5.2 Review - Controlling Performance in Cost Centers
The difference between standard hours and actual hours multiplied by the standard rate is the:
Labor efficiency variance
The labor efficiency variance is the difference between the:
Actual labor hours and the standard labor hours multiplied by the standard rate
A favorable labor efficiency variance would occur when the:
Actual labor hours are less than the standard labor hours
Which of the following would NOT cause a material quantity variance?
Delivery costs
The following information relates to Bergen Corporation: Standard cost per unit: Direct materials (6 pounds) $18 Direct labor (3 hours) 24 Actual resources used: Direct materials 12,500 pounds at $2.95 Direct labor 5,900 hours at $7.85 Units of output 2,000 Based on the information above, the labor efficiency variance is:
Direct labor hours that should have been used: 2,000 units x 3 hours = 6,000 hours Labor efficiency variance: (6,000 standard hours - 5,900 actual hours) x 8 = $800 F
The following information relates to Bergen Corporation: Standard cost per unit: Direct materials (6 pounds) $18 Direct labor (3 hours) 24 Actual resources used: Direct materials 12,500 pounds at $2.95 Direct labor 5,900 hours at $7.85 Units of output 2,000 Based on the information above, the number of direct labor hours that should have been used is:
Direct labor hours that should have been used: 2,000 units x 3 hours = 6,000 hours
The following information relates to Bergen Corporation: Standard cost per unit: Direct materials (6 pounds) $18 Direct labor (3 hours) 24 Actual resources used: Direct materials 12,500 pounds at $2.95 Direct labor 5,900 hours at $7.85 Units of output 2,000 Based on the information above, the journal entry to record the use of materials and the materials quantity variance would include a debit to:
Direct materials that should have been used: 2,000 units x 6 lbs. = 12,000 lbs. Materials quantity variance: (12,000 lbs. - 12,500 actual lbs.) x $3 = $1,500 U
The following information relates to Bergen Corporation: Standard cost per unit: Direct materials (6 pounds) $18 Direct labor (3 hours) 24 Actual resources used: Direct materials 12,500 pounds at $2.95 Direct labor 5,900 hours at $7.85 Units of output 2,000 Based on the information above, the materials quantity variance is:
Direct materials that should have been used: 2,000 units x 6 lbs. = 12,000 lbs. Materials quantity variance: (12,000 lbs. - 12,500 actual lbs.) x $3 = $1,500 Unfavorable
The following information relates to Bergen Corporation: Standard cost per unit: Direct materials (6 pounds) $18 Direct labor (3 hours) 24 Actual resources used: Direct materials 12,500 pounds at $2.95 Direct labor 5,900 hours at $7.85 Units of output 2,000 Based on the information above, the quantity of direct materials that should have been used is:
Direct materials that should have been used: 2,000 units x 6 lbs. = 12,000 lbs.
Twin Pines Custom Trim established the standard labor rate as $8.60 and the standard hours as 4 hours per unit. During June, 100 units were manufactured, and 410 actual labor hours were incurred at a rate of $8.50 per hour. The labor efficiency variance is:
Labor efficiency variance: (400 standard hours - 410 actual hours) x $8.60 = $86 U
The following information relates to Almira's operations for the month of August: Actual quantity of materials used 22,000 pounds Standard quantity of materials 20,000 pounds Actual price of materials $ 8.00 Standard price of materials $ 7.60 Actual direct labor hours 40,000 Standard direct labor hours 42,000 Actual direct labor rate $15.00 Standard direct labor rate $14.00 Given the information above, the labor efficiency variance is:
Labor efficiency variance: (42,000 standard hours - 40,000 actual hours) x $14.00 = $28,000 Favorable
The following information relates to Almira's operations for the month of August: Actual quantity of materials used 22,000 pounds Standard quantity of materials 20,000 pounds Actual price of materials $ 8.00 Standard price of materials $ 7.60 Actual direct labor hours 40,000 Standard direct labor hours 42,000 Actual direct labor rate $15.00 Standard direct labor rate $14.00 Given the information above, the labor rate variance is:
Labor rate variance: ($14.00 - $15.00) x 40,000 actual hours = $40,000 Unfavorable
The following information relates to Bergen Corporation: Standard cost per unit: Direct materials (6 pounds) $18 Direct labor (3 hours) 24 Actual resources used: Direct materials 12,500 pounds at $2.95 Direct labor 5,900 hours at $7.85 Units of output 2,000 Based on the information above, the labor rate variance is:
Labor rate variance: ($8.00 - $7.85) x 5,900 actual hours = $885 F
The difference between the standard price and the actual price multiplied by the actual quantity of materials is the:
Materials price variance
The following information relates to Bergen Corporation: Standard cost per unit: Direct materials (6 pounds) $18 Direct labor (3 hours) 24 Actual resources used: Direct materials 12,500 pounds at $2.95 Direct labor 5,900 hours at $7.85 Units of output 2,000 Based on the information above, the materials price variance for materials actually used is:
Materials price variance: ($3 - $2.95) x 12,500 actual lbs. = $625 Favorable
The following information relates to Almira's operations for the month of August: Actual quantity of materials used 22,000 pounds Standard quantity of materials 20,000 pounds Actual price of materials $ 8.00 Standard price of materials $ 7.60 Actual direct labor hours 40,000 Standard direct labor hours 42,000 Actual direct labor rate $15.00 Standard direct labor rate $14.00 Given the information above, the materials price variance is:
Materials price variance: ($7.60 - $8.00) x 22,000 actual lbs. = $8,800 Unfavorable
The variance computed by multiplying the difference between the actual and standard quantity of materials by the standard price paid is the:
Materials quantity variance
The following information relates to Almira's operations for the month of August: Actual quantity of materials used 22,000 pounds Standard quantity of materials 20,000 pounds Actual price of materials $ 8.00 Standard price of materials $ 7.60 Actual direct labor hours 40,000 Standard direct labor hours 42,000 Actual direct labor rate $15.00 Standard direct labor rate $14.00 Given the information above, the materials quantity variance is:
Materials quantity variance: (20,000 standard lbs. - 22,000 actual lbs.) x $7.60 = $15,200 Unfavorable
Which variance compares actual inputs used at actual and standard prices?
