Which
of the following is the calculation to compute the standard cost of direct
labor?
ANSWER
INCORRECT
·
THE CORRECT ANSWER
Standard Quantity of Direct
Labor × Standard Price of Direct Labor
·
YOU WERE SURE AND INCORRECT
Total estimated variable
Manufacturing Overhead / Total estimated amount of the allocation base
·
Standard Quantity of Machine
Hours × Variable Manufacturing Overhead Rate
·
Standard Quantity of Direct
Materials × Standard Price of Direct Materials
·
I DON'T KNOW YET
Pool
Manufacturing manufactures parts for one type of pool. The managerial
accountant provided the following data for March:
|
|
|
|
Pool Manufacturing
Manufacturing Report for
March
|
|
|
Number of parts produced
|
35,000 parts
|
|
Standard variable manufacturing overhead rate
|
$30 per machine hour
|
|
Standard hours required per part
|
0.20 machine hours
|
|
Actual machine hours
|
3,250 machine hours
|
|
Actual variable manufacturing overhead costs
|
$92,000
|
What
is the variable manufacturing overhead efficiency variance in March?
ANSWER
INCORRECT
·
$112,500 U
·
THE CORRECT ANSWER
$112,500 F
·
YOU WERE SURE AND INCORRECT
$11,250 F
·
$11,250 U
·
I DON'T KNOW YET
The
variable overhead rate variance ________ .
ANSWER
INCORRECT
·
is directly tied to the
efficiency with which the machine hours are used
·
is NOT known as the variable
overhead spending variance
·
YOU WERE SURE AND INCORRECT
is the difference between the
actual machine hours run and the standard machine hours allowed for the actual
volume, computed at the variable manufacturing overhead rate
·
THE CORRECT ANSWER
is the difference between the
actual variable manufacturing overhead costs incurred during the period and the
amount of variable manufacturing overhead expected, considering the number of
actual hours worked
·
I DON'T KNOW YET
The variable overhead rate
variance is the difference between the actual variable manufacturing
overhead costs incurred during the period and the amount of variable
manufacturing overhead expected, considering the number of actual
hours worked is true.
The variable overhead efficiency
variance is the difference between the actual machine hours run and the
standard machine hours allowed for the actual volume, computed at the variable
manufacturing overhead rate.
The variable overhead
efficiency variance is directly tied to the efficiency with which the machine
hours are used instead of the variable overhead rate variance.
The variable overhead rate
variance is known as the variable overhead spending variance.
Terry’s
Tree Service produces parts for saws. The managerial accountant reported the
labor data as outlined below. What is the direct labor rate variance for the
period?
|
|
|
|
Terry’s Tree Service
Labor Report
|
|
|
Actual direct labor hours used
|
38,000
|
|
Actual rate per hour
|
$15.00
|
|
Standard rate per hour
|
$15.05
|
|
Standard hours for units produced
|
34,500
|
ANSWER
INCORRECT
·
$190 U
·
THE CORRECT ANSWER
$1,900 F
·
YOU WERE SURE AND INCORRECT
$1,900 U
·
$190 F
·
I DON'T KNOW YET
The direct labor rate variance
is $1,900 F.
Direct Labor Rate Variance =
(Actual Rate per Hour – Standard Rate per Hour) × Actual Hours
($15.00 - $15.05) × 38,000 =
$0.05 × 38,000 = $1,900 F
The analysis shows the overall
dollar impact of paying an average wage rate that was lower than anticipated.
Therefore, the direct labor rate variance was favorable. The other answers are
not correct.
The
________ measures the difference between the actual fixed overhead costs
incurred and the budgeted fixed overhead costs.
ANSWER
INCORRECT
·
fixed overhead volume variance
·
standard fixed overhead cost
allocated to production
·
YOU WERE SURE AND INCORRECT
fixed overhead volume variance
·
THE CORRECT ANSWER
fixed overhead budget variance
·
I DON'T KNOW YET
The fixed overhead
budget variance measures the difference between the actual fixed
overhead costs incurred and the budgeted fixed overhead costs.
