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Exam 23: Flexible Budgets and Standard Cost Systems

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Question 81

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The flexible budget variance is the difference between expected results in the flexible budget for the actual units sold and the static budget.

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Question 82

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What does the fixed overhead cost variance measure?

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The fixed overhead cost varian...

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Question 83

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What does the variable overhead efficiency variance measure?

When recording direct materials usage,what does an unfavorable direct materials efficiency variance represent? Will this variance have a debit or credit balance?

Under a standard cost system,the journal entry to record direct labor includes ________.

A cost variance measures the difference in quantities of actual inputs used and the standard quantity of inputs allowed for the actual number of units produced.

The static budget,at the beginning of the month,for Wadsworth Company follows: $\underline{\text{Static budget:}}$ Sales volume: 2000 units; Sales price: $50.00 per unit Variable costs: $14.00 per unit; Fixed costs: $25,100 per month Operating income: $46,900 $\underline{\text{Actual results, at the end of the month, follows:}}$ $\underline{\text{Actual results:}}$ Sales volume: 1900 units; Sales price: $58.00 per unit Variable costs: $16.5 per unit; Fixed costs: $34,000 per month Operating income: $44,850 Calculate the flexible budget variance for operating income.

-According to the above table.what is the total manufacturing overhead variance for the total product cost flexible budget variance?

Favorable and unfavorable variances are netted together in the same way debits and credits are.

SeaKist Marine Stores Company manufactures decorative fittings for luxury yachts,which require highly skilled labor,and special metallic materials.SeaKist uses standard costs to prepare its flexible budget.For the first quarter of 2016,direct materials and direct labor standards for one of their popular products were as follows: Direct materials: 1.5 pounds per unit; $4 per pound Labor: 2 hours per unit; $18 per hour During the first quarter,SeaKist produced 5,000 units of this product.At the end of the quarter,an examination of the direct materials records revealed that the company used 7,000 pounds of direct materials.The direct materials efficiency variance was $2,000 F.Which of the following is a logical explanation for this variance?

A favorable variance reflects a decrease in operating income.

A favorable flexible budget variance in sales revenue suggests a(n) ________.

Dixon,Inc.uses a standard cost system.On December 31,the last day of the accounting period,the account balances include the following: What is the net operating income on a standard cost income statement of the company for the year ended December 31?

Global Engineering's actual operating income for the current year is $58,000.The flexible budget operating income for actual sales volume is $39,000,while the static budget operating income is $53,000.What is the sales volume variance for operating income?

Which of the following is an example of a direct materials efficiency standard?

The following information relates to Tablerock Manufacturing's overhead costs for the month: $\begin{array}{|l|l|}\hline\text { Static budget variable overhead } & \$ 14,200 \\\hline \text { Static budget fixed overhead } & \$ 5,600 \\\hline \text { Static budget direct labor hours } & 1,000 \text { hours } \\\hline \text { Static budget number of units } & 5,000 \text { units }\\\hline\end{array}$ Tablerock allocates variable manufacturing overhead to production based on standard direct labor hours. Tablerock reported the following actual results for last month: actual variable overhead,$14,500; actual fixed overhead,$5,400; actual production of 4,700 units at 0.22 direct labor hours per unit.The standard direct labor time is 0.20 direct labor hours per unit. Compute the variable overhead cost variance.(Round intermediate calculations to two decimal places and the answer to the nearest dollar.)

Argosy Marine Stores Company manufactures special metallic materials and decorative fittings for luxury yachts that require highly skilled labor.Argosy uses standard costs to prepare its flexible budget.For the first quarter of the year,direct materials and direct labor standards for one of their popular products were as follows: Direct materials: 4 pounds per unit; $3 per pound Direct labor: 4 hours per unit; $17 per hour Argosy produced 5000 units during the quarter.At the end of the quarter,an examination of the labor costs records showed that the company used 21,000 direct labor hours and actual total direct labor costs were $380,000.The direct labor efficiency variance was $17,000 U.Which of the following is a logical explanation for this variance?

Managers should look at any variance that is significant.

A company is analyzing its month-end results by comparing it to both static and flexible budgets.During the month,the actual sales volume was lower than the expected sales volume as per the static budget.This difference results in an unfavorable ________.

What does the fixed overhead volume variance measure?