Price variance
Standard costs are used to control all of the following costs EXCEPT:
Relevant costs
The following information relates to Lamb Company: Actual units completed 1,440 units Standard labor rate per hour $10 Standard hours per unit 250 hours Labor rate variance $33,730 U Labor efficiency variance $27,000 F Given the information above, the actual labor hours were:
Standard labor cost per unit: 250 hours x $10 = $2,500 Standard labor hours: 250 hours x 1,440 units = 360,000 hours Actual labor hours: (360,000 - AH) x $10 = $27,000 F AH = 357,300 actual hours
The following information relates to Lamb Company: Actual units completed 1,440 units Standard labor rate per hour $10 Standard hours per unit 250 hours Labor rate variance $33,730 U Labor efficiency variance $27,000 F Given the information above, total actual labor costs are:
Standard labor cost per unit: 250 x $10 = $2,500 Standard labor hours: 250 hours x 1,440 units = 360,000 hours Actual labor hours: [360,000 standard hours - AH) x $10 = $27,000 F AH = 357,300 actual hours Actual labor costs: ($10 - AR) x 357,300 actual hours = $33,730 U AR = $9.91 Total labor costs: 357,300 actual hours x $9.91 = $3,540,843
The following information relates to Lamb Company: Actual units completed 1,440 units Standard labor rate per hour $10 Standard hours per unit 250 hours Labor rate variance $33,730 U Labor efficiency variance $27,000 F Given the information above, the standard labor cost per unit is:
Standard labor cost per unit: 250 hours x $10 = $2,500
The labor rate variance is the difference between the:
Standard labor rate and the actual labor rate multiplied by the actual labor hours
The following information relates to Bergen Corporation: Standard cost per unit: Direct materials (6 pounds) $18 Direct labor (3 hours) 24 Actual resources used: Direct materials 12,500 pounds at $2.95 Direct labor 5,900 hours at $7.85 Units of output 2,000 Based on the information above, the journal entry to record the purchase of materials and the materials price variance would include a debit to:
Standard materials purchased: 12,500 x ($18 / 6) = $37,500
To prevent quantity variances from being influenced by price changes, which is used?
Standard price
A favorable materials price variance would occur when the:
Standard price is greater than the actual price
A materials quantity variance is unfavorable when:
Standard quantity is less than actual quantity
Which of the following is NOT an advantage of standard costing?
Standards are reported as specific figures but are treated by managers as ranges of acceptable performance
All favorable labor rate variances indicate that:
The actual labor rate is less than the standard labor rate
The variance computed by multiplying the difference between the actual rate and the standard rate by the actual hours is:
The labor rate variance
Which of the following is NOT a disadvantage of standard costing?
The setting of standard costs requires an analysis of cost behavior and a determination of the components of manufacturing overhead costs
Sammamish Company utilizes a standard cost system. The standard quantity for production is 10 pounds of material, and the standard price is $3 per pound. The actual quantity was 9 pounds, and the actual price was $3.20 per pound. Given this information, Sammamish would have a(n):
Unfavorable materials price variance and a favorable materials quantity variance
Which of the following compares actual inputs at standard prices with standard quantity of inputs at standard prices?
Usage variance
Management by exception uses which of the following?
Variances to isolate problem areas
Which of the following is a true statement?
When expected price is greater than actual price, a favorable variance results
All of the following are criteria for investigating a variance EXCEPT:
Whether favorable or unfavorable
The following information relates to Bergen Corporation: Standard cost per unit: Direct materials (6 pounds) $18 Direct labor (3 hours) 24 Actual resources used: Direct materials 12,500 pounds at $2.95 Direct labor 5,900 hours at $7.85 Units of output 2,000 Based on the information above, the journal entry to record the labor costs and variances for Bergen Corporation would include a debit to:
Work-in-process: 2,000 units x $24 = $48,000
Standard costs are generally based on:
he estimated average production costs for the period
Which of the following may affect the behavior of costs?
~Production methods ~Technology ~Plant Layout ~ALL OF THESE MAY AFFECT THE BEHAVIOR OF COSTS
