Name:
Class:
Date:
Indicate whether the statement is true or false.
1. If the standard to produce a given amount of product is 600 direct labor hours at $15 and the actual is 600 hours at $17,
the rate variance is $1,200 unfavorable.
a.
True
b.
False
2. If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual is 800 units
at $12, the direct materials price variance is $800 favorable.
a.
True
b.
False
3. Standard costs serve as a device for measuring efficiency.
a.
True
b.
False
4. An unfavorable cost variance occurs when standard cost at actual volumes exceeds actual cost.
a.
True
b.
False
5. If the standard to produce a given amount of product is 600 direct labor hours at $15 and the actual is 500 hours at $17,
the time variance is $1,700 unfavorable.
a.
True
b.
False
6. At the end of the fiscal year, the variances from standard are usually transferred to the finished goods account.
a.
True
b.
False
7. Nonfinancial performance output measures are used to improve the input measures.
a.
True
b.
False
8. The direct labor time variance measures the efficiency of the direct labor force.
a.
True
b.
False
9. It is correct to rely exclusively on past cost data when establishing standards.
a.
True
b.
False
10. If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual is 800
units at $12, the direct materials quantity variance is $2,200 unfavorable.
a.
True
b.
False
Name:
Class:
Date:
11. A budget performance report compares actual results with the budgeted amounts and reports differences for possible
investigation.
a.
True
b.
False
12. Ideal standards are developed under conditions that assume no idle time, no machine breakdowns, and no materials
spoilage.
a.
True
b.
False
13. A company must choose either a standard system or nonfinancial performance measures to evaluate the performance
of a company.
a.
True
b.
False
14. The variance from standard for factory overhead resulting from incurring a total amount of factory overhead cost that
is greater or less than the amount budgeted for the level of operations achieved is termed controllable variance.
a.
True
b.
False
15. An unfavorable fixed factory overhead volume variance may be due to a failure of supervisors to maintain an even
flow of work.
a.
True
b.
False
16. Favorable fixed factory overhead volume variances are never harmful, since achieving them encourages managers to
run the factory above normal capacity.
a.
True
b.
False
17. Standards are performance goals used to evaluate and control operations.
a.
True
b.
False
18. Normal standards allow for normal production difficulties and mistakes.
a.
True
b.
False
19. Standard costs should always be revised when they differ from actual costs.
a.
True
b.
False
20. If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual is 800
units at $12, the direct materials quantity variance is $1,000 unfavorable.
a.
True
b.
False
Name:
Class:
Date:
21. Normally, standard costs should be revised when labor rates change to incorporate new union contracts.
a.
True
b.
False
22. Since the controllable variance measures the efficiency of using variable overhead resources, if budgeted variable
overhead exceeds actual results, the variance is favorable.
a.
True
b.
False
23. The most effective means of presenting standard factory overhead cost variance data is through a factory overhead
cost variance report.
a.
True
b.
False
24. Because accountants have financial expertise, they are the only ones that are able to set standard costs for the
production area.
a.
True
b.
False
25. The difference between the standard cost of a product and its actual cost is called a variance.
a.
True
b.
False
26. In most businesses, cost standards are established principally by accountants.
a.
True
b.
False
27. A favorable cost variance occurs when actual cost is less than standard cost at actual volumes.
a.
True
b.
False
28. If the standard to produce a given amount of product is 600 direct labor hours at $17 and the actual is 500 hours at
$15, the time variance is $1,500 unfavorable.
a.
True
b.
False
29. Though favorable fixed factory overhead volume variances are usually good news, if inventory levels are too high,
additional production could be harmful.
a.
True
b.
False
30. If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual is 800
units at $12, the direct materials price variance is $800 unfavorable.
a.
True
b.
False
Name:
Class:
Date:
a.
True
b.
False
32. While setting standards, managers should never allow for spoilage or machine breakdowns in their computations.
a.
True
b.
False
33. Standards are designed to evaluate price and quantity variances separately.
a.
True
b.
False
34. Standard cost variances are usually not reported in reports to stockholders.
a.
True
b.
False
35. Standards are more widely used for nonmanufacturing activities than for manufacturing activities.
a.
True
b.
False
36. If the standard to produce a given amount of product is 500 direct labor hours at $15 and the actual is 600 hours at
$17, the rate variance is $1,200 favorable.
a.
True
b.
False
37. Standard costs are a useful management tool that can be used solely as a statistical device apart from the ledger or they
can be incorporated in the accounts.
a.
True
b.
False
38. Accounting systems that use standards for product costs are called budgeted cost systems.
a.
True
b.
False
39. Standard costs are determined by multiplying expected price by expected quantity.
a.
True
b.
False
40. Nonfinancial measures are often linked to the inputs or outputs of an activity or process.
a.
True
b.
False
41. If employees are given bonuses for exceeding normal standards, the standards may be very effective in motivating
employees.
a.
True
b.
False
Name:
Class:
Date:
42. The principle of exceptions allows managers to focus on correcting variances between standard costs and actual costs.
a.
True
b.
False
43. Financial reporting systems that are guided by the principle of exceptions concept focus attention on variances from
standard costs.
a.
True
b.
False
44. An example of a nonfinancial measure is the number of customer complaints.
a.
True
b.
False
45. The variance from standard for factory overhead resulting from operating at a level above or below 100% of normal
capacity is termed volume variance.
a.
True
b.
False
46. Changes in technology, machinery, or production methods may make past cost data irrelevant when setting standards.
a.
True
b.
False
47. If the standard to produce a given amount of product is 2,000 units of direct materials at $12 and the actual is 1,600
units at $13, the direct materials quantity variance is $5,200 favorable.
a.
True
b.
False
48. A company should only use nonfinancial performance measures when financial measures cannot be computed.
a.
True
b.
False
49. The volume variance measures the use of fixed factory overhead resources.
a.
True
b.
False
50. The standard cost is how much a product should cost to manufacture.
a.
True
b.
False
51. Standards are set for only direct labor and direct materials.
a.
True
b.
False
52. Accounting systems that use standards for product costs are called standard cost systems.
a.
True
b.
False
Name:
Class:
Date:
53. The fact that workers are unable to meet a properly determined direct labor standard is sufficient cause to change the
standard.
a.
