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Exam 10: Standard Costs and Operating Performance Measures

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Question 51

True/False

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In standard costing,practical standards can be used to forecast cash flows and to plan inventory,as well as to signal abnormal deviations in costs.

A) True
B) False

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Question 52

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The Clark Company makes a single product and uses standard costing.Some data concerning this product for the month of May follow: -The standard hours allowed to make one unit of finished product are:

A) 1.0
B) 1.2
C) 1.5
D) 2.0

E) A) and D)
F) None of the above

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Question 53

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Spragg Corporation is developing standards for its products.One product requires an input that is purchased for $62.00 per kilogram from the supplier.By paying cash,the company gets a discount of 6% off this purchase price.Shipping costs from the supplier's warehouse amount to $4.45 per kilogram.Receiving costs are $0.50 per kilogram.Each unit of output requires 0.48 kilogram of this input.The allowance for waste and spoilage is 0.04 kilogram of this input for each unit of output.The allowance for rejects is 0.13 kilogram of this input for each unit of output. Required: a.Determine the standard price per kilogram of this input.Show your work! b.Determine the standard kilograms of this input per unit of output.Show your work!

In standard costing,the standard quantity allowed refers to the output that should have been achieved based on the planned inputs for the period.

The following data pertain to operations concerning the product for the last month: What is the materials price variance for the month? A.$14,850 U B.$8,250 U C.$8,640 U <underLine>D.</underLine> $2,860 F AP = $60,500 / 4,400 = $13.75 Materials price variance = AQ (AP - SP) = 4,400 ($13.75 - $14.40) = $2,860 F -The Fletcher Company uses standard costing.The following data are available for October: The standard quantity of material allowed for October production is:

The labor efficiency variance for January is:

The standards that allow for no machine breakdowns or other work interruptions and that require peak efficiency at all times are referred to as:

The following data pertain to operations concerning the product for the last month: What is the labor rate variance for the month? A.$2,955 F B.$4,935 F C.$2,955 U <underLine>D.</underLine> $1,890 U AR = $103,635 / 6,300 = $16.45 Direct labor rate variance = AH (AR - SR) = 6,300 ($16.45 - $16.15) = $1,890 U -In a recent period 12,250 units were made and there was a favorable labor efficiency variance of $22,500.If 41,000 labor-hours were worked and the standard wage rate was $12 per labor-hour,the standard hours allowed per unit of output is closest to:

The Alpha Company produces toys for national distribution.Standards for a particular toy are: Materials: 12 ounces per unit at 56'per ounce. Labor: 2 hours per unit at $2.75 per hour. During the month of December,the company produced 1,000 units.Information for the month follows: Materials: 14,000 ounces were purchased and used at a total cost of $7,140. Labor: 2,500 hours worked at a total cost of $8,000. -The labor efficiency variance is:

The labor rate variance for November was:

A favorable materials price variance coupled with an unfavorable material usage variance would MOST likely result from:

Keppler Corporation applies manufacturing overhead to products on the basis of standard machine-hours.The company's cost formula for variable overhead cost is $4.90 per machine-hour.The actual variable overhead cost for the month was $25,160.The original budget for the month was based on 5,000 machine-hours.The company actually worked 5,320 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 5,220 machine-hours.What was the variable overhead efficiency variance for the month?

The Upton Company uses a standard costing system in which variable overhead is assigned to production on the basis of standard direct labor-hours.Data for the month of February include the following: $\bullet$ Variable overhead cost incurred: $48,700 $\bullet$ Total variable overhead variance: $300 F $\bullet$ Standard hours allowed for actual production: 7,000 $\bullet$ Actual direct labor-hours worked: 6,840 -The variable overhead rate variance is:

Reenu Company manufactures wigs out of used dental floss.The variable cost standards for wig production developed by Reenu are as follows: Variable overhead at Reenu is based on direct labor-hours.The actual results for the month of October were as follows: -What is Reenu's materials quantity variance for October?

The following labor standards have been established for a particular product:

Manufacturing Cycle Efficiency (MCE) is computed as:

The total variance (both rate and efficiency) for variable overhead for January is:

The following labor standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: -What is the labor rate variance for the month?

Huger Corporation makes automotive engines.For the most recent month,budgeted production was 6,900 engines.The budgeted power cost is $5.10 per machine-hour.The company's standards indicate that each engine requires 7.5 machine-hours.Actual production was 7,000 engines.Actual machine-hours were 53,240 machine-hours.Actual power cost totaled $247,598. Required: Determine the rate and efficiency variances for the variable overhead item power cost and indicate whether those variances are unfavorable or favorable.Show your work!

The following data have been provided by Wordell Corporation: -The variable overhead rate variance for power is closest to: