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Exam 21: Flexible Budgets and Standard Costs

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Question 21

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

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cost variances; pric...

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Question 22

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Based on predicted production of 25,000 units,Best Co.anticipates $175,000 of fixed costs and $137,500 of variable costs.What are the flexible budget amounts of total costs for 20,000 and 30,000 units?

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Variable costs = $137,500/25,0...

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Question 23

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A cost variance is the difference between actual cost and standard cost.

______________________ are preset costs for delivering a product or service under normal conditions.

Reference: 21_09 This information comes from the records of Dina Co. for the current period: Factory overhead (based on budgeted production of 24,500 units) Variable overhead $2.25/direct labor hour Fixed overhead $1.95/direct labor hour -Make the necessary general journal entries to record the above standard and actual costs,and all variances.

Use the following data to find the direct labor efficiency variance. $\begin{array}{ll}\text { Direct labor standard (4 hrs. @ } & \text { \$28 per unit } \\\text { \$7/hr.) } & \\\text { Actual hours worked per unit } & \text { 3.5 hours } \\\text { Actual units produced } & 3,500 \text { units } \\\text { Actual rate per hour } & \$ 7.50\end{array}$

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

If actual price per unit of materials is greater than the standard price per unit of materials,the direct materials price variance is _______________________.

The difference between actual and standard cost caused by the difference between the actual price and the standard price is called the:

Reference: 21_04 A company has established 5 pounds of Material M at $2 per pound as the standard for the material in its Product A. The company has just produced 1,000 units of this product, using 5,200 pounds of Material M that cost $9,880. -The direct materials quantity variance is:

Briefly describe the procedure of management by exception.

Define standard costs.How do they assist management?

Reference: 21_05 A job was budgeted to require three hours of labor per unit at $8 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?

Reference: 21_03 Bradford Company budgeted 4,000 pounds of material costing $5 per pound to produce 2,000 units. The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units. -What is the direct materials quantity variance?

A company had a $22,000 favorable direct labor efficiency variance during a time period when the standard rate per direct labor hour was $22 and the actual rate per direct labor hour was $21.If the standard direct labor hours allowed for production were 5,000 what is the amount of actual direct labor cost during this period?

Should both favorable and unfavorable variances be investigated,or only the unfavorable ones? Explain.

When standard manufacturing costs are recorded in the accounts and the cost variances are immaterial at the end of the accounting period,the cost variances should be:

Reference: 21_06 The following information describes a company's use of direct labor in a recent period: $\begin{array}{llr} \text { Actual hours used} &45,000\\ \text { Actual rate per hour} &\$15\\ \text { Standard rate per hour} &\$14\\ \text { Standard hours for units produced} &47,000\\\end{array}$ -The direct labor efficiency variance is:

A company had a $22,000 favorable direct labor efficiency variance during a time period when the standard rate per direct labor hour was $22 and the actual rate per direct labor hour was $21.If the standard direct labor hours allowed for production were 5,000,what is the amount of actual direct labor hours worked during this period?

Standard costs can serve as a basis for evaluating actual performance.