variable cost decreases.
B. Unit fixed cost decreases, unit variable cost increases.
C. Unit variable cost decreases, unit fixed cost remains constant.
D. Unit fixed cost decreases, unit variable cost remains constant.
E. Both unit fixed cost and unit variable cost remain constant.
86. Price Company’s flexible budget shows $10,710 of overhead at 75% of capacity, which
was the operating level achieved during May. However, the company applied overhead to
production during May at a rate of $2.00 per direct labor hour based on a budgeted operating
level of 6,120 direct labor hours (90% of capacity). If overhead actually incurred was $11,183
during May, the controllable variance for the month was:
A. $ 473 unfavorable.
B. $ 473 favorable.
C. $1,530 favorable.
D. $1,530 unfavorable.
E. $1,057 favorable.
23–37
87. Adams, Inc. uses the following standard to produce a single unit of its product: overhead
(2 hrs. @ $3/hr.) $ 6. The flexible budget for overhead is $100,000 plus $1 per direct labor
hour. Actual data for the month show overhead costs of $150,000, and 24,000 units produced.
The overhead volume variance is:
A. $10,000 favorable.
B. $12,000 favorable.
C. $ 4,000 unfavorable.
D. $16,000 unfavorable.
E. $36,000 unfavorable.
88. Quantity variances for direct cost categories (direct materials and direct labor) are based
on differences between the actual inputs used and the standard inputs allowed for the actual
output achieved. A key difference in the analysis of quantity variances for direct cost
categories and the analysis of the efficiency variance for variable overhead is:
A. An efficiency variance for variable overhead cannot be calculated.
B. The flexible-budget variance for variable overhead is always equal to the efficiency
variance for variable overhead.
C. The efficiency variance for variable overhead is based on the cost effectiveness in using
the cost-allocation base.
D. The flexible-budget variance for variable overhead is always equal to the spending
variance for variable overhead.
E. There is no key difference between the analysis of quantity variances for direct cost
categories and the analysis of the efficiency variance for variable overhead; they should be
evaluated in exactly the same manner.
89. The following information relating to a company’s overhead costs is available. Based on
this information, the total overhead variance is:
Budgeted fixed overhead rate per machine hour $0.50
Actual variable overhead $73,000
Budgeted variable overhead rate per machine hour $2.50
Actual fixed overhead $17,000
Budgeted hours allowed for actual output achieved 32,000
Based on this information, the total overhead variance is:
A. $7,000 favorable.
B. $6,000 favorable.
C. $1,000 unfavorable.
D. $6,000 unfavorable.
E. $1,000 favorable.
90. When recording variances in a standard cost system:
A. Only unfavorable material variances are debited.
B. Only unfavorable material variances are credited.
C. Both unfavorable material and labor variances are credited.
D. All unfavorable variances are debited.
E. All unfavorable variances are credited.
91. When standard manufacturing costs are recorded in the accounts and the cost variances
are immaterial at the end of the accounting period, the cost variances should be:
A. Carried forward to the next accounting period.
B. Allocated between cost of goods sold, finished goods, and goods in process.
C. Closed to cost of goods sold.
D. Written off as a selling expense.
E. Ignored.
92. Landlubber Company established a standard direct materials cost of 1.5 gallons at $2 per
gallon for one unit of its product. During the past month, actual production was 6,500 units.
The material quantity variance was $700 favorable and the material price variance was $470
unfavorable. The entry to charge Goods in Process Inventory for the standard material costs
during the month and to record the direct material variances in the accounts would include:
A. A debit to Goods in Process for $19,500.
B. A credit to Raw Materials for $19,270.
C. A debit to Direct Material Price Variance for $470.
D. A credit to Direct Material Quantity Variance for $700.
E. All of the choices are correct.
93. When recording the journal entry for labor, the Goods in Process Inventory account is
A. Debited for standard labor cost.
B. Debited for actual labor cost.
C. Credited for standard labor cost.
D. Credited for actual labor cost.
E. Not used.
94. For the current period, Boggs Company’s manufacturing operations yield a $5,250
unfavorable price variance on its direct materials usage. The actual price per pound is $56.50
and the standard price per pound is $55.00. How many pounds of material are used in the
current period?
A. 5,393.
B. 5,110.
C. 3,500.
D. 3,750.
E. 4,000.