Chapter 22(7): Performance Evaluation Using Variances from Standard Costs
61.
Standard costs are divided into 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
62.
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
63.
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
64.
Myers Corporation has the following data related to direct materials costs for November: actual costs for 5,000
pounds of material, $4.50; 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
65.
The total manufacturing cost variance is
a.
the difference between actual costs and standard costs for 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 the answers are correct
66.
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.
What is the direct labor time variance?
a.
$9,300 favorable
b.
$9,300 unfavorable
c.
$9,450 favorable
d.
$9,450 unfavorable
67.
Myers Corporation has the following data related to direct materials costs for November: actual costs for 5,000
pounds of material at $4.50; 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
68.
The following data relate to direct labor costs for August:
Actual costs: 5,500 hours at $24.00 per hour. Standard
costs: 5,000 hours at $23.70 per hour.
What is the direct labor time variance?
a.
$1,650 favorable
b.
$1,650 unfavorable
c.
$1,500 favorable
d.
$1,500 unfavorable
69.
Which of the following is not a reason standard costs are separated into two components?
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
70.
The standard costs and actual costs for direct materials for the manufacture of 3,000 actual units of product are
Standard Costs
Direct materials (per completed unit)
1,040 kilograms at $8.75
Actual Costs
Direct materials
2,000 kilograms at $8.00
The amount of 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
71.
The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are
Standard Costs
Direct materials
2,500 kilograms @ $8.50
Actual Costs
Direct materials
2,600 kilograms @ $8.75
The amount of the direct materials quantity variance is
a.
$875 favorable variance
b.
$850 unfavorable variance
c.
$850 favorable variance
d.
$875 unfavorable variance
72.
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
73.
If the price paid per unit differs from the standard price per unit for direct materials, the variance is a
a.
variable variance
b.
controllable variance
c.
price variance
d.
volume variance
Chapter 22(7): Performance Evaluation Using Variances from Standard Costs
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 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
74.
The direct materials price variance is
a.
$22,800 unfavorable
b.
$22,800 favorable
c.
$52,000 unfavorable
d.
$52,000 favorable
75.
The direct materials quantity variance is
a.
22,800 favorable
b.
22,800 unfavorable
c.
52,000 favorable
d.
52,000 unfavorable
The 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.
76.
The materials price variance is
a.
$0
b.
$59,400 unfavorable
c.
$59,400 favorable
d.
$6,000 unfavorable
77.
The materials quantity variance is
a.
63,000 favorable
b.
63,000 unfavorable
c.
59,400 favorable
d.
59,400 unfavorable
78.
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
79.
If the actual direct labor hours spent producing a commodity differs from the standard hours, the variance is a
a.
time variance
b.
price variance
c.
quantity variance
d.
rate variance
80.
The following data relate to direct labor costs for the current period:
Standard costs 7,500 hours at $11.70
Actual costs 6,000 hours at $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
81.
The following data relate to direct labor costs for the current period:
Standard costs 6,000 hours at $12.00
Actual costs 7,500 hours at $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
82.
The following data relate to direct labor costs for the current period:
Standard costs 9,000 hours at $5.50
Actual costs 8,500 hours at $5.75
What is the direct labor rate variance?
a.
$2,250 unfavorable
b.
$2,125 unfavorable
c.
$2,250 favorable
d.
$2,125 favorable
83.
The following data relate to direct labor costs for the current period:
Standard costs 36,000 hours at $22.00
Actual costs 35,000 hours at $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
84.
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
c.
$2,960 favorable
d.
$4,500 unfavorable
85.
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
86.
What is the direct labor time variance?
a.
$7,700 favorable
b.
$7,700 unfavorable
c.
$11,200 unfavorable
d.
$11,200 favorable
87.
What is the direct labor rate variance?
a.
$14,000 favorable
b.
$14,000 unfavorable
c.
$15,400 favorable
d.
$15,400 unfavorable
Chapter 22(7): Performance Evaluation Using Variances from Standard Costs
The following data is given for the 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 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 calculations to the nearest cent.)
88.
The direct labor rate variance is
a.
$5,490 unfavorable
b.
$5,490 favorable
c.
$33,000 favorable
d.
$33,000 unfavorable
89.
The direct labor time variance is
a.
$6,000 favorable
b.
$6,000 unfavorable
c.
$33,000 unfavorable
d.
$33,000 favorable
The 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.
90.
The labor rate variance is
a.
$4,920 unfavorable
b.
$4,920 favorable
c.
$4,560 favorable
d.
$4,560 unfavorable
91.
The labor time variance is
a.
$9,880 favorable
b.
$9,880 unfavorable
c.
$7,800 unfavorable
d.
$7,800 favorable
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
92.
Calculate 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
93.
Calculate the direct materials price variance.
a.
$1,795.50 favorable
b.
$378.00 favorable
c.
$4,512.50 unfavorable
d.
$378.00 unfavorable
94.
Calculate 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
Chapter 22(7): Performance Evaluation Using Variances from Standard Costs
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
95.
Calculate the total direct labor variance.
a.
$2,051.25 favorable
b.
$2,051.25 unfavorable
c.
$2,362.50 unfavorable
d.
$2,362.50 favorable
96.
Calculate 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
97.
Calculate 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
98.
Which of the following is not a reason for a direct materials quantity variance?
a.
malfunctioning equipment
b.
purchasing of inferior raw materials
c.
increased material cost per unit
d.
spoilage of materials
99.
The formula to compute the direct labor rate variance is to calculate the difference between
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)
100.
The formula to the compute direct labor time variance is to calculate the difference between
a.
Actual costs – Standard costs
b.
Actual costs + Standard costs
c.
(Actual hours × Standard rate) – Standard costs
d.
Actual costs – (Actual hours × Standard rate)
101.
The formula to compute the direct materials price variance is to calculate the difference between
a.
Actual costs – (Actual quantity × Standard price)
b.
Actual cost + Standard costs
c.
Actual cost – Standard costs
d.
(Actual quantity × Standard price) – Standard costs
102.
The formula to compute the direct material quantity variance is to calculate the difference between
a.
Actual costs – Standard costs
b.
Standard costs – Actual costs
c.
(Actual quantity × Standard price) – Standard costs
d.
Actual costs – (Standard price × Standard costs)