Quarles: Lecture Ch 10

XXX Company Actual Hours of Input at Actual Rate(AH × AR)= (2,200 hours × $1.90) Actual Hours of Input at Standard Rate(AH × SR)= (2,000 hours × $2.00) Standard Hours of Input at Standard Rate(SH × SR) = (2,200 hours × $2.00) Knowledge Check 01 What is the spending variance?

$180 U

Zeta Corporation is a manufacturer of sports caps, which require soft fabric. The standards for each cap allow 2.00 yards of soft fabric, at a cost of $2.00 per yard. During the month of January, the company purchased 25,000 yards of soft fabric at $2.10 per yard, to produce 12,000 caps. What is Zeta Corporation's materials price variance for the month of January?

$2,500 U

XXX Company Actual Hours of Input at Actual Rate(AH × AR)= (2,200 hours × $1.90) Actual Hours of Input at Standard Rate(AH × SR)= (2,000 hours × $2.00) Standard Hours of Input at Standard Rate(SH × SR) = (2,200 hours × $2.00) Knowledge Check 01 What is the labor rate variance?

$220 F

Standard rate per direct labor-hour $2 Standard direct labor-hours for each unit produced 3 Units manufactured 1,000 Actual direct labor-hours worked during the month 3,300 Total actual variable manufacturing overhead $6,600 Knowledge Check 01 Assume that direct labor-hours is used as the overhead allocation base. What is the variable overhead efficiency variance?

$600 U

The standard quantity per unit defines the ________.

amount of direct materials that should be used for each unit of finished product including an allowance for normal inefficiencies, such as scrap and spoilage.

A flexible budget performance report for variable manufacturing costs shows _______.

both the activity variances and the spending variances.

Most companies compute the materials price variance when raw materials are _______.

received from suppliers and transported to raw materials inventory.

The standard quantity allowed is _______.

the amount of an input that should have been used to complete the actual output for the period.

The standard hours allowed is ________.

the direct labor-hours that should have been used to complete the actual output for the period.

When computing variable manufacturing overhead variances, the standard rate represents the ________.

variable portion of the predetermined overhead rate.

Assume that direct labor-hours are used as the overhead allocation base. If the direct labor efficiency variance is unfavorable, the variable overhead efficiency variance ________.

will be unfavorable.