ACCT Ch. 11

The Hanson Corporation employs a standard costing system. The following data are available for February: Actual direct labor-hours worked 6,500 hours Standard direct labor rate $ 8 per hour Labor rate variance $2,600 Favorable The actual direct labor rate for February is: $7.60 per hour $8.40 per hour $8.00 per hour $2.50 per hour

$7.60 per hour

A materials price variance is unfavorable if the actual price exceeds the standard price. True False

True

Waste on the production line will result in an unfavorable materials quantity variance. True False

True

In a company's standard costing system direct labor-hours are used as the base for applying variable manufacturing overhead costs. The standard direct labor rate is twice the variable overhead rate. Last period the labor efficiency variance was unfavorable. From this information one can conclude that last period the variable overhead efficiency variance was: a. unfavorable and half the labor efficiency variance. b. favorable and half the labor efficiency variance. c. unfavorable and twice the labor efficiency variance. d. favorable and twice the labor efficiency variance.

a. unfavorable and half the labor efficiency variance.

The Fischer Corporation uses a standard costing system. The following data have been assembled for December: Actual direct labor-hours worked 5,800 hours Standard direct labor rate $ 9 per hour Labor efficiency variance $1,800 unfavorable The standard hours allowed for December's production is: a. 5,400 hours b. 5,600 hours c. 5,800 hours d. 6,000 hours

b. 5,600 hours

Which of the following would produce a labor rate variance? a. Poor quality materials causing breakage and work interruptions. b. Use of persons with high hourly wage rates in tasks that call for low hourly wage rates. c. Excessive number of hours worked in completing a job. d. An unfavorable variable overhead rate variance.

b. Use of persons with high hourly wage rates in tasks that call for low hourly wage rates.

The variance that is usually most useful in assessing the performance of the purchasing department manager is: a. the materials quantity variance. b. the materials price variance. c. the labor rate variance. d. the labor efficiency variance.

b. the materials price variance.

Blue Corporation's standards call for 2,500 direct labor-hours to produce 1,000 units of product. During May 900 units were produced and the company worked 2,400 direct labor-hours. The standard hours allowed for May production would be: a. 2,500 hours b. 2,400 hours c. 2,250 hours d. 1,800 hours

c. 2,250 hours

Which of the following would produce a materials price variance? a. An excess quantity of materials used. b. An excess number of direct labor-hours worked in completing a job. c. Shipping materials to the plant by air freight rather than by truck. d. Breakage of materials in production.

c. Shipping materials to the plant by air freight rather than by truck.

Hien, Inc. uses machine-hours as the base to apply its manufacturing overhead. The following information relates to variable manufacturing overhead standards at Hien: Standard rate per machine-hour: $50 Total standard machine-hours allowed for units produced during September: 4,000 Hien's variable overhead rate variance for September was $800 favorable. Its variable overhead efficiency variance was $3,600 unfavorable. How many machine-hours did Hien actually use during September? a. 3,928 b. 3,944 c. 4,056 d. 4,072

d. 4072

A direct materials quantity standard generally includes an allowance for waste. True False

true

The materials price variance is computed by multiplying the difference between the actual price and the standard price by the actual quantity of materials purchased. True False

true