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Exam 9: Standard Costing: a Functional-Based Control Approach

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Question 41

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Organics Corporation uses two different types of labor to manufacture its product. The types of labor, Cutting and Setup, have the following standards: $\begin{array} { l r r r } \text { Labor Type } & \text { Standard Mix } & \text { Standard Unit Price } & \text { Standard Cost } \\ \text { Cutting } & 400 \text { hours } & \$ 6.00 \text { per unit } & \$ 2,400 \\ \text { Setup } & 100 \text { hours } & 4.00 \text { per unit } & \$ 400 \end{array}$ Yield 2,500 units During July, the following actual production in formation was provided: $\begin{array}{ll}\text { Labor Type } & \text { A.ctual Mix } \\\text { Cutting } & 3,500 \text { hours } \\\text { Setup } & 1,500 \text { hours }\end{array}$ Yield 22,500 units Required: Calculate the labor mix and yield variances.

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Labor mix variance:SM(Cutting) = (400/50...

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Question 42

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San Francisco Corporation uses two materials in the production of its product. The materials, X and Y, have the following standards: $\begin{array}{l}\begin{array} { l r r r } \text { Material } & \text { Standard Mix } & \text { Standard Unit Price } & \text { Standard Cost } \\\text { X } & 3,500 \text { units } & \$ 1.00 \text { per unit } & \$ 3,500 \\\text { Y } & 1,500 \text { units } & 3.00 \text { per unit } & \$ 4,500 \\\text { Yield } & 4,000 \text { units } & &\end{array}\\\text { During April, the following actual production information was provided: }\\\begin{array} { l l } \text { Material } & \text { Actual Mix } \\\hline \mathrm { Y } & 30,000 \text { units } \\\mathrm { Y } & 20,000 \text { units } \\\text { Yield } & 36,000 \text { units }\end{array}\end{array}$ What is the materials mix variance?

A) $10,000 (U)
B) $5,000 (F)
C) $10,000 (F)
D) $15,000 (F)

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Question 43

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If the standard quantity (SQ) , actual quantity (AQ) , standard price (SP) , and actual price (AP) are 350 units, 400 units, $12, and $13 respectively, then the total budget variance is _____.

The standard overhead cost assigned to each unit of product manufactured is called the

Biscuit Company has developed the following standards for one of its products. Direct labor hours is the driver used to assign overhead costs to products. $\begin{array}{ll}\text { Direct materials: } & 10 \text { pounds } \times \$ 3 \text { per pound } \\\text { Direct labor: } & 2.5 \text { hours } \times \$ 8 \text { per hour } \\\text { Variable manufacturing overhead: } & 2.5 \text { hours } \times \$ 2 \text { per hour }\end{array}$ $\text { The following activity occurred during the month of June: }$ $\begin{array}{ll}\text { Materials purchased: } & 125,000 \text { pounds at } \$ 2.60 \text { per pound } \\\text { Materials used: } & 110,000 \text { pounds } \\\text { Units produced: } & 10,000 \text { units } \\\text { Direct labor: } & 24,000 \text { hours at } \$ 7.50 \text { per hour } \\\text { Actual variable manufacturing overhead: } & \$ 51,000\end{array}$ The company records materials price variances at the time of purchase. The direct labor efficiency variance is

The standard cost sheet includes all of the following EXCEPT

Colina Production Company uses a standard costing system. The following information pertains to the current year. Direct labor hours is the driver used to assign overhead costs to products. $\begin{array}{ll}\text { Actual production } & 5,500 \text { units } \\\text { Actual factory overhead costs ( } \$ 16,500 \text { is fixed) } & \$ 40,125 \\\text { Actual direct labor costs }(11,250 \text { hours) } & \$ 131,625 \\\text { Standard direct labor for } 5,500 \text { units: } & \\\text { Standard hours allowed } & 11,000 \text { hours } \\\text { Labor rate } & \$ 12.00\end{array}$ The factory overhead rate is based on an activity level of 10,000 direct labor hours. Standard cost data for 5,000 units is as follows: $\begin{array}{lr}\text { Variable factory overhead } & \$ 22,500 \\\text { Fixed factory overhead } & 13,500 \\\text { Total factory overhead } & \mathbf{\underline { 36 , 0 0 0 }}\end{array}$ What is the fixed overhead volume variance for Colina Production Company?

Compare and contrast mix and yield variances.

Standard costs are the amount that should be spent to produce a product or service.

All variances accounts are closed out at the end of the year.

The unit standard cost is

San Francisco Corporation uses two materials in the production of its product. The materials, X and Y, have the following standards: $\begin{array}{l}\begin{array} { l r r r } \text { Material } & \text { Standard Mix } & \text { Standard Unit Price } & \text { Standard Cost } \\\text { X } & 3,500 \text { units } & \$ 1.00 \text { per unit } & \$ 3,500 \\\text { Y } & 1,500 \text { units } & 3.00 \text { per unit } & \$ 4,500 \\\text { Yield } & 4,000 \text { units } & &\end{array}\\\text { During April, the following actual production information was provided: }\\\begin{array} { l l } \text { Material } & \text { Actual Mix } \\\hline \mathrm { Y } & 30,000 \text { units } \\\mathrm { Y } & 20,000 \text { units } \\\text { Yield } & 36,000 \text { units }\end{array}\end{array}$ What is the materials yield variance?

How are standards developed? What is the difference between ideal and currently attainable standards?

A materials price variance would NOT be caused by

Which of the following is true about the variable overhead spending variance?

Malkovich Company uses a standard costing system. The following information pertains to direct materials for the month of July: $\begin{array}{ll}\text { Standard price per lb. } & \$ 18.00 \\\text { Actual purchase price per lb. } & \$ 16.50 \\\text { Quantity purchased } & 3,100 \mathrm{lbs} . \\\text { Quantity used } & 2,950 \mathrm{lbs} \\\text { Standard quantity allowed for actual output } & 3,000 \mathrm{lbs} \\\text { Actual output } & 1,000 \text { units }\end{array}$ Malkovich Company reports its material price variances at the time of purchase. What is the material usage variance for Malkovich Company?

Bodacious Corporation produced 100 units of Product AA. The total standard and actual costs for materials and direct labor for the 100 units of Product AA are as follows: $\begin{array} { l l l l } \text { Materials: } & & \text { Standard } & \text { Actual } \\ \text { Standard: } & 200 \text { pounds at } \$ 3.00 \text { per pound } & \$ 600 & \\ \text { Actual: } & 220 \text { pounds at } \$ 2.85 \text { per pound } & & \$ 627 \\\\\text { Direct labor: } & \\ \text { Standard: } & 400 \text { pounds at } \$ 15.00 \text { per pound } & \$ 600 & \\ \text { Actual: } & 368 \text { pounds at } \$ 16.50 \text { per pound } & & \$ 6,027 \end{array}$ What is the labor efficiency variance for Bodacious Corporation?

A variable overhead efficiency variance could be caused by

Using more highly skilled direct laborers might affect which of the following variances?

If actual fixed manufacturing overhead was $55,000 and there was a $1,400 unfavorable spending variance and a $1,000 unfavorable volume variance, budgeted fixed manufacturing overhead must have been