LearnSmart Chapter 11

The standard rate per hour includes:

the direct labor rate per hour, fringe benefits, & employment taxes

The standard hours per unit of an output includes:

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

The direct material spending variance:

needs to be decomposed for analysis, can be broken down into the quantity variance and the price variance, & explains what was spent on materials and what should have been spent.

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

quantity

The materials price variance is calculated using the:

standard price of the input, actual quantity of the input purchased, & actual price of the input.

The difference between the standard and the actual direct labor rates is the:

labor rate variance

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

purchased; used

How much materials should have cost is actual materials used had been purchased at the standard price is the direct materials ______ variance.

spending

A benchmark used in measuring performance is called a(n) ______.

standard

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

standard

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

standard

The final, delivered price that should be paid for each unit of direct materials is the ______ price per unit of materials.

standard

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.

If the actual level of activity is greater than the planned level of activity, the activity variances will be:

unfavorable

The materials price variance is calculated using the _____ quantity of the input purchased.

actual

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

actual; standard

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

Standards are:

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

A materials price variance is ______ when the standard price is higher than the actual price.

favorable

When the actual quantity of materials used is less than the standard quantity allowed, the material quantity variance is labeled as:

favorable

The difference between the actual hours used and the standard hours allowed for the actual output is the:

labor efficiency variance