Chapter 10 Managerial accounting

the spending variance is

(AQXAP)-(SQXSP)

an unfavorable labor efficiency variance can result from

- insuffiecient product demand - faculty equpment - poorly motivated workers

the calculation of standard price per unit of direct materials includes

- purchase discounts - shipping costs - purchase price of the materials

A quantity variance is

calculated using the standard price of the input

direct material stanrds

should be based on imput and production and purchasing managers are based on standard price and quaintity

the difference between actual results and the flexible budget amount is an ___ variance

spending

The amount of direct labor hours that should be used to produce one unit of finished goods is the ___ hours per unit

standard

a price variance is the difference between the

the actual price and the standard price multiplied by the actual amount of the input.

When setting direct labor standards:

the production manager should be consulted.time and motion studies may be used.It is best to use tight but attainable standards.

when calculating the labor rate variance, multiply the actual hours worked times the __ labor rate and compare it to the actual hours worked times the __ labor rate.

-standard-actual

the standard price of materials is 3.50 per pound and the standard quantity allowed for actual output is 7000 pounds. If the actual quantity purchased and used was 6700 pounds, and the actual price per pound was 3.40, the direct materials price variance is _____ favorable or unfavorable

670 F

Using the information provided, calculate the direct material quantity variance.Standard price: $3.00 per poundActual price $3.20 per poundActual quantity used $5,200poundsStandard quantity allowed$5,000pounds

SP(AQ-SQ)= 3.00(5,200-5000)=$600 unfavorable

If the actual level of activity is greater than the planned level of activity, the activity variances will be

UNFAV

250

standard

the materials price variance

- generally the responsibility of the purchasing manager - impacted by the delivry method chosen - charged to the production manager when production problems occur

The material quantity variance reflects the difference between the ____ quantity of materials used in production and the ___ quantity allowed for the actual out put

actual standard

The materials price variance is generally calculated at the time materils are purchased because

it simplifies bookkeeping, management can generate more timely variance reports, it allows materials to be carried in the inventory accounts at standard cost

the final, delivered price that should be paid for each unit of direct materials is the ______ price per unit of materials

standard