True
b.
False
54. A variable cost system is an accounting system where standards are set for each manufacturing cost element.
a.
True
b.
False
Indicate the answer choice that best completes the statement or answers the question.
55. Favorable volume variances may be harmful when
a.
machine repairs cause work stoppages
b.
supervisors fail to maintain an even flow of work
c.
production in excess of normal capacity cannot be sold
d.
All of these choices
Use this information for Carol Company to answer the questions that follow.
The standard factory overhead rate is $7.50 per machine hour ($6.20 for variable factory overhead and $1.30 for fixed
factory overhead) based on 100% of normal capacity of 80,000 machine hours. The standard cost and the actual cost of
factory overhead for the production of 15,000 units during August were as follows:
Actual:
Variable factory overhead
$360,000
Fixed factory overhead
104,000
Standard hours allowed for units produced:
60,000 hours
56. What is the variable factory overhead controllable variance?
a.
$12,000 unfavorable
b.
$12,000 favorable
c.
$14,000 unfavorable
d.
$26,000 unfavorable
Use this information for Flapjack Corporation to answer the questions that follow.
Flapjack Corporation had 8,200 actual direct labor hours at an actual rate of $12.40 per hour. Original production had
been budgeted for 1,100 units, but only 1,000 units were actually produced. Labor standards were 7.6 hours per completed
unit at a standard rate of $13.00 per hour.
57. The direct labor time variance is
a.
$9,880 favorable
b.
$9,880 unfavorable
c.
$7,800 unfavorable
d.
$7,800 favorable
58. Which of the following is not a reason standard costs are separated into two components?
Name:
Class:
Date:
a.
The price and quantity variances need to be identified separately to correct the actual major differences.
b.
Identifying variances determines which manager must find a solution to major discrepancies.
c.
If a negative variance is overshadowed by a favorable variance, managers may overlook potential corrections.
d.
Variances bring attention to discrepancies in the budget and require managers to revise budgets closer to actual
results.
59. The following data relate to direct labor costs for the current period:
Standard costs
7,500 hours @ $11.70
Actual costs
6,000 hours @ $12.00
What is the direct labor time variance?
a.
$18,000 favorable
b.
$18,000 unfavorable
c.
$17,550 unfavorable
d.
$17,550 favorable
Use this information for Alex Company to answer the questions that follow.
The following data relate to the direct labor costs of Alex Company for February:
Actual costs
7,700 hours @ $14.00
Standard costs
7,000 hours @ $16.00
60. What is the direct labor time variance?
a.
$7,700 favorable
b.
$7,700 unfavorable
c.
$11,200 unfavorable
d.
$11,200 favorable
Use this information for Bonny Company to answer the questions that follow.
The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as
follows:
Standard Costs
Fixed overhead (based on 10,000 hours)
3 hours per unit @ $0.80 per hour
Variable overhead
3 hours per unit @ $2.00 per hour
Actual Costs
Total variable overhead cost, $18,000
Total fixed overhead cost, $8,000
61. The variable factory overhead controllable variance is
a.
$2,000 unfavorable
b.
$3,000 favorable
c.
$0
d.
$3,000 unfavorable
Name:
Class:
Date:
a.
$1,701.00 favorable
Use this information for Stringer Company to answer the questions that follow.
The following data are given for Stringer Company:
Budgeted production
26,000 units
Actual production
27,500 units
Materials:
Standard price per ounce
$6.50
Standard ounces per completed unit
8
Actual ounces purchased and used in production
228,000
Actual total price paid for materials
$1,504,800
Labor:
Standard hourly labor rate
$22 per hour
Standard hours allowed per completed unit
6.6
Actual labor hours worked
183,000
Actual total labor costs
$4,020,000
Overhead:
Actual and budgeted fixed overhead
$1,029,600
Standard variable overhead rate
$24.50 per standard labor hour
Actual variable overhead costs
$4,520,000
Overhead is applied on standard labor hours.
62. The direct materials price variance is
a.
$22,800 unfavorable
b.
$22,800 favorable
c.
$52,000 unfavorable
d.
$52,000 favorable
63. Periodic comparisons between planned objectives and actual performance are reported in
a.
zero-base reports
b.
budget performance reports
c.
master budgets
d.
budgets
Use this information for Yawee Company to answer the questions that follow.
Standard
Actual
Variable overhead rate
$3.35
Fixed overhead rate
$1.80
Hours
18,900
17,955*
Fixed overhead
$46,000
Actual variable overhead
$67,430
Total factory overhead
$101,450
*Actual hours are equal to standard hours for units produced.
64. The fixed factory overhead volume variance is
Name:
Class:
Date:
b.
$4,866.75 unfavorable
c.
$1,701.00 unfavorable
d.
$4,866.75 favorable
65. A favorable cost variance occurs when
a.
actual costs are more than standard costs
b.
standard costs are more than actual costs
c.
standard costs are less than actual costs
d.
actual costs are the same as standard costs
66. If the wage rate paid per hour differs from the standard wage rate per hour for direct labor, the variance is a
a.
variable variance
b.
rate variance
c.
quantity variance
d.
volume variance
67. If the actual quantity of direct materials used in producing a commodity differs from the standard quantity, the
variance is a
a.
controllable variance
b.
price variance
c.
quantity variance
d.
rate variance
68. Myers Corporation has the following data related to direct materials costs for November: actual costs for 5,000 pounds
of material at $4.50 per pound and standard costs for 4,800 pounds of material at $5.10 per pound.
What is the direct materials quantity variance?
a.
$1,020 favorable
b.
$1,020 unfavorable
c.
$900 favorable
d.
$900 unfavorable
69. The following data relate to direct labor costs for August:
Actual costs 5,500 hours @ $24.00 per hour
Standard costs 5,000 hours @ $23.70 per hour
What is the direct labor rate variance?
a.
$1,650 favorable
b.
$1,650 unfavorable
c.
$1,500 favorable
d.
$1,500 unfavorable
70. Jaxson Corporation has the following data related to direct labor costs for September: actual costs are 10,200 hours at
$15.75 per hour and standard costs are 10,800 hours at $15.50 per hour.
