Question 1

The following labor standards have been established for a particular product:  The following data pertain to operations concerning the product for the last month:
 What is the labor efficiency variance for the month?

Accepted Answer

The answer of The following labor standards have been established...

Question 2

Zanny Electronics Corporation uses a standard cost system for the production of its water ski radios. The direct labor standard for each radio is 0.9 hours. The standard direct labor cost per hour is $7.20. During the month of August, Zanny's water ski radio production used 6,600 direct labor-hours at a total direct labor cost of $48,708. This resulted in production of 6,900 water ski radios for August. What is Zanny's labor rate variance for August?

Accepted Answer

The labor rate variance is calculated as (Actual Hourly Rate - Standard Hourly Rate) x Actual Hours Worked. The actual hourly rate is $48,708 / 6,600 hours = $7.38. The standard rate is $7.20. Thus, the variance is ($7.38 - $7.20) x 6,600 = $0.18 x 6,600 = $1,188 Unfavorable.

Question 3

The following labor standards have been established for a particular product:  The following data pertain to operations concerning the product for the last month:
 What is the labor rate variance for the month?

Accepted Answer

The answer of The following labor standards have been established...

Question 4

The following labor standards have been established for a particular product:  The following data pertain to operations concerning the product for the last month:
 What is the labor rate variance for the month?

Accepted Answer

The answer of The following labor standards have been established...

Question 5

The following information relates to the direct labor at Padmaja Manufacturing, Incorporated for March:  During March, Padmaja produced 2,100 units. What is Padmaja's labor efficiency variance for March?

Accepted Answer

The answer of The following information relates to the direct...

Question 6

The direct labor standards for a particular product are 4 hours of direct labor at $12.00 per direct labor-hour = $48.00. During October, 3,350 units of this product were made, which was 150 units less than budgeted. The labor cost incurred was $159,786 and 13,450 direct labor-hours were worked. The direct labor variances for the month were:

Accepted Answer

The answer of The direct labor standards for a particular...

Question 7

The following standards for variable manufacturing overhead have been established for a company that makes only one product:  The following data pertain to operations for the last month:
 What is the variable overhead efficiency variance for the month?

Accepted Answer

Variable Overhead Efficiency Variance = (Standard Hours - Actual Hours) x Variable Overhead Rate 
Standard Hours = 35,000 (based on the standard rate of 10 hours per unit for 3,500 units) 
Actual Hours = 37,000 
Variable Overhead Rate = $4.00 
Variance = (35,000 - 37,000) x $4.00 = $15,200 unfavorable.

Question 8

Viger Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company has provided the following data for the most recent month:  What was the variable overhead rate variance for the month?

Accepted Answer

The answer of Viger Corporation has a standard cost system...

Question 9

Information on Westcott Corporation's direct labor costs for a recent month follows:  What were the actual hours worked during the month, rounded to the nearest hour?

Accepted Answer

The answer of Information on Westcott Corporation's direct labor costs...

Question 10

Pleiss Corporation applies manufacturing overhead to products on the basis of standard machine-hours. The company's standard variable manufacturing overhead rate is $2.40 per machine-hour. The actual variable manufacturing overhead cost for the month was $5,240. The original budget for the month was based on 2,100 machine-hours. The company actually worked 2,270 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 2,280 machine-hours. What was the variable overhead efficiency variance for the month?

Accepted Answer

The answer of Pleiss Corporation applies manufacturing overhead to products...

Question 11

Viger Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company has provided the following data for the most recent month:  What was the variable overhead rate variance for the month?

Accepted Answer

The answer of Viger Corporation has a standard cost system...

Question 12

The Fime Corporation uses a standard costing system. The following data have been assembled for December:  The standard hours allowed for December's production is:

Accepted Answer

The answer of The Fime Corporation uses a standard costing...

Question 13

Piper Corporation's standards call for 1,000 direct labor-hours to produce 250 units of product. During October the company worked 1,250 direct labor-hours and produced 300 units. The standard hours allowed for October would be:

Accepted Answer

The standard hours allowed can be calculated using the formula: 
Standard hours allowed = (Actual output / Standard output) x Standard direct labor hours
Standard output = (Direct labor-hours required to produce standard output / Standard output quantity) x Actual output quantity

Given:
Standard output quantity = 250 units
Direct labor-hours required to produce standard output = 1,000 hours
Actual output = 300 units
Actual direct labor-hours = 1,250 hours

Using the above formulae we get, 
Standard output = (1000 / 250) x 300 = 1200 units
Standard hours allowed = (300/1200) x 1000 = 250 x 4 = 1200 hours

Hence, the answer is C.

Question 14

Elliott Corporation makes and sells a single product. Last period the company's labor rate variance was $14,400 Unfavorable. During the period, the company worked 36,000 actual direct labor-hours at an actual cost of $338,400. The standard labor rate for the product in dollars per hour is:

Accepted Answer

The answer of Elliott Corporation makes and sells a single...

Question 15

The Fime Corporation uses a standard costing system. The following data have been assembled for December:  The standard hours allowed for December's production is:

Accepted Answer

Standard cost per unit of product = $40 per hour x 0.4 hour per unit = $16 per unit
Actual production = 1,400 units
Standard cost per unit x actual production = $16 x 1,400 = $22,400
Actual cost of labor for December = $23,130
Variances:
Labor rate variance = ($23,130 - (1,500 x $15)) = $630 U
Labor efficiency variance = (1,400 units x 0.4 hour per unit) - actual hours worked = 100 hours U
Total labor variance = $630 U + 100 hours U x $40 per hour = $7,630 U

To calculate the standard hours allowed, we need to add the actual hours worked to the labor efficiency variance:
Actual hours worked + labor efficiency variance = 4,500 + 100 = 4,600 hours
Therefore, the standard hours allowed for December's production is 5,400 hours (4,600 actual hours worked + 800 labor efficiency variance hours).