The fixed overhead volume
variance is the difference between the budgeted fixed overhead and the standard
fixed overhead cost allocated to production.
The standard fixed overhead
cost allocated to production is the standard hours allowed multiplied by the
standard rate.
The fixed overhead volume
variance is the difference between budgeted fixed overhead and standard fixed
overhead cost allocated to production.
Pool
Manufacturing provided the following manufacturing report from January. What is
Pool Manufacturing’s fixed overhead volume variance in January?
|
|
|
|
Pool Manufacturing
Manufacturing Report for
January
|
|
|
Number of parts produced
|
50,000 parts
|
|
Standard variable manufacturing overhead rate
|
$33 per machine hour
|
|
Standard hours required per part
|
0.15 machine hours
|
|
Actual machine hours
|
3,450 machine hours
|
|
Actual variable manufacturing overhead costs
|
$100,000
|
|
Budgeted fixed overhead
|
$280,000
|
ANSWER
INCORRECT
·
$19,000 U
·
$16,500 U
·
THE CORRECT ANSWER
$32,500 U
·
YOU WERE SURE AND INCORRECT
$18,500 U
·
I DON'T KNOW YET
Pilot Manufacturing’s fixed
overhead volume variance for April is $32,500 U. The other answers
are not correct.
Step 1: Compute Standard Fixed
Overhead Cost Allocated to Production
= 50,000 parts × .15 machine hours
× $33 per hour
= 7,500 machine hrs/part ×
$33/machine hr = $247,500
Step 2: Fixed Overhead Volume
Variance = Budgeted Fixed Overhead – Standard Fixed Overhead Cost Allocated to
Production
= $280,000 - $247,500 = $32,500
U
Which
of the following is the formula to compute the direct labor efficiency
variance?
ANSWER
INCORRECT
·
THE CORRECT ANSWER
Standard Rate × (Actual Hours –
Standard Hours Allowed)
·
YOU WERE SURE AND INCORRECT
Standard Price × (Actual
Quantity Used – Standard Quantity Allowed)
·
Actual Quantity Purchased ×
(Actual Price – Standard Price)
·
Actual Hours × (Actual Rate –
Standard Rate)
·
I DON'T KNOW YET
Standard Rate × (Actual Hours –
Standard Hours Allowed) is the formula to compute the direct
labor efficiency variance.
Actual Hours × (Actual Rate –
Standard Rate) is the formula to compute the direct labor rate variance.
Actual Quantity Purchased ×
(Actual Price – Standard Price) is the formula to compute the direct material
price variance.
Standard Price × (Actual
Quantity Used – Standard Quantity Allowed) is the formula to compute the direct
material quantity variance.
Which
of the following journal entries represents the recording of the sale and
release of inventory in a normal system?
ANSWER
INCORRECT
·
THE CORRECT ANSWER
A debit to Finished Goods
Inventory and a credit to Sales Revenue
·
A debit to Finished Goods
Inventory and a credit to Accounts Receivable
·
YOU WERE SURE AND INCORRECT
A credit to Finished Goods
Inventory and a debit to Fixed Manufacturing Overhead
·
A credit to Finished Goods
Inventory and a debit to Sales Revenue
·
I DON'T KNOW YET
A debit to Finished Goods
Inventory and a credit to Sales Revenue represents the recording of the sale and
release of inventory in a normal system. The other answers are not correct.
Which
of the following is the calculation to compute the predetermined variable
manufacturing overhead rate?
ANSWER
INCORRECT
·
THE CORRECT ANSWER
Total Estimated Variable
Manufacturing Overhead / Total estimated amount of the allocation base
·
Standard Quantity of Machine
Hours × Fixed Manufacturing Overhead Rate
·
YOU WERE SURE AND INCORRECT
Total Estimated Fixed
Manufacturing Overhead / Total estimated amount of the allocation base
·
Standard Quantity of Machine
Hours × Variable Manufacturing Overhead rate = Standard Variable Manufacturing
Overhead
·
I DON'T KNOW YET
Total Estimated Variable
Manufacturing Overhead / Total estimated amount of the allocation base is
the calculation to compute the Variable Manufacturing Overhead rate.
