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Exam 8: Flexible Budgets and Standard Costing

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Question 81

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If Blue Jay Enterprises actual overhead incurred during a period was $49,050 and the company reported an unfavorable overhead controllable variance of $1,800 and a favorable overhead volume variance of $1,350, how much standard overhead cost was assigned to the products produced during the period?

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Question 82

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Prepare the journal entry to record the direct materials purchases and the issuance of direct materials into production.

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Question 83

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Based on predicted production of 22,000 units, a company anticipates $15,000 of fixed costs and $27,500 of variable costs.The flexible budget amounts of fixed and variable costs for 16,000 units are:

Sales variances allow managers to focus on sales mix as well as sales quantities.

Differences between actual costs and standard costs are known as ___________________.These differences may be subdivided into _________________ and _________________.

Companies promoting continuous improvement strive to achieve practical standards rather than ideal standards.

Another name for a static budget is a variable budget.

A company had a $22,000 favorable direct labor efficiency variance during a time period when the standard rate per direct labor hour was $22 and the actual rate per direct labor hour was $21.If the standard direct labor hours allowed for production were 5,000, what is the amount of actual direct labor hours worked during this period?

The following company information is available for January: $\begin{array}{llcc} \text { Direct materials used } & \text { 2,500 feet @ \$ 55 per foot } \\ \text { Standard costs for direct materials for January } & \text { 2,600 feet @ \$53 per foot } \\ \text { production } \\\end{array}$ The direct material quantity variance is:

The following company information is available for January: $\begin{array}{llcc} \text { Direct materials used } & \text { 2,500 feet @ \$ 55 per foot } \\ \text { Standard costs for direct materials for January } & \text { 2,600 feet @ \$53 per foot } \\ \text { production } \\\end{array}$ The direct material price variance is:

Manatee Corp.has developed standard costs based on a predicted operating level of 352,000 units of production, which is 80% of capacity.Variable overhead is $281,600 at this level of activity, or $0.80 per unit.Fixed overhead is $440,000.The standard costs per unit are: $\begin{array}{llcc} \text {Drrect materials(0.5lbs.@\$1/lb.)}& \text {\$0.50per unit}\\ \text {Directlabor (1 hour@, \$6/hour)}& \text {\$6.00per unit}\\ \text {Overhead (1hour@\$2.05/hour)} & \text { \$ 2.05 per unit}\\\end{array}$ Manatee actually produced 330,000 units at 75% of capacity and actual costs for the period were: $\begin{array} { l l } \text { Direct materials } ( 162,0001 b 5 ) & \$ 170,100 \\\text { Direct labor (329,500hours) } & \$ 2,042,900 \\\text { Fixed overhead } & \$ 438,000 \\\text { Variable overhead } & \$ 262,000\end{array}$ Calculate the following variances and indicate whether each variance is favorable or unfavorable: (1)Direct labor efficiency variance: $__________________ (2)Direct materials price variance: $__________________ (3)Controllable overhead variance: $__________________

A company had a $22,000 favorable direct labor efficiency variance during a time period when the standard rate per direct labor hour was $22 and the actual rate per direct labor hour was $21.If the standard direct labor hours allowed for production were 5,000 what is the amount of actual direct labor cost during this period?

Standard costs are used to measure:

If actual price per unit of materials is greater than the standard price per unit of materials, the direct materials price variance is _______________________.

Identify the four steps in the budgetary control process.

Montaigne Corp. has the following information about its standards and production activity in November: $\begin{array}{llcc} \text { Actual total factory overhead incurred } &\text { \$ 28,175} \\ \text { Standard factory overhead: } & \\ \text { Variable overhead } &\text { \$ 3.10 per unit } \\&\text { produced } \\ \text { Fixed overhead } & \\ \text { ( \$ 12,000 / 6,000 estimated units to be produced) } &\text { \$2 per unit } \\ \text { Actual units produced } &\text { 4,800 units } \\\end{array}$ -The volume variance is:

A product has a sales price of $20.Based on a 15,000-unit production level, the variable costs are $12 per unit and the fixed costs are $6 per unit.Using a flexible budget for an actual production and sales level of 18,000 units, what is the budgeted operating income?

An overhead cost variance is the difference between the actual overhead incurred for the period and the standard overhead applied.

Stanton Co.produces and sells two lines of t-shirts, Deluxe and Mega.Stanton provides the following data: $\begin{array}{lrr}& \underline { \text { Budget } } & \underline { \text {Actual } } \\\text { Unit sales price-Deluxe } & \$ 15 & \$ 16 \\\text { Unit sales price-Mega } & \$ 20 & \$ 19 \\\text { Unit sales-Deluxe } & 2,400 & 2,500 \\\text { Unit sales-Mega } & 2,000 & 1,900\end{array}$ Required: Compute the sales price and the sales volume variances for each product.

The sum of the variable overhead spending variance, the variable overhead efficiency variance, and the fixed overhead spending variance is the: