Accounting 204-Chapter 10

SP(AQ-SQ) is the formula for the materials_________variance.

quantity

True or false: A favorable labor rate variance is always favorable for a company.

False

How much input should be used to produce a product or provide a service is a(n)______ standard.

Quantity

The amount of direct-labor hours that should be used to produce one unit of finished goods is the _____ hours per unit.

Standard

The standard rate per unit that a company expects to pay for variable overhead equals the

variable portion of the predetermined overhead rate

Which of the following are used to calculate the standard quantity per unit of direct materials?

Allowance for normal scrap and spoilage. Direct materials requirements per unit of finished product.

The materials quantity variance is generally the responsibility of the ________ department manager.

production

The difference between actual results and the flexible budget amount is a(n) ___________ variance.

spending

A planning budget called for 500 units to be produced and total direct labor cost of $7,500. Actual production was 600 units and actual direct labor cost was $9,300. The spending variance is_________.

$300 U

The spending variance is Blank______.

(AQ*AP)-(SQ*SP)

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.

A quantity variance is________.

calculated using the standard price of the input

Poor supervision is one possible cause of an unfavorable ________ ____________ variance.

labor efficiency

he purchasing manager is generally responsible for the material ______variance, and the production manager is generally responsible for the material _______ variance.

price then quantity

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

$4200 F

T or F: The standard hours per unit includes both direct and indirect labor hours.

False

T or F:All materials variances are generally the responsibility of the production manager.

False

T or F:Quantity standards refer to the price to be paid for each unit of the input.

False

When the actual cost incurred exceeds the standard cost allowed for the actual level of output, the spending variance is___________.

Unfavorable

A price variance is the difference between the______.

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

To calculate a price variance, multiply the ______quantity times the actual price and compare it to the actual quantity times _______the price.

actual then standard

The standard hours per unit of an output includes

an allowance for cleanup and downtime the estimated time to complete the unit

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

The difference between the standard and the actual direct labor wages per hour is reflected in the labor____ variance

rate

A materials price variance is equivalent to a labor ________ variance, and a materials quantity variance is equivalent to a labor_________ variance.

rate then efficiency

The difference between the actual amount of an input used and the amount that should have been used, stated in dollar terms using the standard price of the input, is called a(n)________ variance.

Quantity

Material requirements plus an allowance for normal inefficiencies are added together to determine the _______ _______ per unit.

Standard Quantity

The standard rate per unit that a company expects to pay for variable overhead equals the_________.

Variable portion of the predetermined overhead rate.

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

If managers consider it unwise to adjust the workforce in response to changes in workload Blank______. Multiple choice question.

the direct labor workforce is really fixed in the short run

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

variable

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 $___F

670 F

(Actual cost per unit - standard cost per unit) × actual quantity = the materials ______variance.

price