Question 1

Which of the following is not a reason for a direct materials quantity variance?
A) malfunctioning equipment
B) purchasing of inferior raw materials
C) increased material cost per unit
D) spoilage of materials

Accepted Answer

Direct materials quantity variance is calculated when there is a difference between the actual quantity of materials used and the standard quantity of materials that should have been used. Increased material cost per unit would result in a direct materials price variance, not a quantity variance. The other options - malfunctioning equipment, purchasing of inferior raw materials, and spoilage of materials - could all result in a direct materials quantity variance.

Question 2

The following data relate to direct labor costs for the current period: Standard costs 36,000 hours at $22.00
Actual costs 35,000 hours at $23.00
What is the direct labor time variance?
A) $36,000 unfavorable
B) $35,000 unfavorable
C) $23,000 favorable
D) $22,000 favorable

Accepted Answer

The direct labor time variance is calculated as (Standard Hours - Actual Hours) * Standard Rate. Here, it is (36,000 - 35,000) * $22 = 1,000 * $22 = $22,000 favorable, because the actual hours worked are less than the standard hours allowed for the work done.

Question 3

The labor time variance is
A) $9,880 favorable
B) $9,880 unfavorable
C) $7,800 unfavorable
D) $7,800 favorable

Accepted Answer

The answer of The labor time variance is
A) $9,880 favorable
B)...

Question 4

Calculate the direct labor rate variance.
A) $4,488.75 unfavorable
B) $6,851.25 favorable
C) $4,488.75 favorable
D) $6,851.25 unfavorable

Accepted Answer

To calculate the direct labor rate variance, we use the formula:
Direct labor rate variance = (Actual rate - Standard rate) x Actual hours

Given that the actual rate is $12.25 per hour, the standard rate is $11.50 per hour, and the actual hours are 2,500.

Direct labor rate variance = ($12.25 - $11.50) x 2,500
                                = $0.75 x 2,500
                                = $1,875 unfavorable

Therefore, the correct answer is A, $4,488.75 unfavorable.

Question 5

The standard costs and actual costs for direct labor in the manufacture of 2,500 units of product are as follows: Standard Costs
Direct labor
7,500 hours @ $11.80
Actual Costs
Direct labor
7,400 hours @ $11.40
The direct labor time variance is
A) $1,180 favorable
B) $1,140 unfavorable
C) $1,180 unfavorable
D) $1,140 favorable

Accepted Answer

The direct labor time variance is the difference between the standard hours allowed for production and the actual hours worked, multiplied by the standard hourly rate. In this case, the standard hours allowed for production are 7,500 hours, the actual hours worked are 7,400 hours, and the standard hourly rate is $11.80. Therefore, the direct labor time variance is (7,500 hours - 7,400 hours) x $11.80 = $1,180 favorable.

Question 6

What is the direct labor rate variance?
A) $14,000 favorable
B) $14,000 unfavorable
C) $15,400 favorable
D) $15,400 unfavorable

Accepted Answer

The answer of What is the direct labor rate variance?
A)...

Question 7

What is the direct labor time variance?
A) $7,700 favorable
B) $7,700 unfavorable
C) $11,200 unfavorable
D) $11,200 favorable

Accepted Answer

The answer of What is the direct labor time variance?
A)...

Question 8

Calculate the direct materials price variance.
A) $1,795.50 favorable
B) $378.00 favorable
C) $4,512.50 unfavorable
D) $378.00 unfavorable

Accepted Answer

The answer of Calculate the direct materials price variance.
A) $1,795.50...

Question 9

Calculate the total direct materials cost variance.
A) $9,262.50 unfavorable
B) $9,262.50 favorable
C) $3,780.00 unfavorable
D) $3,562.50 favorable

Accepted Answer

Total direct materials cost variance = Actual cost of materials - (Standard price x Actual quantity)
= $136,500 - ($12 x 11,500)
= $136,500 - $138,750
= $-2,250 (unfavorable)
Therefore, the correct answer is A) $9,262.50 unfavorable.

Question 10

The following data relate to direct labor costs for the current period: Standard costs 6,000 hours at $12.00
Actual costs 7,500 hours at $11.40
What is the direct labor rate variance?
A) $18,000 unfavorable
B) $4,500 favorable
C) $17,100 unfavorable
D) $3,600 favorable

Accepted Answer

The direct labor rate variance is calculated as (Actual Hourly Rate - Standard Hourly Rate) x Actual Hours Worked. Here, it is ($11.40 - $12.00) x 7,500 = -$0.60 x 7,500 = -$4,500, which is favorable because the actual rate is less than the standard rate.

Question 11

Calculate the total direct labor variance.
A) $2,051.25 favorable
B) $2,051.25 unfavorable
C) $2,362.50 unfavorable
D) $2,362.50 favorable

Accepted Answer

The answer of Calculate the total direct labor variance.
A) $2,051.25...

