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Exam 23: Flexible Budgets and Standard Costs

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Question 21

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Cabot Company collected the following data regarding production of one of its products.Compute the direct labor cost variance.

A) $53,500 unfavorable.
B) $40,500 favorable.
C) $53,500 favorable.
D) $13,000 unfavorable.
E) $40,500 unfavorable.

F) A) and E)
G) A) and D)

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Question 22

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Variable budget is another name for:

A) Cash budget.
B) Flexible budget.
C) Fixed budget.
D) Manufacturing budget.
E) Rolling budget.

F) A) and D)
G) B) and D)

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Question 23

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Chips Co.assigned direct labor cost to its products in May for 1,300 standard hours of direct labor at the standard $8 per hour rate.The direct labor rate variance for the month was $200 favorable and the direct labor efficiency variance was $150 favorable.Prepare the journal entry to charge Goods in Process Inventory for the standard labor cost of the goods manufactured in May and to record the direct labor variances.Assuming that the direct labor variances are immaterial,prepare the journal entry that Chips would make to close the variance accounts.

The difference between the actual sales and the flexible budget sales is called the ______________________ variance.

The amounts in a flexible budget are based on one expected level of sales or production.

A flexible budget is also called a _______________ budget.

Companies promoting continuous improvement strive to achieve _____________ standards by eliminating inefficiencies and waste.

A company's flexible budget for 60,000 units of production showed sales of $96,000,variable costs of $36,000,and fixed costs of $26,000.What operating income would be expected if the company produces and sells 70,000 units?

A company's flexible budget for 10,000 units of production reflects sales of $200,000; variable costs of $40,000; and fixed costs of $75,000.Calculate the expected level of operating income if the company produces and sells 13,000 units.

The standard materials cost to produce 1 unit of Product M is 6 pounds of material at a standard price of $50 per pound.In manufacturing 8,000 units,47,000 pounds of material were used at a cost of $51 per pound.What is the total direct materials cost variance?

Standard costs are used in the calculation of:

Standard costs are:

The following information comes from the records of Dina Co.for the current period. a.Compute the direct materials price and quantity variances,direct labor rate and efficiency variances and state whether the variance is favorable or unfavorable. b.Prepare the journal entries to charge direct materials and direct labor costs to goods in process and the materials and labor variances to their proper accounts. Factory overhead (based on budgeted production of 24,500 units) Variable overhead $2.25/direct labor hour Fixed overhead $1.95/direct labor hour

Direct materials variances are called price and quantity variances.However,when referring to direct labor,these variances are usually called _________________ and _____________ variances.

The sum of the variable overhead spending variance,the variable overhead efficiency variance,and the fixed overhead spending variance is the:

Differences between actual costs and standard costs are known as _______________.These differences may be subdivided into ______________ and _________________.

Gates Company reports the following information regarding the production on one of its products for the month.Compute the direct labor cost variance,the direct labor rate variance,the direct labor efficiency variance and identify each as either favorable or unfavorable.

A process of examining the differences between actual and budgeted costs and describing them in terms of the amounts that resulted from price and quantity differences is called:

A job was budgeted to require 3 hours of labor per unit at $8.00 per hour.The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000.What is the total labor cost variance?

The sum of the variable overhead spending variance,the variable overhead efficiency variance,the fixed overhead spending variance is the ____________________________.