learn smart chapter 11

the standard quantity allowed for production equals:

actual output x standard quantity

direct labor variances:

are computed in the same way as material variances; material variances use the terms "quantity and price" and labor variances use the terms "hours and rate"

poor supervision is one possible cause of an unfavorable ________ variance

labor efficiency

how much should be paid for each unit of an input is specified by a ________ standard

price

the purchasing manager is generally responsible for the material ______ variance, and the production manager is generally responsible for the material ________ variance

price; quantity

the labor efficiency variance is generally the responsibility of the _______ manager

production

the materials price variance is computed when materials are _______ and the materials quantity variance is computed when materials are ______

purchased; used

How much input should be used to produce a product or provide a service is a _____ standard.

quantity

one approach to developing the _______ ______ per unit is to have an industrial engineer do a time and motion study

standard hours

a price variance is the difference between the

the actual price and the standard price multiplied by the actual amount of the input.

which of the following statements is true?

the variable part of manufacturing overhead is analyzed using the same basic formulas used for materials and labor

T or F the variable overhead rate variance uses the same basic formula as the labor rate variance except that the variable rates are used instead of the direct labor rates

true

when the standard purchase price is less than the actual price, the material price variance is __.

unfavorable

the standard cost for ______ MOH is computed the same way as the standard cost for direct labor

variable

the difference between the actual hours used and the standard hours allowed for the actual output is the

labor efficiency variance

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?

-how production supervisors use direct labor workers can lead to labor rate variances -overtime premiums can cause an unfavorable labor rate variance

excessive inventory on hand, especially in the work in process inventory account, may lead to:

-inefficient operations -high defect rates -obsolete goods

labor efficiency variance

SR(AH-SH)

direct material standards:

- should be based on input from production and purchasing managers. - are based on standard price and quantity.

which statement regarding variable overhead variance analysis is true?

- the variable overhead efficiency variance may depend on the efficiency of direct labor

the material 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

standard rate per hour

company's expected direct labor wage rate per hour, including employment taxes and fringe benefits

the standard quantity or hours and the standard price or rate required to produce a unit of a specific product is shown on a standard _______ ________

cost card

the variable overhead _______ variance measures activity differences and the variable overhead ____ variance measures cost differences

efficiency; rate

the difference between the standard and the actual direct labor rates is the

labor rate variance

standard costs are a key element in the__________ by ________________ approach utilized by some companies

management by exception

the standard labor rate per hour

reflects the expected mix of workers

The amount of an input that should have been used to produce the actual output is known as the _____ quantity or hours allowed.

standard