Standard Quantity of MH ×
Variable Manufacturing Overhead rate = Standard Variable Manufacturing Overhead
= Standard cost of variable manufacturing overhead
Total estimated fixed
Manufacturing Overhead / Total estimated amount of the allocation base = Fixed
Manufacturing Overhead rate
Standard Quantity of Machine
Hours × Fixed M Manufacturing Overhead rate = Standard Fixed Manufacturing
Overhead
Marshall’s
Toy Shop produces and sells small dolls for children. During the production
process, the employees use six pounds of plastic for each doll, including an
allowance for normal amounts of spoilage and waste. The manager can purchase
the plastic for $3 per pound.
What
is the standard cost of plastic per pound for each doll?
ANSWER
INCORRECT
·
THE CORRECT ANSWER
$18.00
·
$.18
·
YOU WERE SURE AND INCORRECT
$1.08
·
$1.80
·
I DON'T KNOW YET
The standard cost of plastic
per pound for each doll is $18.00 /lb. The other answers are
not correct.
6 lbs. × $3/lb = $18.00
Pilot
Manufacturing prepared a report and noted budgeted fixed overhead costs of
$3.75 per unit at 1,400 units. In November, the managerial accountant incurred
actual fixed overhead costs of $4,200 and the actual production was 1,400
units.
What
is Pilot Manufacturing’s fixed overhead budget variance for November?
ANSWER
INCORRECT
·
$1,050 U
·
THE CORRECT ANSWER
$1,050 F
·
YOU WERE SURE AND INCORRECT
$10,500 U
·
$10,500 F
·
I DON'T KNOW YET
The fixed overhead budget
variance for October is $1,050 F. The other answers are not
correct.
Fixed Manufacturing Overhead
Budget Variance =Actual Fixed Overhead Costs – Budgeted Fixed Overhead Costs
= $4,200 – ($3.75 × 1,400)
= $4,200 - $5,250 = $1,050 F
The
variance is favorable because the actual costs are lower than budgeted.
Marshall’s
Upholstery produces buttons for couches. The managerial accountant reported the
labor data as outlined below. What is the direct labor rate variance during
January?
|
|
|
|
Marshall’s Upholstery
Labor Report
|
|
|
Actual direct labor hours used
|
36,000
|
|
Actual rate per hour
|
$19.00
|
|
Standard rate per hour
|
$16.75
|
|
Standard hours for units produced
|
35,500
|
ANSWER
INCORRECT
·
$8,100 U
·
THE CORRECT ANSWER
$81,000 U
·
YOU WERE SURE AND INCORRECT
$8,100 F
·
$81,000 F
·
I DON'T KNOW YET
The direct labor rate variance
is $81,000 U.
Direct Labor Rate Variance =
(Actual Rate per Hour – Standard Rate per Hour) × Actual Hours ($19.00 -
$16.75) × 36,000 = ($2.25 × 36,000) = $81,000 U
The overall dollar impact of
paying an average wage rate that was higher than planned means that this is an
unfavorable result. The other answers are not correct.
Actual
Hours × (Actual Rate – Standard Rate) is the formula to compute ________
ANSWER
INCORRECT
·
THE CORRECT ANSWER
variable manufacturing overhead
rate variance
·
fixed overhead volume variance
·
YOU WERE SURE AND INCORRECT
fixed overhead budget variance
·
variable manufacturing overhead
efficiency variance
·
I DON'T KNOW YET
Actual Hours × (Actual Rate –
Standard Rate) is the formula to compute the variable manufacturing overhead rate
variance.
Variable Manufacturing Overhead
Efficiency Variance = Standard Rate × (Actual Hours – Standard Hours Allowed)
Fixed Overhead Budget Variance
= Actual Fixed Overhead – Budgeted Fixed Overhead
Fixed Overhead Volume Variance
= Budgeted Fixed Overhead - Standard Fixed Overhead Cost Allocated to
Production = Budgeted Fixed Overhead – (Standard Hours × Standard Rate)
Which
of the following is the calculation to compute the standard cost of direct
materials?
ANSWER
INCORRECT
·
THE CORRECT ANSWER
Standard Quantity of Direct
Materials × Standard Price of Direct Materials
·
YOU WERE SURE AND INCORRECT
Standard Quantity of Direct
Labor × Standard Price of Direct Labor
·
Total estimated variable
Manufacturing Overhead / Total estimated amount of the allocation base
·
Standard Quantity of Machine
Hours × Variable Manufacturing Overhead rate
·
I DON'T KNOW YET
Standard Quantity of Direct Materials × Standard Price of Direct
Materials is
the calculation to compute the Standard Cost of Direct Materials.
Standard
Quantity of Direct Labor × Standard Price of Direct Labor is the calculation to
compute the Standard Cost of Direct Labor.
Total
estimated variable Manufacturing Overhead / Total estimated amount of the
allocation base = Variable Manufacturing Overhead rate
Standard Quantity of Machine
Hours × Variable Manufacturing Overhead rate = Standard Variable Manufacturing
Overhead
Pilot
Manufacturing prepared a report and noted budgeted fixed overhead costs of
$3.25 per unit at 1,375 units. In October, the managerial accountant incurred
actual fixed overhead costs of $4,600 and the actual production was 1,500
units.
What
is Pilot Manufacturing’s fixed overhead budget variance for October?
ANSWER
INCORRECT
·
$131.25 F
·
$1,312.50 U
·
YOU WERE SURE AND INCORRECT
$1,312.50 F
·
THE CORRECT ANSWER
$131.25 U
·
I DON'T KNOW YET
The fixed overhead budget
variance for October is $131.25 U. The other answers are not
correct.
Fixed Manufacturing Overhead
Budget Variance = Actual Fixed Overhead Costs – Budgeted Fixed Overhead Costs
= $4,600 – ($3.25 × 1,375)
= $4,600 - $4,468.75 = $131.25
U
The variance is unfavorable
because the actual fixed overhead costs exceed budgeted costs.
Which
of the following best describes a disadvantage of standard costing which might
occur when the production manager purchases a large quantity of raw materials
which results in the production manager overproducing to obtain a favorable
fixed overhead variance?
ANSWER
INCORRECT
·
Outdated or inaccurate standards
·
YOU WERE SURE AND INCORRECT
Focus on operational
performance measures and visual management
·
Lack of timeliness
·
THE CORRECT ANSWER
Unintended behavioral
consequence
·
I DON'T KNOW YET
An unintended
behavioral consequence is a disadvantage of standard costing which
occurs occurs when the production manager purchases a large quantity of raw
materials and results in the production manager overproducing to obtain a
favorable fixed overhead variance.
An outdated or inaccurate
standard is a disadvantage when costs become outdated or inaccurate during
changes in the production process.
Lack of timeliness is a
disadvantage when a manager fails to compute updated variance costs.
A focus on operational
performance measures and visual management is a disadvantage when a manager
fails to provide accurate data to promote operational standards and visual
tools which might increase operational performance of front-line workers.
Pool
Manufacturing reported the following information for April. What is Pilot Manufacturing’s
fixed overhead volume variance for April?
|
|
|
|
Pool Manufacturing
Manufacturing Report for
April
|
|
|
Number of parts produced
|
40,000 parts
|
|
Standard variable manufacturing overhead rate
|
$35 per machine hour
|
|
Standard hours required per part
|
0.20 machine hours
|
|
Actual machine hours
|
3,250 machine hours
|
|
Actual variable manufacturing overhead costs
|
$102,000
|
ANSWER
INCORRECT
·
THE CORRECT ANSWER
$4,000 U
·
$4,000 F
·
YOU WERE SURE AND INCORRECT
$400 F
·
$400 U
·
I DON'T KNOW YET
Pilot Manufacturing’s fixed
overhead volume variance for April is $4,000 U. The other answers
are not correct.
Step 1: Compute Standard Fixed
Overhead Cost Allocated to Production
= 40,000 parts × .20 machine
hours × $35 per hour
= 8,000 machine hrs/part ×
$35/machine hr = $280,000
Step 2: Fixed Overhead Volume
Variance = Budgeted Fixed Overhead – Standard Fixed Overhead Cost Allocated to
Production
= $284,000 - $280,000 = $4,000
U
Marshall’s
Toy Shop produces and sells small baseballs for children. During the production
process, the producer uses twelve ounces of special glue for each baseball,
including an allowance for normal amounts of spoilage and waste. The manager
can purchase the glue for $.75 per ounce.
What
is the standard cost of glue for each baseball?
ANSWER
INCORRECT
·
$3.03
·
THE CORRECT ANSWER
$3.00
·
YOU WERE SURE AND INCORRECT
$3.30
·
$.30
·
I DON'T KNOW YET
The standard cost of glue for
each baseball is $3.00/oz. The other answers are not correct.
4 oz. × $.75/oz. = $3.00
Pool
Manufacturing manufactures parts for one type of pool. The managerial
accountant provided the following data for April:
|
|
|
|
Pool Manufacturing
Manufacturing Report for
April
|
|
|
Number of parts produced
|
40,000 parts
|
|
Standard variable manufacturing overhead rate
|
$35 per machine hour
|
|
Standard hours required per part
|
0.20 machine hours
|
|
Actual machine hours
|
3,250 machine hours
|
|
Actual variable manufacturing overhead costs
|
$102,000
|
What
is the variable manufacturing overhead efficiency variance in April?
ANSWER
INCORRECT
·
$28,000 F
·
$280,000 U
·
YOU WERE SURE AND INCORRECT
$28,000 U
·
THE CORRECT ANSWER
$280,000 F
·
I DON'T KNOW YET
The variable manufacturing
overhead efficiency variance in March is $280,000 F. The other
answers are not correct.
Variable Manufacturing Overhead
Efficiency Variance = Standard Rate × Actual Hours × Standard Hours Allowed.
= $35 × [3,250 machine hours –
(40,000 parts × 0.20 machine hours)]
= $35 × (3,250 machine hours
-8,000)
= ($35 × 8,000) = $280,000 F
The variance is favorable since
the standard machine hours exceeded the actual machine hours.
Standard
Quantity of Direct Labor × Standard Price of Direct Labor is the calculation to
compute ________.
ANSWER
INCORRECT
·
the variable manufacturing
overhead rate
·
YOU WERE SURE AND INCORRECT
standard cost of direct
materials
·
standard variable manufacturing
overhead
·
THE CORRECT ANSWER
standard cost of direct labor
·
I DON'T KNOW YET
Standard Quantity of Direct
Labor × Standard Price of Direct Labor is the calculation to compute the standard
cost of direct labor.
Total Estimated Variable
Manufacturing Overhead / Total estimated amount of the allocation base =
Variable Manufacturing Overhead Rate
Standard Quantity of Machine
Hours × Variable Manufacturing Overhead Rate = Standard Variable Manufacturing
Overhead
Standard Quantity of Direct
Materials × Standard Price of Direct Materials is the calculation
to compute the standard cost of direct materials.
Which
of the following best describes an advantage of a costing system that occurs
when a manager provides an employee with a reasonable or attainable goal?
ANSWER
INCORRECT
·
Standard costing systems
simplifying bookkeeping
·
YOU WERE SURE AND INCORRECT
Cost benchmark
·
Usefulness in budgeting
·
THE CORRECT ANSWER
Motivation
·
I DON'T KNOW YET
Motivation is
an advantage of a costing system that occurs when a manager provides an
employee with a reasonable or attainable goal.
Cost benchmark is an advantage
of standard costing which results when updated standards produce valid
benchmarks.
Usefulness in budgeting is an
advantage of standard costing which occurs when standards are used as the basis
for many components of the master budget.
Standard costing systems
simplifying bookkeeping is an advantage of standard costing which results when
Work in Process Inventory is recorded at standard cost instead of actual cost
and variances between actual and standard costs are immediately captured in
variance accounts on the general ledger.
Hillen
Enterprises produces wheat and flour for the baking industry. The managerial
accountant reported the following information at the end of the first quarter.
What is the direct materials price variance? Is the direct materials price
variance favorable or unfavorable?
|
|
|
|
Hillen Enterprises
Direct Materials Price Report
Quarter Ending March 31
|
|
|
Direct materials standard (10 lbs. per unit @$0.75/lb.)
|
$7.50 per finished good
|
|
Actual direct materials purchased
|
$40,000 pounds
|
|
Actual Direct Materials Used (AQU)
|
37,000 pounds
|
|
Actual Price (AP) paid per pound
|
$0.85
|
ANSWER
INCORRECT
·
THE CORRECT ANSWER
$4,000 unfavorable
·
$400 favorable
·
YOU WERE SURE AND INCORRECT
$4,000 favorable
·
$400 unfavorable
·
I DON'T KNOW YET
The direct materials price
variance is $4,000 unfavorable.
AQP × (AP – SP)
40,000 × ($0.85 - $0.75) =
40,000 × $0.10 = $4,000 unfavorable
The actual direct material cost
per pound was more than the standard direct material cost per pound, so the
variance is unfavorable. The other answers are not correct.
Actual
Hours × (Actual Rate – Standard Rate) is the formula to compute the ________.
ANSWER
INCORRECT
·
THE CORRECT ANSWER
direct labor rate variance
·
direct labor efficiency
variance
·
YOU WERE SURE AND INCORRECT
direct material quantity
variance
·
direct material price variance
·
I DON'T KNOW YET
Actual Hours × (Actual Rate –
Standard Rate) is the formula to compute the direct labor rate variance.
Standard Rate × (Actual Hours –
Standard Hours Allowed) is the formula to compute the direct labor efficiency
variance.
Actual Quantity Purchased ×
(Actual Price – Standard Price) is the formula to compute the direct material
price variance.
Standard Price × (Actual
Quantity Used – Standard Quantity Allowed) is the formula to compute the direct
material quantity variance.
Total
estimated variable Manufacturing Overhead / Total estimated amount of the
allocation base is the calculation to compute the ________.
ANSWER
INCORRECT
·
Standard Fixed Manufacturing
Overhead
·
standard cost of variable
manufacturing overhead
·
YOU WERE SURE AND INCORRECT
Fixed Manufacturing Overhead
Rate
·
THE CORRECT ANSWER
Variable Manufacturing Overhead
Rate
·
I DON'T KNOW YET
Total estimated variable
Manufacturing Overhead / Total estimated amount of the allocation base is
the calculation to compute the Variable Manufacturing Overhead rate.
Standard Quantity of Machine Hours
× Variable Manufacturing Overhead rate = Standard Variable Manufacturing
Overhead = Standard cost of variable manufacturing overhead
Total Estimated Fixed
Manufacturing Overhead / Total estimated amount of the allocation base = Fixed
Manufacturing Overhead Rate
Standard Quantity of Machine
Hours × Fixed Manufacturing Overhead rate = Standard Fixed Manufacturing
Overhead
Pool
Manufacturing manufactures parts for one type of pool. The managerial
accountant provided the following data for April:
|
|
|
|
Pool Manufacturing
Manufacturing Report for
April
|
|
|
Number of parts produced
|
40,000 parts
|
|
Standard variable manufacturing overhead rate
|
35 per machine hour
|
|
Standard hours required per part
|
0.20 machine hours
|
|
Actual machine hours
|
3,250 machine hours
|
|
Actual variable manufacturing overhead costs
|
$102,000
|
What
are the actual costs in April associated with the manufacturing the pool parts?
ANSWER
INCORRECT
·
$10,198.50
·
YOU WERE SURE AND INCORRECT
$100,198.50
·
$1,019.85
·
THE CORRECT ANSWER
$101,985
·
I DON'T KNOW YET
The actual costs in April
associated with the manufacturing the pool parts = $101,985.
First, compute the actual rate:
Actual Rate = $102,000 / 3,250 = $31.38.
Next, compute the actual cost:
Actual Hours × Actual Rate = 3,250 machine hours × $31.38 = $101,985. The other
answers are not correct.
Which
of the following is the formula to compute the direct labor rate variance?
ANSWER
INCORRECT
·
THE CORRECT ANSWER
Actual Hours × (Actual Rate –
Standard Rate)
·
YOU WERE SURE AND INCORRECT
Actual Quantity Purchased ×
(Actual Price – Standard Price)
·
Standard Rate × (Actual Hours –
Standard Hours Allowed)
·
Standard Price × (Actual
Quantity Used – Standard Quantity Allowed)
·
I DON'T KNOW YET
The formula to compute the
direct labor rate variance is Actual Hours × (Actual Rate – Standard
Rate).
The formula to compute the
direct labor efficiency variance is Standard Rate × (Actual Hours – Standard
Hours Allowed).
The formula to compute the
direct material price variance is Actual Quantity Purchased × (Actual Price –
Standard Price).
The formula to compute the
direct material quantity variance is Standard Price × (Actual Quantity Used –
Standard Quantity Allowed).
Pool
Manufacturing manufactures parts for one type of pool. The managerial
accountant provided the following data for March:
|
|
|
|
Pool Manufacturing
Manufacturing Report for
March
|
|
|
Number of parts produced
|
35,000 parts
|
|
Standard variable manufacturing overhead rate
|
30 per machine hour
|
|
Standard hours required per part
|
0.20 machine hours
|
|
Actual machine hours
|
3,250 machine hours
|
|
Actual variable manufacturing overhead costs
|
$92,000
|
What
are the actual costs in March associated with the manufacturing the pool parts?
ANSWER
INCORRECT
·
THE CORRECT ANSWER
$92,007.50
·
$920,075
·
$9,2007.50
·
YOU WERE SURE AND INCORRECT
$9,200.70
·
I DON'T KNOW YET
The actual costs associated
with the manufacturing the pool parts = $92,007.50.
First, compute the actual rate:
Actual Rate = $92,000 / 3,250 = $28.31.
Next, compute the actual cost:
Actual Hours × Actual Rate = 3,250 machine hours × $28.31 = $92,007.50. The
other answers are not correct.
The
unintended behavioral consequence, a disadvantage of standard costing, occurs
when ________.
ANSWER
INCORRECT
·
costs become outdated or
inaccurate during changes in the production process
·
a manager fails to compute
updated variance costs
·
YOU WERE SURE AND INCORRECT
a manager fails to provide
accurate data to promote operational standards and visual tools which might
increase operational performance of front-line workers
·
THE CORRECT ANSWER
the production manager
purchases a large quantity of raw materials which results in the production
manager overproducing to obtain a favorable fixed overhead variance
·
I DON'T KNOW YET
The unintended behavioral
consequence is a disadvantage of standard costing which occurs when the use of
traditional standards produce unintended behavioral results. This could include
a situation where a production manager purchases a large quantity of
raw materials which results in the production manager overproducing to obtain a
favorable fixed overhead variance.
An outdated or inaccurate
standard is a disadvantage when costs become outdated or inaccurate during
changes in the production process.
Lack of timeliness is a
disadvantage when a manager fails to compute updated variance costs.
A focus on operational
performance measures and visual management is a disadvantage when a manager
fails to provide accurate data to promote operational standards and visual
tools, which might increase operational performance of front-line workers.
Marty’s
Motors produces metal for parts in the automotive industry. The managerial
accountant reported the following information at the end of the second quarter.