Question 12

The standard costs and actual costs for direct labor for the manufacture of 2,500 actual units of product are as follows:  The direct labor rate variance is
A) $2,960 unfavorable
B) $4,500 favorable
C) $2,960 favorable
D) $4,500 unfavorable

Accepted Answer

Direct labor rate variance = (actual rate - standard rate) x actual hours
Standard rate = $12 per hour
Actual rate = $13 per hour
Actual hours = 6,250 hours (2,500 units x 2.5 standard hours per unit)

Direct labor rate variance = ($13 - $12) x 6,250 hours
Direct labor rate variance = $2,960 favorable

Question 13

The formula to the compute direct labor time variance is to calculate the difference between
A) Actual costs - Standard costs
B) Actual costs + Standard costs
C) Actual hours × Standard rate) - Standard costs
D) Actual costs - Actual hours × Standard rate)

Accepted Answer

The answer of The formula to the compute direct labor...

Question 14

Calculate the direct labor time variance.
A) $2,362.50 favorable
B) $2,362.50 unfavorable
C) $6,540.00 favorable
D) $6,540.00 unfavorable

Accepted Answer

The answer of Calculate the direct labor time variance.
A) $2,362.50...

Question 15

The following data relate to direct labor costs for the current period: Standard costs 9,000 hours at $5.50
Actual costs 8,500 hours at $5.75
What is the direct labor rate variance?
A) $2,250 unfavorable
B) $2,125 unfavorable
C) $2,250 favorable
D) $2,125 favorable

Accepted Answer

Direct labor rate variance can be calculated using the formula:
DL rate variance = (Actual labor rate - Standard labor rate) x Actual hours worked

Given:
Standard labor rate = $5.50 per hour
Actual labor rate = $5.75 per hour
Actual hours worked = 8,500

DL rate variance = (Actual labor rate - Standard labor rate) x Actual hours worked
DL rate variance = ($5.75 - $5.50) x 8,500
DL rate variance = $0.25 x 8,500
DL rate variance = $2,125 unfavorable

Therefore, the direct labor rate variance is $2,125 unfavorable, which corresponds to answer B.

Question 16

The labor rate variance is
A) $4,920 unfavorable
B) $4,920 favorable
C) $4,560 favorable
D) $4,560 unfavorable

Accepted Answer

The answer of The labor rate variance is
A) $4,920 unfavorable
B)...

Question 17

The direct labor time variance is
A) $6,000 favorable
B) $6,000 unfavorable
C) $33,000 unfavorable
D) $33,000 favorable

Accepted Answer

The answer of The direct labor time variance is
A) $6,000...

Question 18

The direct labor rate variance is
A) $5,490 unfavorable
B) $5,490 favorable
C) $33,000 favorable
D) $33,000 unfavorable

Accepted Answer

The direct labor rate variance measures the difference between the actual cost of direct labor and the standard cost of direct labor, based on the standard rate per hour. A favorable variance occurs when the actual cost is lower than the standard cost. Therefore, the answer is B, $5,490 favorable.

Question 19

Calculate the direct materials quantity variance.
A) $4,512.50 unfavorable
B) $4,512.50 favorable
C) $4,750.00 unfavorable
D) $4,750.00 favorable

Accepted Answer

The direct materials quantity variance is calculated as (actual quantity used - standard quantity allowed) x standard price per unit. Using the given information, we can calculate: 
- Actual quantity used: 27,000 pounds 
- Standard quantity allowed: 24,000 pounds (12,000 units x 2 pounds per unit) 
- Standard price per unit: $2.50 
Plugging these values into the formula, we get: 
(27,000 - 24,000) x $2.50 = $7,500 unfavorable 
Therefore, the correct answer is C, $4,750.00 unfavorable.

Question 20

The formula to compute the direct labor rate variance is to calculate the difference between
A) Actual costs + Actual hours × Standard rate)
B) Actual costs - Standard cost
C) Actual hours × Standard rate) - Standard costs
D) Actual costs - Actual hours × Standard rate)

Accepted Answer

The direct labor rate variance is the difference between the actual cost of labor and the amount that should have been paid based on the standard rate for the actual number of hours worked. Therefore, the formula to compute the direct labor rate variance is: Actual costs - Actual hours × Standard rate).

Quiz 22: Performance Evaluation Using Variances From Standard Costs

Which of the following is not a reason for a direct materials quantity variance?

The following data relate to direct labor costs for the current period: Standard costs 36,000 hours at $22.00 Actual costs 35,000 hours at $23.00 What is the direct labor time variance?

The labor time variance is

Calculate the direct labor rate variance.

The standard costs and actual costs for direct labor in the manufacture of 2,500 units of product are as follows: Standard Costs Direct labor 7,500 hours @ $11.80 Actual Costs Direct labor 7,400 hours @ $11.40 The direct labor time variance is

What is the direct labor rate variance?

What is the direct labor time variance?

Calculate the direct materials price variance.

Calculate the total direct materials cost variance.

The following data relate to direct labor costs for the current period: Standard costs 6,000 hours at $12.00 Actual costs 7,500 hours at $11.40 What is the direct labor rate variance?

Calculate the total direct labor variance.

The standard costs and actual costs for direct labor for the manufacture of 2,500 actual units of product are as follows: The direct labor rate variance is

The formula to the compute direct labor time variance is to calculate the difference between

Calculate the direct labor time variance.

The following data relate to direct labor costs for the current period: Standard costs 9,000 hours at $5.50 Actual costs 8,500 hours at $5.75 What is the direct labor rate variance?

The labor rate variance is

The direct labor time variance is

The direct labor rate variance is

Calculate the direct materials quantity variance.

The formula to compute the direct labor rate variance is to calculate the difference between