Name:
Class:
Date:
What is the direct labor time variance?
a.
$9,300 favorable
b.
$9,300 unfavorable
c.
$9,450 favorable
d.
$9,450 unfavorable
Use this information for Yawee Company to answer the questions that follow.
Standard
Actual
Variable overhead rate
$3.35
Fixed overhead rate
$1.80
Hours
18,900
17,955*
Fixed overhead
$46,000
Actual variable overhead
$67,430
Total factory overhead
$101,450
*Actual hours are equal to standard hours for units produced.
71. The variable factory overhead controllable variance is
a.
$8,981.75 favorable
b.
$7,280.75 unfavorable
c.
$8,981.75 unfavorable
d.
$7,280.75 favorable
Use this information for Hagedorn Company to answer the questions that follow.
The following data relate to direct labor costs for March:
Rate: standard, $12.00; actual, $12.25
Hours: standard, 18,500; actual, 17,955
Units of production: 9,450
72. Compute the direct labor rate variance.
a.
$4,488.75 unfavorable
b.
$6,851.25 favorable
c.
$4,488.75 favorable
d.
$6,851.25 unfavorable
73. Which of the following would not lend itself to applying direct labor variances?
a.
help desk assistant
b.
research and development scientist
c.
customer service personnel
d.
telemarketer
74. The following data relate to direct labor costs for the current period:
Standard costs
9,000 hours @ $5.50
Actual costs
8,500 hours @ $5.75
Name:
Class:
Date:
What is the direct labor rate variance?
a.
$2,250 unfavorable
b.
$2,125 unfavorable
c.
$2,250 favorable
d.
$2,125 favorable
75. 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 2,500 kilograms @ $8.50
Actual Costs
Direct materials 2,600 kilograms @ $8.75
The direct materials quantity variance is
a.
$875 favorable variance
b.
$850 unfavorable variance
c.
$850 favorable variance
d.
$875 unfavorable variance
76. The following data relate to direct labor costs for the current period:
Standard costs
36,000 hours @ $22.00
Actual costs
35,000 hours @ $23.00
What is the direct labor time variance?
a.
$36,000 unfavorable
b.
$35,000 unfavorable
c.
$23,000 favorable
d.
$22,000 favorable
77. If the actual direct labor hours spent producing a commodity differ from the standard hours, the variance is a
a.
time variance
b.
price variance
c.
quantity variance
d.
rate variance
78. One formula to determine the direct materials price variance is
a.
Actual Costs – (Actual Quantity × Standard Price)
b.
Actual Costs + Standard Costs
c.
Actual Costs – Standard Costs
d.
(Actual Quantity × Standard Price) – Standard Costs
Use this information for Bonny Company to answer the questions that follow.
The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as
Name:
Class:
Date:
follows:
Standard Costs
Fixed overhead (based on 10,000 hours)
3 hours per unit @ $0.80 per hour
Variable overhead
3 hours per unit @ $2.00 per hour
Actual Costs
Total variable overhead cost, $18,000
Total fixed overhead cost, $8,000
79. The fixed factory overhead volume variance is
a.
$2,000 favorable
b.
$2,000 unfavorable
c.
$2,500 unfavorable
d.
$0
80. Morocco Desk Co. purchases 6,000 feet of lumber at $6 per foot. The standard price for direct materials is $5. The
journal entry for the purchase and unfavorable direct materials price variance is
a.
Direct Materials 30,000
Direct Materials Price Variance 6,000
Accounts Payable 36,000
b.
Direct Materials 30,000
Accounts Payable 30,000
c.
Direct Materials 36,000
Direct Materials Price Variance 6,000
Accounts Payable 30,000
d.
Work in Process 36,000
Direct Materials Price Variance 6,000
Accounts Payable 30,000
Use this information for Yawee Company to answer the questions that follow.
Standard
Actual
Variable overhead rate
$3.35
Fixed overhead rate
$1.80
Hours
18,900
17,955*
Fixed overhead
$46,000
Actual variable overhead
$67,430
Total factory overhead
$101,450
*Actual hours are equal to standard hours for units produced.
81. The total factory overhead cost variance is
a.
$4,866.75 unfavorable
b.
$4,866.75 favorable
c.
$8,981.75 favorable
d.
$8,981.75 unfavorable
Name:
Class:
Date:
Use this information for Max Company to answer the questions that follow.
The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory
overhead) based on 100% of normal capacity of 30,000 direct labor hours. The standard cost and the actual cost of factory
overhead for the production of 5,000 units during May were as follows:
Standard:
25,000 hours @ $10
$250,000
Actual:
Variable factory overhead
$202,500
Fixed factory overhead
60,000
82. What is the variable factory overhead controllable variance?
a.
$10,000 favorable
b.
$2,500 unfavorable
c.
$10,000 unfavorable
d.
$2,500 favorable
Use this information for Pink Peach Company to answer the questions that follow.
The following data relate to direct materials costs for February:
Materials cost per yard: standard, $2.00; actual, $2.10
Standard yards per unit: standard, 4.5 yards; actual, 4.75 yards
Units of production: 9,500
83. Compute the total direct materials cost variance.
a.
$9,262.50 unfavorable
b.
$9,262.50 favorable
c.
$3,780.00 unfavorable
d.
$3,562.50 favorable
Use this information for Max Company to answer the questions that follow.
The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory
overhead) based on 100% of normal capacity of 30,000 direct labor hours. The standard cost and the actual cost of factory
overhead for the production of 5,000 units during May were as follows:
Standard:
25,000 hours @ $10
$250,000
Actual:
Variable factory overhead
$202,500
Fixed factory overhead
60,000
84. What is the fixed factory overhead volume variance?
a.
$12,500 favorable
b.
$10,000 unfavorable
c.
$12,500 unfavorable
d.
$10,000 favorable
Use this information for Pink Peach Company to answer the questions that follow.
Name:
Class:
Date:
The following data relate to direct materials costs for February:
Materials cost per yard: standard, $2.00; actual, $2.10
Standard yards per unit: standard, 4.5 yards; actual, 4.75 yards
Units of production: 9,500
85. Compute the direct materials price variance.
a.
$1,795.50 favorable
b.
$378.00 favorable
c.
$4,512.50 unfavorable
d.