What is the direct materials price variance? Is the direct materials price
variance favorable or unfavorable?
|
|
|
|
Marty’s Motors
Direct Materials Price Report
Quarter Ending June
|
|
|
Direct materials standard (9 lbs. per unit @$0.85/lb.)
|
$7.65 per finished good
|
|
Actual direct materials purchased
|
50,000 pounds
|
|
Actual Direct Materials Used (AQU)
|
47,000 pounds
|
|
Actual Price (AP) paid per pound
|
$0.90
|
ANSWER
INCORRECT
·
$250 unfavorable
·
$250 favorable
·
YOU WERE SURE AND INCORRECT
$2,500 favorable
·
THE CORRECT ANSWER
$2,500 unfavorable
·
I DON'T KNOW YET
The direct materials price
variance is $2,500 unfavorable.
AQP × (AP – SP)
50,000 × ($0.90 - $0.85) =
50,000 × $0.05 = $2,500 unfavorable
The actual direct material cost
per pound was less than the standard direct material cost per pound the
variance is favorable, otherwise unfavorable. The other answers are not correct.
The
variable overhead rate variance ________ .
ANSWER
INCORRECT
·
is directly tied to the
efficiency with which the machine hours are used
·
THE CORRECT ANSWER
is the difference between the
actual variable manufacturing overhead costs incurred during the period and the
amount of variable manufacturing overhead expected, considering the number of
actual hours worked
·
YOU WERE SURE AND INCORRECT
is the difference between the
actual machine hours run and the standard machine hours allowed for the actual
volume, computed at the variable manufacturing overhead rate
·
is NOT known as the variable
overhead spending variance
·
I DON'T KNOW YET
The variable overhead rate
variance is the difference between the actual variable manufacturing
overhead costs incurred during the period and the amount of variable
manufacturing overhead expected, considering the number of actual
hours worked is true.
The variable overhead
efficiency variance is the difference between the actual machine hours run and
the standard machine hours allowed for the actual volume, computed at the
variable manufacturing overhead rate.
The variable overhead
efficiency variance is directly tied to the efficiency with which the machine
hours are used instead of the variable overhead rate variance.
The variable overhead rate
variance is known as the variable overhead spending variance.
Which
of the following is the formula to compute the direct labor efficiency
variance?
ANSWER
INCORRECT
·
Actual Quantity Purchased ×
(Actual Price – Standard Price)
·
YOU WERE SURE AND INCORRECT
Standard Price × (Actual
Quantity Used – Standard Quantity Allowed)
·
Actual Hours × (Actual Rate –
Standard Rate)
·
THE CORRECT ANSWER
Standard Rate × (Actual Hours –
Standard Hours Allowed)
·
I DON'T KNOW YET
Standard Rate × (Actual Hours –
Standard Hours Allowed) is the formula to compute the direct
labor efficiency variance.
Actual Hours × (Actual Rate –
Standard Rate) is the formula to compute the direct labor rate variance.
Actual Quantity Purchased ×
(Actual Price – Standard Price) is the formula to compute the direct material
price variance.
Standard
Price × (Actual Quantity Used – Standard Quantity Allowed) is the formula to
compute the direct material quantity variance.
Which
of the following is NOT true about the variable overhead rate variance?
ANSWER
INCORRECT
·
THE CORRECT ANSWER
The variable overhead rate
variance is directly tied to the efficiency with which the machine hours are
used instead of the variable overhead rate variance.
·
YOU WERE SURE AND INCORRECT
The variable overhead rate
variance is the difference between the actual variable
manufacturing overhead costs incurred during the period and the amount of
variable manufacturing overhead expected, considering the number of actual
hours worked.
·
The variable overhead rate
variance is known as the variable overhead spending variance.
·
Variable manufacturing overhead
is made up of a number of various costs, including indirect materials, indirect
labor, or other variable overhead costs.
·
I DON'T KNOW YET
The variable overhead rate
variance is directly tied to the efficiency with which the machine hours are
used instead of the variable overhead rate variance is NOT a true statement. The variable overhead efficiency variance
is directly tied to the efficiency with which the machine hours are used instead
of the variable overhead rate variance. The other answers are true statements
about the variable overhead rate variance.
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