Question 16

Krizun Industries makes heavy construction equipment. The standard for a particular crane calls for 20 direct labor-hours at $16 per direct labor-hour. During a recent period1,300 cranes were made. The labor efficiency variance was $5,200 Unfavorable. How many actual direct labor-hours were worked?

Accepted Answer

Labor efficiency variance = (Standard hours for actual output - Actual hours worked) x standard labor rate.

Given:
Standard hours per unit = 20 hours
Standard labor rate = $16 per hour
Total output = 1,300 units
Labor efficiency variance = $5,200 unfavorable

Let Actual hours worked be X

$5,200 = (20 x 1,300 - X) x $16
$5,200 = (26,000 - X) x $16
$5,200/$16 = 325 = 26,000 - X
X = 26,000 - 325
X = 25,675 hours

Therefore, the actual direct labor-hours worked were 26,325 hours (Option C)

Question 17

At Eady Corporation, maintenance is a variable overhead cost that is based on machine-hours. The performance report for July showed that actual maintenance costs totaled $9,870 and that the associated rate variance was $300 unfavorable. If 5,500 machine-hours were actually worked during July, the standard maintenance cost per machine-hour was:

Accepted Answer

The actual maintenance cost was $9,870, and the rate variance was $300 unfavorable, meaning the actual cost was $300 more than the standard cost. Therefore, the standard cost was $9,870 - $300 = $9,570. Dividing this by the 5,500 machine-hours gives a standard cost of $1.74 per machine-hour.

Question 18

Piper Corporation's standards call for 8,000 direct labor-hours to produce2,000 units of product. During October the company worked 1,650 direct labor-hours and produced 1,650 units. The standard hours allowed for October would be:

Accepted Answer

The standard hours allowed for October can be calculated as follows:
Standard hours per unit = 8,000/2,000 = 4
Standard hours for 1,650 units = 4 x 1,650 = 6,600 hours. Therefore, the best choice is C.

Question 19

The following standards for variable manufacturing overhead have been established for a company that makes only one product:  The following data pertain to operations for the last month:
 What is the variable overhead efficiency variance for the month?

Accepted Answer

The answer of The following standards for variable manufacturing overhead...

Question 20

Krizun Industries makes heavy construction equipment. The standard for a particular crane calls for 20 direct labor-hours at $24 per direct labor-hour. During a recent period 875 cranes were made. The labor efficiency variance was $1,200 Unfavorable. How many actual direct labor-hours were worked?

Accepted Answer

The labor efficiency variance is calculated as (Actual Hours - Standard Hours) x Standard Rate. The standard hours for 875 cranes is 875 x 20 = 17,500 hours. The variance is $1,200 Unfavorable, so (Actual Hours - 17,500) x $24 = $1,200. Solving for Actual Hours gives 17,550 hours.

Quiz 10: Standard Costs and Variances

The following labor standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: What is the labor efficiency variance for the month?

The following labor standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: What is the labor rate variance for the month?

The following labor standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: What is the labor rate variance for the month?

The following information relates to the direct labor at Padmaja Manufacturing, Incorporated for March: During March, Padmaja produced 2,100 units. What is Padmaja's labor efficiency variance for March?

The following standards for variable manufacturing overhead have been established for a company that makes only one product: The following data pertain to operations for the last month: What is the variable overhead efficiency variance for the month?

Viger Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs) . The company has provided the following data for the most recent month: What was the variable overhead rate variance for the month?

Information on Westcott Corporation's direct labor costs for a recent month follows: What were the actual hours worked during the month, rounded to the nearest hour?

Viger Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs) . The company has provided the following data for the most recent month: What was the variable overhead rate variance for the month?

The Fime Corporation uses a standard costing system. The following data have been assembled for December: The standard hours allowed for December's production is:

Piper Corporation's standards call for 1,000 direct labor-hours to produce 250 units of product. During October the company worked 1,250 direct labor-hours and produced 300 units. The standard hours allowed for October would be:

Elliott Corporation makes and sells a single product. Last period the company's labor rate variance was $14,400 Unfavorable. During the period, the company worked 36,000 actual direct labor-hours at an actual cost of $338,400. The standard labor rate for the product in dollars per hour is:

The Fime Corporation uses a standard costing system. The following data have been assembled for December: The standard hours allowed for December's production is:

Krizun Industries makes heavy construction equipment. The standard for a particular crane calls for 20 direct labor-hours at $16 per direct labor-hour. During a recent period1,300 cranes were made. The labor efficiency variance was $5,200 Unfavorable. How many actual direct labor-hours were worked?

Piper Corporation's standards call for 8,000 direct labor-hours to produce2,000 units of product. During October the company worked 1,650 direct labor-hours and produced 1,650 units. The standard hours allowed for October would be:

The following standards for variable manufacturing overhead have been established for a company that makes only one product: The following data pertain to operations for the last month: What is the variable overhead efficiency variance for the month?

Krizun Industries makes heavy construction equipment. The standard for a particular crane calls for 20 direct labor-hours at $24 per direct labor-hour. During a recent period 875 cranes were made. The labor efficiency variance was $1,200 Unfavorable. How many actual direct labor-hours were worked?