$378.00 unfavorable
Use this information for Hagedorn Company to answer the questions that follow.
The following data relate to direct labor costs for March:
Rate: standard, $12.00; actual, $12.25
Hours: standard, 18,500; actual, 17,955
Units of production: 9,450
86. Compute the direct labor time variance.
a.
$2,362.50 favorable
b.
$2,362.50 unfavorable
c.
$6,540.00 favorable
d.
$6,540.00 unfavorable
Use this information for Lucy Corporation to answer the questions that follow.
Lucy Corporation purchased and used 129,000 board feet of lumber in production at a total cost of $1,548,000. Original
production had been budgeted for 22,000 units with a standard material quantity of 5.7 board feet per unit and a standard
price of $12 per board foot. Actual production was 23,500 units.
87. The direct materials price variance is
a.
$0
b.
$59,400 unfavorable
c.
$59,400 favorable
d.
$6,000 unfavorable
88. A company records its inventory purchases at standard cost but also records purchase price variances. The company
purchased 5,000 widgets at $8.00 each, and the standard cost for the widgets is $7.60. Which of the following would be
included in the journal entry?
a.
debit Accounts Payable, $38,000
b.
credit Direct Materials Price Variance, $2,000
c.
debit Accounts Payable, $2,000
d.
debit Direct Materials Price Variance, $2,000
Use this information for Bonny Company to answer the questions that follow.
Name:
Class:
Date:
The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as
follows:
Standard Costs
Fixed overhead (based on 10,000 hours)
3 hours per unit @ $0.80 per hour
Variable overhead
3 hours per unit @ $2.00 per hour
Actual Costs
Total variable overhead cost, $18,000
Total fixed overhead cost, $8,000
89. The total factory overhead cost variance is
a.
$2,000 favorable
b.
$5,000 unfavorable
c.
$2,500 unfavorable
d.
$5,000 favorable
90. The controllable variance measures
a.
operating results at less than normal capacity
b.
the efficiency of using variable overhead resources
c.
operating results at more than normal capacity
d.
control over fixed overhead costs
91. Standard costs are used in companies for a variety of reasons. Which of the following is not one of the benefits of
using standard costs?
a.
used to indicate where changes in technology and machinery need to be made
b.
used to estimate cost of inventory
c.
used to plan direct materials, direct labor, and variable factory overhead
d.
used to control costs
92. The total manufacturing cost variance consists of
a.
direct materials price variance, direct labor cost variance, and fixed factory overhead volume variance
b.
direct materials cost variance, direct labor rate variance, and factory overhead cost variance
c.
direct materials cost variance, direct labor cost variance, and variable factory overhead controllable variance
d.
direct materials cost variance, direct labor cost variance, and factory overhead cost variance
93. The principle of exceptions allows managers to focus on correcting variances between
a.
standard costs and actual costs
b.
variable costs and actual costs
c.
competitor’s costs and actual costs
d.
competitor’s costs and standard costs
94. Incurring actual indirect factory wages in excess of budgeted amounts for actual production results in a
a.
quantity variance
b.
controllable variance
c.
volume variance
Name:
Class:
Date:
d.
rate variance
95. One formula to determine the direct labor rate variance is
a.
Actual Costs + (Actual Hours × Standard Rate)
b.
Actual Costs – Standard Costs
c.
(Actual Hours × Standard Rate) – Standard Costs
d.
Actual Costs – (Actual Hours × Standard Rate)
96. Which of the following conditions normally would not indicate that standard costs should be revised?
a.
The Engineering Department has revised product specifications in responding to customer suggestions.
b.
The company has signed a new union contract that increases the factory wages on average by $3.50 an hour.
c.
Actual costs differed from standard costs for the preceding week.
d.
The average price of raw materials increased from $4.68 per pound to $4.82 per pound.
Use this information for Alex Company to answer the questions that follow.
The following data relate to the direct labor costs of Alex Company for February:
Actual costs
7,700 hours @ $14.00
Standard costs
7,000 hours @ $16.00
97. What is the direct labor rate variance?
a.
$14,000 favorable
b.
$14,000 unfavorable
c.
$15,400 favorable
d.
$15,400 unfavorable
98. Myers Corporation has the following data related to direct materials costs for November: actual costs for 5,000 pounds
of material at $4.50 per pound; and standard costs for 4,800 pounds of material at $5.10 per pound.
What is the direct materials price variance?
a.
$3,000 favorable
b.
$3,000 unfavorable
c.
$2,880 favorable
d.
$2,880 unfavorable
99. 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 @ $11.80
Actual Costs
Direct labor
7,400 hours @ $11.40
The direct labor rate variance is
a.
$2,960 unfavorable
b.
$4,500 favorable
Name:
Class:
Date:
c.
$2,960 favorable
d.
$4,500 unfavorable
Use this information for St. Augustine Corporation to answer the questions that follow.
St. Augustine Corporation originally budgeted for $360,000 of fixed overhead at 100% of normal production capacity.
Production was budgeted to be 12,000 units. The standard hours for production were 5 hours per unit. The variable
overhead rate was $3 per hour. Actual fixed overhead was $360,000 and actual variable overhead was $170,000. Actual
production was 11,700 units.
100. The fixed factory overhead volume variance is
a.
$9,000 favorable
b.
$9,000 unfavorable
c.
$5,500 favorable
d.
$5,500 unfavorable
Use this information for Zoyza Company to answer the questions that follow.
The following data are given for Zoyza Company:
Budgeted production (at 100% of normal capacity)
26,000 units
Actual production
27,500 units
Materials:
Standard price per ounce
$6.50
Standard ounces per completed unit
8
Actual ounces purchased and used in production
228,000
Actual price paid for materials
$1,504,800
Labor:
Standard hourly labor rate
$22 per hour
Standard hours allowed per completed unit
6.6
Actual labor hours worked
183,000
Actual total labor costs
$4,020,000
Overhead:
Actual and budgeted fixed overhead
$1,029,600
Standard variable overhead rate $24.50 per standard labor hour
Actual variable overhead costs
$4,520,000
Overhead is applied on standard labor hours.
101. The variable factory overhead controllable variance is
a.
$73,250 favorable
b.
$73,250 unfavorable
c.
$59,400 favorable
d.
$59,400 unfavorable
102. The unfavorable volume variance may be due to all of the following factors except
a.
failure to maintain an even flow of work
b.
machine breakdowns
c.
unexpected increases in the cost of utilities
Name:
Class:
Date:
d.
failure to obtain enough sales orders
103. One formula to determine the 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)
104. The standard price and quantity of direct materials are separated because
a.
GAAP and IFRS reporting requires separation
b.
direct materials prices are controlled by the Purchasing Department and quantity used is controlled by the
Production Department
c.
standard prices are more difficult to estimate than standard quantities
d.
standard quantities change more frequently than standard prices
Use this information for Flapjack Corporation to answer the questions that follow.
Flapjack Corporation had 8,200 actual direct labor hours at an actual rate of $12.40 per hour. Original production had
been budgeted for 1,100 units, but only 1,000 units were actually produced. Labor standards were 7.6 hours per completed
unit at a standard rate of $13.00 per hour.
105. The direct labor rate variance is
a.
$4,920 unfavorable
b.
$4,920 favorable
c.
$4,560 favorable
d.
$4,560 unfavorable
106. The following data relate to direct labor costs for the current period:
Standard costs
6,000 hours @ $12.00
Actual costs
7,500 hours @ $11.40
What is the direct labor rate variance?
a.
$18,000 unfavorable
b.
$4,500 favorable
c.
$17,100 unfavorable
d.
$3,600 favorable
107. At the end of the fiscal year, variances from standard costs are usually transferred to the
a.
direct labor account
b.
factory overhead account
c.
cost of goods sold account
d.
direct materials account
108. Which of the following is not a reason for a direct materials quantity variance?
a.
malfunctioning equipment
Name:
Class:
Date:
b.
purchase of inferior raw materials
c.
increased material cost per unit
d.
spoilage of materials
109. One formula to determine the direct materials 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)
Use this information for Stringer Company to answer the questions that follow.
The following data are given for Stringer Company:
Budgeted production
26,000 units
Actual production
27,500 units
Materials:
Standard price per ounce
$6.50
Standard ounces per completed unit
8
Actual ounces purchased and used in production
228,000
Actual total price paid for materials
$1,504,800
Labor:
Standard hourly labor rate
$22 per hour
Standard hours allowed per completed unit
6.6
Actual labor hours worked
183,000
Actual total labor costs
$4,020,000
Overhead:
Actual and budgeted fixed overhead
$1,029,600
Standard variable overhead rate
$24.50 per standard labor hour
Actual variable overhead costs
$4,520,000
Overhead is applied on standard labor hours.
110. The direct materials quantity variance is
a.
$22,800 favorable
b.
$22,800 unfavorable
c.
$52,000 favorable
d.
$52,000 unfavorable
111. The total manufacturing cost variance is
a.
the difference between total actual costs and total standard costs for the units produced
b.
the flexible budget variance plus the time variance
c.
the difference between planned costs and standard costs for units produced
d.
None of these choices
Use this information for Harry Company to answer the questions that follow.
The following data are given for Harry Company:
Budgeted production
26,000 units
Name:
Class:
Date:
Actual production
27,500 units
Materials:
Standard price per ounce
$6.50
Standard ounces per completed unit
8
Actual ounces purchased and used in production
228,000
Actual price paid for materials
$1,504,800
Labor:
Standard hourly labor rate
$22.00 per hour
Standard hours allowed per completed unit
6.6
Actual labor hours worked
183,000
Actual total labor costs
$4,020,000
Overhead:
Actual and budgeted fixed overhead
$1,029,600
Standard variable overhead rate
$24.50 per standard labor
hour
Actual variable overhead costs
$4,520,000
Overhead is applied on standard labor hours. (Round interim computations to the nearest cent.)
112. The direct labor time variance is
a.
$6,000 favorable
b.
$6,000 unfavorable
c.
$33,000 unfavorable
d.
$33,000 favorable
Use this information for Hagedorn Company to answer the questions that follow.
The following data relate to direct labor costs for March:
Rate: standard, $12.00; actual, $12.25
Hours: standard, 18,500; actual, 17,955
Units of production: 9,450
113. Compute the total direct labor cost variance.
a.
$2,051.25 favorable
b.
$2,051.25 unfavorable
c.
$2,362.50 unfavorable
d.
$2,362.50 favorable
114. Standards that represent levels of operation that can be attained with reasonable effort are called
a.
theoretical standards
b.
ideal standards
c.
variable standards
d.
normal standards
Use this information for Zoyza Company to answer the questions that follow.
The following data are given for Zoyza Company:
Budgeted production (at 100% of normal capacity)
26,000 units
Name:
Class:
Date:
Actual production
27,500 units
Materials:
Standard price per ounce
$6.50
Standard ounces per completed unit
8
Actual ounces purchased and used in production
228,000
Actual price paid for materials
$1,504,800
Labor:
Standard hourly labor rate
$22 per hour
Standard hours allowed per completed unit
6.6
Actual labor hours worked
183,000
Actual total labor costs
$4,020,000
Overhead:
Actual and budgeted fixed overhead
$1,029,600
Standard variable overhead rate $24.50 per standard labor hour
Actual variable overhead costs
$4,520,000
Overhead is applied on standard labor hours.
115. The fixed factory overhead volume variance is
a.
$73,250 unfavorable
b.
$73,250 favorable
c.
$59,400 favorable
d.
$59,400 unfavorable
116. Variances from standard costs are reported to
a.
suppliers
b.
stockholders
c.
management
d.
creditors
Use this information for Carol Company to answer the questions that follow.
The standard factory overhead rate is $7.50 per machine hour ($6.20 for variable factory overhead and $1.30 for fixed
factory overhead) based on 100% of normal capacity of 80,000 machine hours. The standard cost and the actual cost of
factory overhead for the production of 15,000 units during August were as follows:
Actual:
Variable factory overhead
$360,000
Fixed factory overhead
104,000
Standard hours allowed for units produced:
60,000 hours
117. What is the fixed factory overhead volume variance?
a.
$12,000 unfavorable
b.
$12,000 favorable
c.
$14,000 unfavorable
d.
$26,000 unfavorable
118. If the price paid per unit differs from the standard price per unit for direct materials, the variance is a
a.
variable variance
Name:
Class:
Date:
b.
controllable variance
c.
price variance
d.
volume variance
Use this information for Pink Peach Company to answer the questions that follow.
The following data relate to direct materials costs for February:
Materials cost per yard: standard, $2.00; actual, $2.10
Standard yards per unit: standard, 4.5 yards; actual, 4.75 yards
Units of production: 9,500
119. Compute the direct materials quantity variance.
a.
$4,512.50 unfavorable
b.
$4,512.50 favorable
c.
$4,750.00 unfavorable
d.
$4,750.00 favorable
120. The standard costs and actual costs for direct labor in the manufacture of 2,500 units of product are as follows:
Standard Costs
Direct labor
7,500 hours @ $11.80
Actual Costs
Direct labor
7,400 hours @ $11.40
The direct labor time variance is
a.
$1,180 favorable
b.
$1,140 unfavorable
c.
$1,180 unfavorable
d.
$1,140 favorable
Use this information for Lucy Corporation to answer the questions that follow.
Lucy Corporation purchased and used 129,000 board feet of lumber in production at a total cost of $1,548,000. Original
production had been budgeted for 22,000 units with a standard material quantity of 5.7 board feet per unit and a standard
price of $12 per board foot. Actual production was 23,500 units.
121. The direct materials quantity variance is
a.
$63,000 favorable
b.
$63,000 unfavorable
c.
$59,400 favorable
d.
$59,400 unfavorable
122. The standard costs and actual costs for direct materials for the manufacture of 3,000 actual units of product are as
follows:
Standard Costs
Direct materials 1,040 kilograms @ $8.75
Name:
Class:
Date:
Actual Costs
Direct materials 2,000 kilograms @ $8.00
The direct materials price variance is
a.
$2,750 unfavorable variance
b.
$2,750 favorable variance
c.
$1,500 favorable variance
d.
$1,500 unfavorable variance
123. Assuming that the standard fixed overhead rate is based on full capacity, the cost of available but unused productive
capacity is indicated by the
a.
fixed factory overhead volume variance
b.
direct labor time variance
c.
direct labor rate variance
d.
variable factory overhead controllable variance
Use this information for St. Augustine Corporation to answer the questions that follow.
St. Augustine Corporation originally budgeted for $360,000 of fixed overhead at 100% of normal production capacity.
Production was budgeted to be 12,000 units. The standard hours for production were 5 hours per unit. The variable
overhead rate was $3 per hour. Actual fixed overhead was $360,000 and actual variable overhead was $170,000. Actual
production was 11,700 units.
124. The variable factory overhead controllable variance is
a.
$9,000 favorable
b.
$9,000 unfavorable
c.
$5,500 favorable
d.
$5,500 unfavorable
Use this information for Harry Company to answer the questions that follow.
The following data are given for Harry Company:
Budgeted production
26,000 units
Actual production
27,500 units
Materials:
Standard price per ounce
$6.50
Standard ounces per completed unit
8
Actual ounces purchased and used in production
228,000
Actual price paid for materials
$1,504,800
Labor:
Standard hourly labor rate
$22.00 per hour
Standard hours allowed per completed unit
6.6
Actual labor hours worked
183,000
Actual total labor costs
$4,020,000
Overhead:
Actual and budgeted fixed overhead
$1,029,600
Standard variable overhead rate
$24.50 per standard labor
Name:
Class:
Date:
hour
Actual variable overhead costs
$4,520,000
Overhead is applied on standard labor hours. (Round interim computations to the nearest cent.)
125. The direct labor rate variance is
a.
$5,490 unfavorable
b.
$5,490 favorable
c.
$33,000 favorable
d.
$33,000 unfavorable
126. If at the end of the fiscal year, the variances from standard are significant, the variances should be transferred to the
a.
work in process account
b.
cost of goods sold account
c.
finished goods account
d.
work in process, cost of goods sold, and finished goods accounts
127. The following data are given for Bahia Company:
Budgeted production (at 100% of normal capacity)
1,000 units
Actual production
980 units
Materials:
Standard price per pound
$2.00
Standard pounds per completed unit
12
Actual pounds purchased and used in production
11,800
Actual price paid for materials
$23,000
Labor:
Standard hourly labor rate
$14 per hour
Standard hours allowed per completed unit
4.5
Actual labor hours worked
4,560
Actual total labor costs
$62,928
Overhead:
Actual and budgeted fixed overhead
$27,000
Standard variable overhead rate $3.50 per standard labor hour
Actual variable overhead costs
$15,500
Overhead is applied on standard labor hours.
The fixed factory overhead volume variance is
a.
$65 unfavorable
b.
$65 favorable
c.
$540 unfavorable
d.
$540 favorable
128. The following data are given for Bahia Company:
Budgeted production
1,000 units
Actual production
980 units
Materials:
Standard price per pound
$2.00
Name:
Class:
Date:
Standard pounds per completed unit
12
Actual pounds purchased and used in production
11,800
Actual price paid for materials
$23,000
Labor:
Standard hourly labor rate
$14 per hour
Standard hours allowed per completed unit
4.5
Actual labor hours worked
4,560
Actual total labor costs
$62,928
Overhead:
Actual and budgeted fixed overhead
$27,000
Standard variable overhead rate $3.50 per standard direct labor hour
Actual variable overhead costs
$15,500
Overhead is applied on standard labor hours.
The variable factory overhead controllable variance is
a.
$65 unfavorable
b.
$65 favorable
c.
$540 unfavorable
d.
$540 favorable
129. A negative fixed overhead volume variance can be caused due to all of the following except
a.
sales orders at a low level
b.
machine breakdowns
c.
employee inexperience
d.
increase in utility costs
130. The standards for direct materials are made up of which of the following components?
a.
variance standard and quantity standard
b.
materials standard and labor standard
c.
quality standard and quantity standard
d.
price standard and quantity standard
Match each of the following items related to a help desk to its relationship (a or b) to the help desk activities.
a.
Input
b.
Output
131. Operator training
132. Number of calls per day
133. Maintenance of computer equipment
134. Number of operators
135. Number of complaints
Name:
Class:
Date:
Match each of the following formulas or descriptions with the term (a–e) it best describes.
a.
