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Exam 24: Flexible Budgets and Standard Costs

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Question 81

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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.

F) A) and E)
G) A) and D)

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Question 82

Multiple Choice

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Use the following data to find the direct labor cost variance.

A) $6,125 unfavorable.
B) $7,000 unfavorable.
C) $7,000 favorable.
D) $12,250 favorable.
E) $6,125 favorablE.

F) None of the above
G) A) and B)

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Question 83

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Based on predicted production of 25,000 units, Best Co. anticipates $175,000 of fixed costs and $137,500 of variable costs. What are the flexible budget amounts of total costs for 20,000 and 30,000 units?

Use the following cost information to calculate the direct labor rate and efficiency variances and indicate whether they are favorable or unfavorable.

A budget performance report that includes variances can have variances caused by both price differences and quantity differences.

A company's flexible budget for 36,000 units of production showed variable overhead costs of $54,000 and fixed overhead costs of $50,000. The company actually incurred total overhead costs of $95,300 while operating at a volume of 32,000 units. What is the controllable variance?

Montaigne Corp. has the following information about its standards and production activity for November. The volume variance is:

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:

Tiger, Inc. has developed the following standard cost data based on 60,000 direct labor hours, which is 75% of capacity. During the last period, the company operated at 80% of capacity and produced 128,000 units. Actual costs were: Determine the direct materials price and quantity variances and the direct labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable.

A company uses the following standard costs to produce a single unit of output. 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 fixed budget performance report never provides useful information for evaluating variances.

Standard material, labor, and overhead costs can be obtained from standard cost tables published by the Institute of Management Accountants.

A company's flexible budget for 10,000 units of production reflects sales of $200,000; variable costs of $40,000; and fixed costs of $75,000. Calculate the expected level of operating income if the company produces and sells 13,000 units.

Kyle, Inc. has collected the following data on one of its products. The actual cost of the direct materials used is:

Job #305 was budgeted to require 3.5 hours of labor at $11.00 per hour. However, it was completed in 3 hours by a person who worked for $14.00 per hour. What is the total labor cost variance for Job #305?

Standard costs can serve as a basis for evaluating actual performance.

In preparing flexible budgets, the costs that remain constant in total are _______________ costs. Those costs that change in total are _______________ costs.

When standard costs are used, factory overhead is assigned to products with a predetermined standard overhead rate.

Variable budget is another name for a flexible budget.

A direct labor cost variance may be broken down into a controllable variance and a volume variance.