242 - Chapter 10

variance is calculated use the:

-Actual quantity of the input purchased -Standard price of the input -Actual price of the input

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

Unfavorable labor rate variances may occur as a result of:

-Overtime premiums being charged to the direct labor account -Skilled workers being assigned to jobs requiring little skill

Unfavorable labor rate variances may occur as a result of:

-Skilled workers being assigned to jobs requiring little skill -Overtime premiums being chard to the direct labor account

The standard rate per hour includes:

-The direct labor rate per hour -Fringe benefits -Employment taxes

Material requirements plus an allowance for normal inefficiencies are added together to determine the _____ _____ of a direct material per unit of output

Standard, Quantity

Most companies compute the material price variance when materials are _____ and the material quantity variance when materials are _____

purchased, used

How much input should be used to produce a product or provide a serve is a(n) _______standard

quantity

Price Variance Formula

AQ(AP-SP)

Spending Variance

(Total direct labor cost / planning budget units to be produced) x Actual Production = flexible budget amount - actual = answer

Activity Variance

(Total direct labor cost / planning budget units to be produced) x Actual Production = flexible budget amount - planning budget= answer

Labor Rate variance:

AH(AR-SR)

To calculate a price variance, multiply the ________ quantity times the actual price and compare it to the actual quantity times the ______ price

Actual, Standard.....(for materials price variance also actual quantity of the input purchased

The material quantity variance reflects the difference between the ______ quantity of materials used in production and the _______ quantity allowed for the actual out put

Actual, standard

A quantity variance is:

Calculated using the standard price of the input

The standard price per unit of direct materials

Can change based on a change in the delivery method...The standard price reflects the final, delivered cost of materials

The variable overhead _____ variance measures activity differences and the variable overhead ____ variance measures cost differences

Efficiency, rate

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 difference between the standard and the actual direct labor hourly rates is reflected in the ______ + ______ variance

Labor, rate

Standard costs are a key element in the ______ by _____ approach utilized by some companies.

Management, Exception

The purchasing manger is generally responsible for the material _________ variance, and the production manager is generally responsible for the material ________variance

Price, Quantity

The materials price variance is generally the responsibility of the _______ department manager

Purchasing

Materials Quantity variance

SP(AQ-SQ)

Labor efficiency formula

SR(AH-SH)

Labor efficiency variance:

SR(Standard hours allowed-actual hours used)

How much should be paid for an input is indicated by a price ______

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

When the actual cost incurred exceeds the standard cost allowed for the actual level of output, the spending variance is:

Unfavorable

The standard cost for______ manufacturing overhead is computed the same way as the standard cost for direct labor

Variable

The materials price variance is calculated using the:

-Actual price of the input -Actual quantity of the input purchased -Standard price of the input