Direct materials price variance
b.
Direct labor rate variance
c.
Direct labor time variance
d.
Direct materials quantity variance
e.
Budgeted variable factory overhead
136. (Actual Direct Hours – Standard Direct Hours) × Standard Rate per Hour
137. (Actual Rate per Hour – Standard Rate per Hour) × Actual Hours
138. (Actual Price – Standard Price) × Actual Quantity
139. (Actual Quantity – Standard Quantity) × Standard Price
140. Standard variable overhead for actual units produced
Match each of the following descriptions with the term (a–e) it best describes.
a.
Ideal standard
b.
Nonfinancial performance measure
c.
Normal standard
d.
Unfavorable cost variance
e.
Favorable cost variance
141. An example is the number of customer complaints
142. Actual Cost > Standard Cost at Actual Volumes
143. Actual Cost < Standard Cost at Actual Volumes
144. Normal standard
145. Theoretical standard
146. Standard and actual costs for direct labor for the manufacture of 300 units of product were as follows:
Actual costs
125 hours @ $54
Standard costs
131 hours @ $53
Determine the (a) direct labor time variance, (b) direct labor rate variance, and (c) total direct labor cost variance.
147. Prepare an income statement for the year ended December 31 through the gross profit for Baxter Company using the
following information. Baxter Company sold 8,600 units at $125 per unit. Normal production is 9,000 units. (Do not
round the fixed overhead rate computation when determining the fixed factory overhead volume variance.)
Standard: 5 yards per unit at $6.30 per yard
Actual yards used: 43,240 yards
at $6.25 per yard
Name:
Class:
Date:
Standard: 2.25 hours per unit at $15.00
Actual hours worked: 19,100 at
$14.90 per hour
Standard: variable overhead $1.05 per unit
Standard: fixed overhead $211,500
(budgeted and actual amount)
Actual total factory overhead:
$235,500
148. Robin Company purchased on account 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. Journalize the entries for (a) the purchase of the materials and (b) the materials entering production.
Robin Company records standards and variances in the general ledger.
149. Prepare an income statement (through income from operations) for presentation to management, using the following
data from the records of Greenway Manufacturing Company for November of the current year:
Administrative expenses
$ 73,500
Cost of goods sold (at standard)
470,000
Direct materials quantity variance—favorable
1,200
Direct materials price variance—favorable
2,400
Direct labor time variance—unfavorable
900
Direct labor rate variance—favorable
500
Factory overhead volume variance—unfavorable
10,000
Factory overhead controllable variance—favorable
1,500
Sales
950,000
Selling expenses
165,800
150. Oak Company produces a chair that requires 6 yards of material per unit. The standard price of one yard of material
is $7.50. During the month, 8,500 chairs were manufactured, using 48,875 yards. Journalize the entry for the direct
materials used in production. Oak Company records standards and variances in the general ledger.
Use this information for Taylor Company to answer the questions that follow.
The following data are given for Taylor Company:
Budgeted production
1,000 units
Actual production
980 units
Materials:
Standard price per pound
$2.00
Standard pounds per completed unit
12
Actual pounds purchased and used in production
11,800
Actual price paid for materials
$23,010
Labor:
Standard hourly labor rate
$14.00 per hour
Standard hours allowed per completed unit
4.5
Actual labor hours worked
4,560
Actual total labor costs
$62,928
Overhead:
Actual and budgeted fixed overhead
$27,000
Standard variable overhead rate
$3.50 per standard labor hour
Actual variable overhead costs
$15,500
Overhead is applied based on standard labor hours.
151. Compute the direct labor rate and direct labor time variances for Taylor Company.
Name:
Class:
Date:
152. Ruby Company produces a chair that requires a standard 5 yards of material per unit. The standard price of one yard
of material is $7.60. During the month, 8,500 chairs were manufactured, using 40,000 yards at a cost of $7.50.
Determine the (a) direct materials price variance, (b) direct materials quantity variance, and (c) total direct materials cost
variance.
153. Standard and actual costs for direct labor for the manufacture of 1,000 units of product were as follows:
Actual costs
950 hours @ $37
Standard costs
975 hours @ $36
Determine the (a) direct labor time variance, (b) direct labor rate variance, and (c) total direct labor cost variance.
154. Sally’s Chocolate Company makes gourmet cupcakes that are sold by the dozen. Compute the standard cost for one
dozen cupcakes, based on the following standards:
Standard material quantity:
4.25 cups of ingredients at $0.56 per cup
Standard labor:
1.10 hours at $8.30 per hour
Factory overhead:
$3.80 per direct labor hour
155. Greyson Company produced 8,300 units of product that required 4.25 standard hours per unit. Determine the fixed
factory overhead rate at 27,000 hours, which is 100% of normal capacity, if the favorable fixed factory overhead volume
variance is $14,895.
156. Standard and actual costs for direct materials for the manufacture of 1,000 units of product were as follows:
Actual costs
1,550 lb. @ $9.10
Standard costs
1,600 lb. @ $9.00
Determine the (a) direct materials quantity variance, (b) direct materials price variance, and (c) total direct materials cost
variance.
157. Rosser Company produces a chair that requires 4 yards of material per unit. The standard price of one yard of
material is $4.50. During the month, 9,500 chairs were manufactured using 37,300 yards of material. Journalize the entry
for the direct materials used in production. Rosser Company records standards and variances in the general ledger.
Use this information for Taylor Company to answer the questions that follow.
The following data are given for Taylor Company:
Budgeted production
1,000 units
Actual production
980 units
Materials:
Standard price per pound
$2.00
Standard pounds per completed unit
12
Actual pounds purchased and used in production
11,800
Actual price paid for materials
$23,010
Labor:
Standard hourly labor rate
$14.00 per hour
Standard hours allowed per completed unit
4.5
Actual labor hours worked
4,560
Actual total labor costs
$62,928
Name:
Class:
Date:
Overhead:
Actual and budgeted fixed overhead
$27,000
Standard variable overhead rate
$3.50 per standard labor hour
Actual variable overhead costs
$15,500
Overhead is applied based on standard labor hours.
