CH 9
Standards are Blank______.
compared to the actual quantities and costs of inputs benchmarks for measuring performance set for each major production input or task
A revenue variance is the ______.
difference between the actual total revenue and what the total revenue should have been, given the actual level of activity for the period
The volume variance is the Blank______.
error that occurs when the level of activity is estimated incorrectly
When the standard purchase price is less than the actual price paid for materials, the material price variance is . (Enter only one word per blank.)
unfavorable
The standard price of materials is $4.10 per pound and the standard quantity allowed for actual output is 5,800 pounds. If the actual quantity purchased and used was 6,000 pounds, and the actual price per pound was $4.00, the materials price variance is Blank______.
$600 F
If the planned budget revenue for 5,000 units is $120,000, the flexible budget revenue for 4,500 units is Blank______.
108,000
The standard price of materials is $3.50 per pound and the standard quantity allowed for actual output is 7,000 pounds. If the actual quantity purchased and used was 6,700 pounds, and the actual price per pound was $3.40, the materials quantity variance is $____ ____. (Enter the variance as a whole number and specify if it is F or U.)
Blank 1: 1050 or 1,050 Blank 2: F, Favorable, or Favourable
The material quantity variance measures the difference between the ____ quantity of materials used in production and the ____ quantity of materials allowed for the actual output, multiplied by the standard price per unit of materials. (Enter only one word per blank.)
Blank 1: actual Blank 2: standard
The variable overhead efficiency variance compares the ____ hours times the standard rate with the standard hours allowed for the actual output times the ____ rate. (Enter either actual or standard in each blank.)
Blank 1: actual Blank 2: standard
AH(AR - SR) is the formula for the variable overhead ____ variance. (Enter only one word per blank.)
Blank 1: rate
The difference between the actual total revenue and what the total revenue should have been, given the actual level of activity for the period is called a(n) variance ____. (Enter only one word per blank.)
Blank 1: revenue or sales
The over or under applied overhead equals the sum of the overhead variances when using a(n) ____ cost system. (Enter only one word per blank.)
Blank 1: standard
True or false: A static budget is being compared to actual activity. The variance is F for net income but U for most expenses. This suggests that actual activity was lower than budgeted.
False
In a standard cost system overhead is applied using the standard hours allowed for the actual production.
True
When the standard price is higher than the actual price, the materials price variance is Blank______.
favorable
SR(AH - SH) is the formula for the Blank______ variance.
labor efficiency
When comparing the static planning budget to actual activity, a problem that arises when actual activity is higher than budgeted activity is that Blank______.
net income is higher than expected but all or most expense variances are unfavorable
The fixed component of the predetermined overhead rate x (Denominator hours - the standard hours allowed for the actual output) equals the ____ variance. (Enter only one word per blank.)
Blank 1: volume
When the standard hours allowed are lower than the actual hours used, the labor efficiency variance is Blank______.
unfavorable
Budgeted fixed overhead - Fixed overhead applied to work in process is the calculation of the ____ variance. (Enter only one word per blank.)
volume
A budget that takes into account how costs are affected by changes in level of activity is a(n) ____ budget. (Enter only one word per blank.)
Blank 1: flexible or flex
Comparing actual costs to what the costs should have been for the actual level of activity is done on a(n) ____ budget. (Enter only one word per blank.)
Blank 1: flexible or flex
Dividing the estimated total manufacturing overhead cost by the estimated total amount of the allocation base is the calculation of the ____ ____ rate. (Enter only one word per blank.)
Blank 1: predetermined Blank 2: overhead
SP(AQ-SQ) is the formula for the materials ____ variance. (Enter only one word per blank.)
Blank 1: quantity
The materials price variance is the difference between the actual price of materials Blank______.
and the standard price for materials with the difference multiplied by the actual quantity of materials
The volume variance is the difference between Blank______ fixed overhead.
budgeted and applied
Volume variance = Blank______. Multiple choice question.
budgeted fixed overhead - fixed overhead applied to work in process
A spending variance is the ______.
difference between the actual amount of the cost and how much a cost should have been, given the actual level of activity
(Actual cost per unit - standard cost per unit) × actual quantity = the materials ____ variance. (Enter only one word per blank.)
price
A benchmark used in measuring performance is called a(n) ____. (Enter only one word per blank.)
Blank 1: standard, norm, or metric
When the costing system assumes fixed costs behave as if they are variable, a(n) ____ variance occurs. (Enter only one word per blank.)
