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Exam 8: Flexible Budgets and Standard Costing

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Question 61

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The direct materials quantity variance is:

A) $30,000 favorable
B) $13,750 unfavorable
C) $16,250 favorable
D) $30,000 unfavorable
E) $13,750 favorable

F) B) and C)
G) C) and E)

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Question 62

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Fixed budget performance reports compare actual results with the expected amounts in the fixed budget.

A) True
B) False

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Question 63

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Overhead cost variance is:

A flexible budget expresses variable costs on a per unit basis and fixed costs on a total basis.

An analytical technique used by management to focus on the most significant variances and give less attention to the areas where performance is satisfactory is known as:

Use the following data to find the direct labor rate variance. $\begin{array}{llcc} \text { Direct labor standard (4 hrs. @\$7/hr.) } & \text {\$ 28 per unit } \\ \text { Actual hours worked per unit } & \text { 3.5 hours } \\ \text { Actual units produced } & \text { 3,500 units } \\ \text { Actual rate per hour } & \text { \$ 7.50 } \\\end{array}$

The amounts in a flexible budget are based on one expected level of sales or production.

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

The difference between the actual sales and the flexible budget sales is called the ______________________ variance.

The following information describes a company's use of direct labor in a recent period: $\begin{array} { l r } \text { Actual hours used } & 45,000 \\\text { Actual rate per hour } & \$ 15 \\\text { Standard rate per hour } & \$ 14 \\\text { Standard hours for units produced } & 47,000\end{array}$ -The direct labor efficiency variance is:

The costs that should be incurred under normal conditions to produce a specific product or component or to perform a specific service are:

An unfavorable variance is recorded with a debit.

Falcon Company's output for a period was assigned the standard direct labor cost of $17,160.If the company had a favorable direct labor rate variance of $1,000 and an unfavorable direct labor efficiency variance of $275, what was the total actual cost of direct labor incurred during the period?

Whistler Company determined that in the production of their products last period, they had a favorable price variance and an unfavorable quantity variance for direct materials.What might be the cause of this pattern of variances?

The fixed overhead variance can be broken down into the _________________ variance and the _________________ variance.

Variable budget is another name for:

An internal report that compares actual cost and sales amounts with budgeted amounts and identifies the differences between them as favorable or unfavorable variances is called a:

Although a fixed budget is only useful over the relevant range of operations, a flexible budget is useful over all possible production levels.

Duval, Inc., budgets direct materials at $1/liter and requires 4 liters per unit of finished product.April's activities show usage of 832 liters to complete 196 units at a cost of $798.72. Calculate the direct materials price and quantity variances.

The standard materials cost to produce one unit of Product K is 7 pounds of material at a standard price of $32 per pound.In manufacturing 8,000 units, 54,000 pounds of material were used at a cost of $30 per pound.What is the total direct material cost variance?