158. Compute the direct materials price and direct materials quantity variances for Taylor Company.
159. Titus Company purchased on account and used 650 pounds of tomatoes (direct materials) to produce a taco sauce
with a 635-pound standard direct materials requirement. The standard materials price is $22.40 per pound. The actual
price of the tomatoes was $22.20 per pound. Journalize the entries for (a) the purchase of the tomatoes and (b) the
tomatoes entering production. Titus records standards and variances in the general ledger.
160. Compute the standard cost for one pair of boots, based on the following standards for each pair of boots:
Standard material quantity:
1.25 yards of leather at $35.00 per yard
Standard labor:
9 hours at $25.75 per hour
Factory overhead:
$1.75 per direct labor hour
161. Titus Company produced 8,900 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.
162. Using the following information, prepare a factory overhead cost budget for Andover Company where the total
factory overhead cost is $75,500 at normal capacity (100%). Include capacity at 75%, 90%, 100%, and 110%. Total
factory overhead variable cost is $6.25 per unit, and total factory overhead fixed costs are $38,000. The information is for
the month ended August 31. (Hint: Determine units produced at normal capacity.)
163. Robin Company purchased on account and used 520 pounds of direct materials to produce a product with a 510–
pound standard direct materials requirement. The standard materials price is $2.10 per pound. The actual materials price
was $2.00 per pound. Journalize the entries for (a) the purchase of the materials and (b) the materials entering
production. Robin Company records standards and variances in the general ledger.
164. Hsu Company produces a part with a standard of 5 yards 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.
Determine the (a) direct materials price variance, (b) direct materials quantity variance, and (c) total direct materials cost
variance.
165. A company records inventory purchases at standard cost and also records purchase price variances. Journalize the
entry for a purchase of 4,500 widgets that were bought at $7.45 per unit and have a standard cost of $7.15.
166. Tippi Company produces lamps that require 2.25 standard hours per unit at a standard hourly rate of $15.00 per hour.
Production of 7,700 units required 17,550 hours at an hourly rate of $15.20 per hour.
Determine the (a) direct labor rate variance, (b) direct labor time variance, and (c) total direct labor cost variance.
167. Using the following information, prepare a factory overhead cost budget for Jacob Company where the total factory
overhead cost is $206,500 at normal capacity (100%). Include capacity at 60%, 80%, 100%, and 120%. Total factory
overhead variable cost is $15.25 per unit, and total factory overhead fixed costs are $54,000. The information is for the
Name:
Class:
Date:
month ended October 31. (Hint: Determine units produced at normal capacity.)
168. Japan Company produces lamps that require 2.25 standard hours per unit at a standard hourly rate of $15.00 per hour.
Actual production of 7,700 units required 19,250 hours at an hourly rate of $14.90 per hour.
Determine the (a) direct labor rate variance, (b) direct labor time variance, and (c) total direct labor cost variance.
169. Define nonfinancial performance measures. What are they used for and what are some common examples?
170. The Finishing Department of Pinnacle Manufacturing Co. prepared the following factory overhead cost budget for
October of the current year, during which it expected to operate at a 100% capacity of 10,000 machine hours.
Variable costs:
Indirect factory wages
$18,000
Power and light
12,000
Indirect materials
4,000
Total variable cost
$34,000
Fixed costs:
Supervisory salaries
$12,000
Depreciation of plant and equipment
8,800
Insurance and property taxes
3,200
Total fixed cost
24,000
Total factory overhead
$58,000
During October, the plant was operated for 9,000 machine hours and the factory overhead costs incurred were as follows:
indirect factory wages, $16,400; power and light, $10,000; indirect materials, $3,000; supervisory salaries, $12,000;
depreciation of plant and equipment, $8,800; insurance and property taxes, $3,200.
Prepare a factory overhead cost variance report for October. (The budgeted amounts for actual production should be based
on 9,000 machine hours.)
171. Ruby Company produces a chair that requires a standard 5 yards of material per unit. The standard price of one yard
of material is $7.50. During the month, 8,400 chairs were manufactured, using 43,700 yards at a cost of $7.30 per yard.
Determine the (a) direct materials price variance, (b) direct materials quantity variance, and (c) total direct materials cost
variance.
172. The following information relates to manufacturing overhead for Chapman Company:
Standard:
Total fixed factory overhead $450,000
Estimated production 25,000 units (100% of normal capacity)
Overhead rates are based on machine hours.
Standard hours allowed per unit produced 2
Fixed overhead rate $9.00 per machine hour
Variable overhead rate $3.50 per hour
Actual:
Fixed factory overhead $450,000
Production 24,000 units
Variable overhead $170,000
Compute (a) the fixed factory overhead volume variance, (b) the variable factory overhead controllable variance, and (c)
Name:
Class:
Date:
the total factory overhead cost variance.
173. Tucker Company produced 8,900 units of product that required 3.25 standard hours per unit. The standard variable
overhead cost per unit is $4.00 per hour. The actual variable factory overhead was $111,000.
Determine the variable factory overhead controllable variance.
174. Aquatic Corp.’s standard material requirement and standard cost to produce one Model 2000 is 15 pounds of material
at $110 per pound. Last month, Aquatic purchased 170,000 pounds of material at a total cost of $17,850,000. It used
162,000 pounds to produce 10,000 units of Model 2000.
Determine the direct materials price variance and the direct materials quantity variance.
175. Ruby Company produces a chair that requires a standard 5 yards of material per unit. The standard price of one yard
of material is $7.50. During the month, 8,500 chairs were manufactured, using 43,600 yards at a cost of $7.55 per yard.
Determine the (a) direct materials price variance, (b) direct materials quantity variance, and (c) total direct materials cost
variance.
176. Compute the standard cost for one hat, based on the following standards for each hat:
Standard material quantity:
3/4 yard of fabric at $5.00 per yard
Standard labor:
2 hours at $5.75 per hour
Factory overhead:
$3.20 per direct labor hour
177. A company records inventory purchases at standard cost and also records purchase price variances. Journalize the
entry for a purchase of 6,000 widgets that were bought at $8.00 and have a standard cost of $8.15.
178. Define ideal and normal standards. Which type of standard should be used and why?
Name:
Class:
Date:
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