Blank 1: volume
Planning budgets are sometimes called Blank______ budgets.
static
An unfavorable materials quantity variance occurs when Blank______.
the actual amount of material used is greater than the standard amount of material allowed for the actual output
The standard price of materials is $3.50 per pound and the standard quantity allowed for actual output is 7,000 pounds. If the actual quantity purchased and used was 6,700 pounds, and the actual price per pound was $3.40, the direct materials price variance is $____ ____ . (Enter the variance as a whole number and specify if it is F or U.)
Blank 1: 670 Blank 2: F, Favorable, or Favourable
The difference between the actual fixed overhead and the planned fixed overhead is called the ____ variance. (Enter only one word per blank.)
budget
The calculation of the budget variance uses Blank______ overhead.
budgeted fixed actual fixed
Fancy Nail's monthly rent is $2,500. The company's static budget for March was based on the activity level of 2,000 manicures. Total sales was budgeted at $40,000 and nail technician wages (a variable cost based on the number of manicures) was budgeted at $20,000. Actual manicures in March totaled 2,200. Assuming no other expenses, Fancy Nails' flexible budget will show Blank______.
net operating income of $19,500 sales of $44,000
In a standard costing system, variable and fixed overhead are applied to production using the Blank______ hours allowed for the Blank______ production.
standard, actual
When budgeted fixed overhead cost exceeds fixed overhead applied to work in process, the volume variance is labeled ____. (Enter either favorable or unfavorable.)
unfavorable
When the standard hourly rate is lower than the actual rate, the labor rate variance is Blank______.
unfavorable
Based on the following information, the amount of overhead applied when using a standard cost system equals $ . (Enter your answer as a whole number.) Budgeted variable overhead $100,000 Budgeted fixed overhead $50,000 Estimated total machine-hours 20,000 Standard machine-hours for actual production 18,000 Actual machine-hours used 17,500
135000
When budgeted fixed overhead cost is less than fixed overhead applied to work in process, the volume variance is labeled ____. (Enter either favorable or unfavorable.)
Blank 1: favorable, favourable, or F
When fewer hours are worked than the standard hours allows, the labor efficiency variance is . (Enter only one word per blank.)
Blank 1: favorable, favourable, or F
When the actual quantity of materials used is less than the standard quantity allowed, the material quantity variance is labeled as ____. (Enter only one word per blank.)
Blank 1: favorable, favourable, or F
The difference between how much a cost should have been, given the actual level of activity, and the actual amount of the cost is a(n) ____ variance. (Enter only one word per blank.)
Blank 1: spending
When calculating the labor rate variance, multiply the actual hours worked with the ____ labor rate and subtract this figure from the product of the actual hours worked and the ____ labor rate. (Enter only one word per blank.)
Blank 1: standard Blank 2: actual
When using a standard cost system, the over or under applied overhead equals the sum of the overhead ____ for the period. (Enter only one word per blank.)
Blank 1: variances or variance
When the actual hourly rate is lower than the standard hourly rate, the labor rate variance is . (Enter either favorable or unfavorable.)
Blank 1: favorable, favourable , or F
The difference between the actual amount of materials used in production and the standard amount of materials allowed for the actual output, multiplied by the standard price per unit of materials is the materials variance. (Enter only one word per blank.)
Blank 1: quantity or usage
When actual fixed overhead cost exceeds budgeted fixed overhead cost, the budget variance is labeled ____. (Enter either favorable or unfavorable.)
Blank 1: unfavorable, unfavourable, or U
A company's fixed component of the predetermined overhead rate was $4.50 per machine hour based on 40,000 denominator hours. A total of 38,000 actual hours were used and 43,000 standard hours were allowed for the actual output. The volume variance is $ Blank______.
$13,500 F
Given on the following information, calculate the variable overhead rate variance. Actual variable overhead cost $15,500; Actual hours used 4,200; Standard hours allowed 4,000; and Standard variable overhead rate $3.75 per hour.
$250 F
Actual hours used 5,500; Standard hours allowed 5,800; Actual labor rate $14.75 per hour; and Standard labor rate $14.00 per hour. The labor rate variance is Blank______.
$4,125 U
A budget that is prepared at the beginning of the period for a specific level of activity is called a Blank______ budget.
planning
Actual hours used 5,500; Standard hours allowed 5,800; Actual labor rate $14.75 per hour; and Standard labor rate $14.00 per hour. The labor efficiency variance is Blank______.
$4,200 F
If the activity level for the month is 4,000 units, actual revenue is $6,000, actual variable costs are $0.20 unit, and actual fixed costs total $500, which of the following are true?
$4,700 net income $1,300 in total costs
The planning budget, based on 1,000 units, shows revenue of $24,000 and $6,250 for supplies. A total of 1,200 units were actually produced and sold. The flexible budget will show Blank______.
$7,500 for supplies $28,800 revenue