Accounting Chapter 11

If the purchasing manager purchased a greater quantity of raw materials than budgeted, but paid the Standard Price (SP), which variance may be affected?
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If the purchasing manager purchased a greater quantity of raw materials than budgeted, but paid the Standard Price (SP), which variance may be affected?
Neither of the variances may be affected
A company uses sugar in producing its product. If the price of sugar doubles, which variance is directly impacted?
Direct materials price variance
The ________ "tells managers how much of the total direct materials variance is due to using more or less materials than anticipated the by standards."
quantity variance
Which of the following examples may lead directly to a favorable fixed overhead volume variance?
Producing more units than anticipated
Easel Manufacturing budgeted fixed overhead costs of $3.75 per unit at an anticipated production level of 1150 units. In July Easel incurred actual fixed overhead costs of $4500 and actually produced 1100 units. What is Easel's fixed overhead budget variance for July?
Fixed MOH Budget Variance = Actual fixed overhead costs - Budgeted fixed overhead costs
$187.50 U = $4500 - ($3.75 × 1150)
Easel Manufacturing budgeted fixed overhead costs of $2.50 per unit at an anticipated production level of 1400 units. In July Easel incurred actual fixed overhead costs of $3700 and actually produced 1100 units. What is Easel's fixed overhead volume variance in July?
Fixed MOH Volume variance = Budgeted fixed overhead - fixed overhead allocated
$750.00 U = ($2.50 x 1400) - ($2.50 × 1100)
Trendy T's Corporation manufactures t-shirts, which is its only product. The standards for t-shirts are as follows:
Standard direct labor cost per hour $22
Standard direct labor hours per t-shirt 0.4
During the month of January, the company produced 1050 t-shirts.
Related production data for the month follows:
Actual direct labor hours 740
Actual direct labor cost incurred $14,800
What is the direct labor rate variance for the month?
Labor rate variance = (Actual rate per hour - Standard rate per hour) × actual hours
$1480 F = ({$14,800/740} - $22) × 740
Trendy T's Corporation manufactures t-shirts, which is its only product. The standards for t-shirts are as follows:
Standard direct labor cost per hour $25
Standard direct labor hours per t-shirt 0.6
During the month of January, the company produced 1000 t-shirts. Related production data for the month follows:
Actual direct labor hours 620
Actual direct labor cost incurred $8680
What is the direct labor efficiency variance for the month?
Labor efficiency variance = (Actual hours - Standard hours for actual units) × Standard rate $500 U = (620 - {1000 × 0.6}) × $25
Which of the following is an advantages of using standard costs and variances?
Standard costs are benchmarks that managers use to judge actual costs.
The ________ variance "measures how well the business keeps prices of direct labor inputs within standards.
direct labor rate