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Exam 8: Evaluating Variances From Standard Costs

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Question 21

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Financial reporting systems that are guided by the principle of exceptions concept focus attention on variances from standard costs.

A) True
B) False

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Question 22

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The variance from standard for factory overhead cost resulting from operating at a level above or below 100% of normal capacity is termed volume variance.

A) True
B) False

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Question 23

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Volume variance measures the use of fixed factory overhead resources.

Incurring actual indirect factory wages in excess of budgeted amounts for actual production results in a

Define nonfinancial performance measures.  What are they used for and what are some common examples?

The following are inputs and outputs to the help desk: operator training number of calls per day maintenance of computer equipment number of operators number of complaints Identify whether each is an input or an output to the help desk.

A company records its inventory purchases at standard cost but also records purchase price variances. The company purchased 5,000 widgets at $8.00 each, and the standard cost for the widgets is $7.60. Which of the following would be included in the journal entry?

If the price paid per unit differs from the standard price per unit for direct materials, the variance is a

The following data is given for the Taylor Company: Overhead is applied based on standard labor hours. Compute the direct materials price and quantity variances for Taylor Company.

A company records inventory purchases at standard cost and also records purchase price variances. Prepare the  journal entry for a purchase of 6,000 widgets that were bought at $8.00 and have a standard cost of $8.15.

Titus Company purchased and used 650 pounds of tomatoes (direct materials) to produce a taco sauce with a 635 pound standard direct materials requirement. The standard materials price is $22.40 per pound. The actual price of the tomatoes was $22.20 per pound. Prepare the journal entries to record (1) the purchase of the tomatoes and (2) the tomatoes entering production.  Titus records standards and variances in the general ledger.

In most businesses, cost standards are established principally by accountants.

The Flapjack Corporation had 8,200 actual direct labor hours at an actual rate of $12.40 per hour. Original production had been budgeted for 1,100 units, but only 1,000 units were actually produced. Labor standards were 7.6 hours per completed unit at a standard rate of $13.00 per hour. The labor rate variance is

The standard costs and actual costs for direct labor in the manufacture of 2,500 units of product are as follows: The direct labor time variance is

Rosser Company produces a container that requires 4 yards of material per unit. The standard price of one yard of material is $4.50. During the month, 9,500 chairs were manufactured using 37,300 yards of material. Journalize the entry to record the standard direct materials used in production.

The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are The amount of the direct materials quantity variance is

The following data is given for the Stringer Company: Overhead is applied on standard labor hours. The direct materials price variance is:

A negative fixed overhead volume variance can be caused due to the following except

Tippi Company produces lamps that require 2.25 standard hours per unit at an hourly rate of $15.00 per hour. Production of 7,700 units required 17,550 hours at an hourly rate of $15.20 per hour. What is the direct labor? (a) rate variance (b) time variance (c) total cost variance?

Variances from standard costs are reported to