ACCT: Chapter 10
The labor rate variance measures the productivity of direct labor.
False
The standard hours per unit includes both direct and indirect labor hours.
False
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.
actual; standard
The difference between the actual price paid for the material and what should have been paid according to the standard is reflected in the direct materials _______ variance.
price
Standards are ______.
set for each major production input or task benchmarks for measuring performance compared to the actual quantities and costs of inputs
A benchmark used in measuring performance is called a(n) _______.
standard
The amount of direct-labor hours that should be used to produce one unit of finished goods is the _______ hours per unit.
standard
The final, delivered price that should be paid for each unit of direct materials is the _______ price per unit of materials.
standard or budgeted
Material requirements plus an allowance for normal inefficiencies are added together to determine the _______ _______ per unit of output for direct materials.
standard quantity
An unfavorable materials quantity variance occurs when ______.
the actual amount of material used is greater than the standard amount of material allowed for the actual output
The calculation of a standard price per unit of direct materials includes ______.
shipping costs purchase discounts purchase price of the materials
The labor efficiency variance is the difference between actual hours used and standard hours allowed multiplied by the ______ hourly rate.
standard
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 quantity variance is $_______ _______.
$1050; 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 ______.
$4,125 U
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 ______.
$4,200 F
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 direct materials price variance is ______.
$600 F
Using the information provided, calculate the materials quantity variance.
$600 U SP(AQ-SQ) = $3.00(5,200 - 5,000) = $600 U
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 $_______ _______ .
$670; F
Which of the following are used to calculate the standard quantity per unit of direct materials?
Direct materials requirements per unit of finished product Allowance for waste and spoilage
Which of the following statements are true?
The production manager is usually responsible for the materials quantity variance. Material quantity variances due to inferior materials are the responsibility of the purchasing department.
Which of the following statements are true?
When actual results depart significantly from the standard, the reasons why should be investigated. Standards provide information for measuring performance.
The materials price variance is calculated using the ______.
actual quantity of the input purchased standard price of the input actual price of the input
The standard price per unit for direct materials ______.
can change based on a change in the delivery method
The difference between the actual hours used and the standard hours allowed for the actual output is used in the calculation of the labor _______ variance.
efficiency
When the actual hourly rate is lower than the standard hourly rate, the labor rate variance is _______.
favorable
When the actual quantity of materials used is less than the standard quantity allowed, the material quantity variance is labeled as _______.
favorable
When the standard price is higher than the actual price, the materials price variance is ______.
favorable
The materials price variance is ______.
generally the responsibility of the purchasing manager impacted by the delivery method chosen charged to the production manager when production problems occur
An unfavorable labor efficiency variance can result from ______.
insufficient product demand faulty equipment poorly motivated workers
Poor supervision is one possible cause of an unfavorable ______ variance.
labor efficiency
SR(AH - SH) is the formula for the ______ variance.
labor efficiency
When demand for a product is insufficient to keep all of the production workers busy and no layoffs occur, an unfavorable _______ _______ variance may occur.
labor efficiency
The labor efficiency variance is generally the responsibility of the ______ manager.
production
The materials quantity variance is generally the responsibility of the _______ department manager.
production or manufacturing
If poor-quality materials results in excessive labor processing time, the _______ manager will probably be held responsible for the labor efficiency variance.
purchasing
The materials price variance is generally the responsibility of the _______ department manager.
purchasing
SP(AQ-SQ) is the formula for the materials _______ variance.
quantity
The difference between the actual materials used in production and the standard amount allowed for the actual output is reflected in the materials _______ variance.
quantity
The difference between the standard and the actual direct labor wages per hour is reflected in the labor _______ variance.
rate
When the standard hourly rate is lower than the actual rate, the labor rate variance is ______.
unfavorable
When the standard purchase price is less than the actual price paid for materials, the material price variance is _______.
unfavorable
The standard price of the material is used in the calculation of the material quantity variance because ______.
using actual prices would hold the production manager responsible for the inefficiencies of the purchasing manager
The material quantity variance reflects the difference between the _______ quantity of materials used in production and the _______ quantity allowed for the actual output.
actual; standard
The materials price variance is the difference between the actual price of materials ______.
and the standard price for materials with the difference multiplied by the actual quantity of materials
