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
