Chapter 9 Quiz
*The following labor standards have been established for a particular product:* *Standard labor-hours per unit of output: 9.3 hours Standard labor rate: $16.90 per hour* *The following data pertain to operations concerning the product for the last month:* *Actual hours worked: 9,900 hours* *Actual total labor cost: $164,340* *Actual output: 980 units* *What is the labor rate variance for the month?* a. $2,970 F b. $10,313 F c. $10,313 U d. $13,048 U
a. $2,970 F WORK: Labor rate variance = (Actual rate - Standard rate)*Actual hours = (164,340-9,900)*16.9 = 2,970 favorable
*The following materials standards have been established for a particular product:* *Standard quantity per unit of output: 5.0 meters* *Standard price: $17.80 per meter* The following data pertain to operations concerning the product for the last month: *Actual materials purchased: 8,000 meters* *Actual cost of materials purchase: $146,800* *Actual materials used in production: 7,500 meters* *Actual output: 1,460 units* *What is the materials price variance for the month?* a. $3,670 U b. $4,400 U c. $8,500 U d. $10,940 U
b. $4,400 U WORK: Materials Price Variance = (Standard price - Actual price)*Actual quantity = (17.80 - 146800/8000)*8000 = 4400 U
Spa Medical Clinic measures its activity in terms of patient-visits. Last month, the budgeted level of activity was 1,210 patient-visits and the actual level of activity was 1,200 patient-visits. The cost formula for administrative expenses is $4.50 per patient-visit plus $24,500 per month. The actual administrative expense was $23,800. Last month the clinic's spending variance for administrative expenses was: a. $2,470 F b. $6,100 F c. $45 F d.$6,145 F
b. $6,100 F WORK: Spending variance = Actual - Flexible budget = 23,800 - (24,500+(4.50*1200)) = 6,100 F
*An unfavorable materials quantity variance indicates that:* a. actual usage of materials is less than the standard material allowed for output. b. actual usage of material exceeds the standard material allowed for output. c. actual material price is less than the standard price. d. actual material price exceeds standard price.
b. actual usage of material exceeds the standard material allowed for output
*A budget that is based on the actual activity of a period is known as a:* a. static budget. b. flexible budget. c. continuous budget. d. master budget.
b. flexible budget.
*The following labor standards have been established for a particular product:* *Standard labor hours per unit of output 4.3 hours* *Standard labor rate $17.80 per hour* *The following data pertain to operations concerning the product for the last month:* *Actual hours worked 6,300 hours* *Actual total labor cost $ 112,770* *Actual output 1,400 units* *I. What is the labor rate variance for the month?* *II. What is the labor efficiency variance for the month?*
I. Labor variance rate= 630 U II. Labor efficiency variance= $4,984 U WORK: Actual rate of direct labor= Actual direct labor cost/Actual direct labor hours = 112,770/6,300 = $17.9 Labor variance rate = Actual hours*(Actual rate - Standard rate) = 6,300*(17.9 - 17.8) = 630 U Standard hours = Standard hours for 1 unit of output*Actual output = 4.3*1400 = 6,020 hours Labor efficiency rate = Standard rate*(Actual hours - Standard hours) = 17.8*(6,300-6,020) = $4,984
*The following standards have been established for a raw material used to make product O84:* Standard quantity of the material per unit of output: 9.1 meters Standard price of the material: $19.40 per meter *The following data pertain to a recent month's operations:* Actual material purchased: 5,400 meters Actual cost of material purchased: $109,620 Actual material used in production: 5,300 meters Actual output: 700 units of product O84 *The direct materials purchases variance is computed when the materials are purchased.* I. What is the materials price variance for the month? II. What is the materials quantity variance for the month?
I. Materials price variance = 4,860 U II. Materials quantity variance = $20,758 F WORK: Materials price variance = (Standard price - Actual price)*Actual quantity = (19.4-(109,620/5,400))*5,400 = 4,860 U Materials quantity variance = (Standard quantity-Actual quantity)*Standard price = ((700*9.1) - 5,300)*19.4 = $20,758 F
*College Hospital bases its budgets on patient-visits. The hospital's static or planning budget for August appears below:* Budgeted number of patient-visits: 8,600 Budgeted variable costs: Supplies (@$9.70 per patient-visit): $83,420 Laundry (@$9.40 per patient-visit): 80,840 Total variable cost: 164,260 Budgeted fixed costs: Wages and salaries: 99,810 Occupancy costs: 107,810 Total fixed cost: 207,620 Total cost: $371,880 *The total variable cost at the activity level of 8,700 patient-visits per month should be:* a. $209,950 b. $207,620 c. $166,170 d. $164,260
c. $166,170 WORK: Variable cost per patient visit = 162,260/8,600 = 19.10 per patient visit Total variable cost at 8,700 visits = 8,700*19.10 = $166,170
*The following labor standards have been established for a particular product:* *Standard labor-hours per unit of output: 9.8 hours* *Standard labor rate: $13.60 per hour* *The following data pertain to operations concerning the product for the last month:* *Actual hours worked: 7,600 hours* *Actual total labor cost: $100,320* *Actual output: 950 units* *What is the labor efficiency variance for the month?* a. $26,296 F b. $26,296 U c. $23,256 F d. $22,572 F
c. $23,256 F WORK: Direct labor efficiency variance = (Standard hours - Actual hours)*Standard rate = (9310-7600)*13.6 = 23,256 favorable NOTE: Standard hours = Standard labor-hours per unit of output*Actual output = 9.8*950 = 9310
*The following materials standards have been established for a particular product:* *Standard quantity per unit of output: 4.4 pounds* *Standard price: $13.20 per pound* *The following data pertain to operations concerning the product for the last month:* *Actual materials purchased: 4,800 pounds* *Actual cost of materials purchased: $62,880* *Actual materials used in production: 4,800 pounds* *Actual output: 700 units* *The direct materials purchases variance is computed when the materials are purchased.* *What is the materials price variance for the month?* a. $308 U b. $308 F c. $480 F d. $480 U
c. $480 F Materials Price Variance = (Standard price - Actual price)*Actual quantity = (13.2 - 62,880/4800)*4,800 = 480 favorable
*Dallas Snow Removal's cost formula for its vehicle operating cost is $2,060 per month plus $306 per snow-day. For the month of January, the company planned for activity of 16 snow-days, but the actual level of activity was 18 snow-days. The actual vehicle operating cost for the month was $7,720. The vehicle operating cost in the static or planning budget for January would be closest to:* a. $6,862 b. $7,568 c. $7,720 d. $6,956
d, 6,956 WORK:
*Dog Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During March, the kennel budgeted for 4,000 tenant-days, but its actual level of activity was 4,040 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March:* *Data used in budgeting:* *Fixed element per month; Variable element per tenant-day* Revenue - $34.90 Wages and salaries $2,900 $7.90 Food and supplies 1,900 14.40 Facility expenses 8,400 3.40 Administrative expenses 6,900 0.40 Total expenses $20,100 $26.10 *Actual results for March:* Revenue $131,231 Wages and salaries $28,590 Food and supplies $60,575 Facility expenses $21,800 Administrative expenses $7,099 *The revenue variance for March would be closest to:* a. $8,369 F b. $8,369 U c. $9,765 U d. $9,765 F
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