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Exam 23: Flexible Budgets and Standard Costs

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Question 91

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Clevenger Co.planned to produce and sell 30,000 units with a selling price of $10 per unit.Variable costs are expected to be $4 per unit and fixed costs are expected to be $80,000.Clevenger actually produced and sold 37,000 units. Using a contribution margin format: Prepare a flexible budget income statement for the actual level of sales and production.

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Question 92

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Use the following data to find the direct labor efficiency variance if the company produced 3,500 units during the period.

A) $6,125 unfavorable.
B) $7,000 unfavorable.
C) $7,000 favorable.
D) $12,250 favorable.
E) $6,125 favorablE.

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

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Question 93

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A budget based on several different levels of activity,often including both a best-case and worst-case scenario,is called a:

When standard costs are used,factory overhead is assigned to products with a predetermined standard overhead rate.

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

Georgia,Inc.has collected the following data on one of its products.The direct materials quantity variance is:

The following information comes from the records of Magno Co.for the current period. a.Compute the overhead controllable and volume variances.In each case,state whether the variance is favorable or unfavorable. b.Prepare the journal entries to charge overhead costs to work in process and the overhead 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

Which department is often responsible for the direct materials price variance?

A company's flexible budget for 30,000 units of production showed sales of $90,000,variable costs of $36,000,and fixed costs of $23,000.Prepare a flexible budget for 25,000 units assuming it is within the same relevant range of production.

When there is a difference between the actual volume of production and the standard volume of production,which of the following,based solely on fixed overhead,occurs:

The difference between actual price per unit of input and the standard price per unit of input results in a:

Based on predicted production of 12,000 units,a company anticipates $150,000 of fixed costs and $123,000 of variable costs.The flexible budget amounts of fixed and variable costs for 10,000 units are:

Hatter,Inc.allocates fixed overhead at a rate of $17 per direct labor hour.This amount is based on 90% of capacity or 3,600 direct labor hours for 6,000 units.During July,Hatter produced 5,500 units.Budgeted fixed overhead is $66,000,and overhead incurred was $67,000. Required: Determine the volume variance for July.

Direct materials variances are called price and quantity variances.However,when referring to direct labor,these variances are usually called _________________ and _____________ variances. Answers can appear in any order.

When the actual cost of direct materials used exceeds the standard cost,the company must have experienced an unfavorable direct materials price variance.

LJ Co.produces picture frames.It takes 3 hours of direct labor to produce a frame.LJ's standard labor cost is $11.00 per hour.During March,LJ produced 4,000 frames and used 12,400 hours at a total cost of $133,920.What is LJ's labor rate variance for March?

When recording the journal entry for labor,the Work in Process Inventory account is