ACC 10

A quantity standard indicates how much of an input should be used to make a unit of product or provide a unit of service.

true

If the actual hourly rate is greater than the standard hourly rate, the labor rate variance is labeled unfavorable (U).

true

material quantity variance

(AQ*SP)-(SQ*SP)

Variable overhead efficiency variance

(AH*SR)-(SH*SR)

labor efficiency variance

(AH*SR)-(SH*SR)

material price variance

(AQ*AP)-(AQ*SP)

material spending variance

material price variance- material quantity variance

If variable manufacturing overhead is applied on the basis of direct labor-hours and the variable overhead rate variance is favorable, then

the standard overhead variable overhead rate exceeded the actual rate

A favorable labor rate variance indicates that

the standard rate exceeds the actual rate

the labor efficiency is labeled (F) if actual hours are less than standard hours allowed

true

labor rate variance

(AH*AR)-(AH*SR)

standard quantity allowed

actual output* standard quantity per unit

An unfavorable materials quantity variance occurs when the actual quantity used in production is less than the standard quantity allowed for the actual output of the period.

false

In general, the production manager is responsible for the materials price variance.

false

Waste on the production line will result in an unfavorable materials price variance.

false

if skilled workers with high hourly rates of pay are given duties that require little skill and call for low hourly rates, then this will result in a favorable labor rate variance

false

variable overhead rate

(AH*AR)-(AH*SR)