Managerial Accounting Ch 9

Which statement regarding variable overhead analysis is true

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

A labor rate variance is ______ when the standard hourly rate is lower than the actual rate

unfavorable

When the standard purchase price is less than the actual price paid for materials, the materials price variance is

unfavorable

When the actual quantity used is less than the standard quantity allowed, the material quantity variance is

favorable

Estimates of what revenues and costs should have been based on the actual level of activity are shown on the ___ budget

flexible

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

The calculation of a standard price per unit of direct materials include

purchase price of the materials shipping costs purchase discounts

A materials price variance is equivalent to a labor _____ variance and a materials quantity is equivalent to a labor ______ variance

rate, efficiency

The difference between actual results and the flexible budget amount is a

spending variance

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

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

standard quantity

The standard rate per hour indicates

the direct labor rate per hour fringe benefits employment taxes

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

standard

A price variance is the difference between the

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

The purchasing manager is generally responsible for the material ______ variance and the production manager is generally responsible for the materials ____ variance

price, quantity

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

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

-allowance for waste and spoilage -direct materials requirements per unit of finished product

An unfavorable labor efficiency variance can result from

-poorly motivated workers -faulty equipment -insufficient product demand

The standard hours per unit of an output includes

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

Fancy's nail monthly rent is 2500$. The company's static budget for March was based on the activity level of 2000 manicures. Total sales was budgeted at $40000 and nail tech wages was budgeted at $20000. Actual manicures in March totaled 2200. Assuming no other expenses, Fancy nails flexible budget will show

Net operating income of $19500 Sales of $44000

The materials price variance is calculated using the

actual price of the input standard price of the input actual quantity of the input purchased

When preparing a flexible budget, the level of activity

affects variable costs only

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

A quantity variance is

calculated using the standard price of the input

The standard price per unit for direct materials

can change based on a change in the delivery method

The materials price variance is

charged to the production manager when production problems occur generally the responsibility of the purchasing manager impacted by the delivery method chosen

Standards are

compared to the actual quantities and costs of inputs set for each major production input or task benchmarks for measuring performance

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

inefficient operation s obsolete goods high defect rates

The materials price variance is generally calculated at the time materials are purchased because

it allows materials to be carried in the inventory accounts at standard cost management can generate more timely variance reports it simplifies bookkeeping

Poor supervision is one possible cause of an unfavorable ___ variance

labor efficiency

SR(AH-SH) is the formula for the __ variance

labor efficiency

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

variable portion of the PDOH rate

To calculate a quantity variance, multiply the ___ quantity times the standard price and to compare it to the standard quantity allowed time the ____ price.

actual, standard

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 level of activity and the standard activity allowed for the actual output x the variable part of the predetermined overhead rate is the variable overhead

efficiency

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

standard

A benchmark used in measuring performance is called ____

standard

The difference between the standard and the actual direct labor hourly rates is reflected in the

labor rate variance

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

quantity standard