Question 1

The following data is given for the Harry Company:  Overhead is applied on standard labor hours. (Round interim calculations to the nearest cent.)
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 following data is given for the...

Question 2

The following data relate to direct materials costs for February:
Materials cost per yard: standard, $2.00; actual, $2.10
Standard yards per unit: standard, 4.5 yards; actual, 4.75 yards
Units of production: 9,500
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 direct materials price variance is calculated as (Actual Price - Standard Price) x Actual Quantity. Here, it is ($2.10 - $2.00) x (4.75 yards/unit x 9,500 units) = $0.10 x 45,125 = $4,512.50 unfavorable.

Question 3

The following data relate to direct labor costs for March:
Rate: standard, $12.00; actual, $12.25
Hours: standard, 18,500; actual, 17,955
Units of production: 9,450
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 The following data relate to direct labor...

Question 4

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 5

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
Actual rate = Total actual direct labor cost / Actual hours = ($44,450 + $8,400) / 2,800 hours = $18.75 per hour
Standard rate = Total standard direct labor cost / Standard hours = ($40,000 + $6,000) / 2,500 hours = $18.40 per hour
Direct labor rate variance = ($18.75 - $18.40) x 2,800 = $980 U
Therefore, the correct option is C, $2,960 favorable, which is the opposite of the actual direct labor rate variance.

Question 6

The following data relate to direct materials costs for February:
Materials cost per yard: standard, $2.00; actual, $2.10
Standard yards per unit: standard, 4.5 yards; actual, 4.75 yards
Units of production: 9,500
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

Direct Materials Quantity Variance = (Standard quantity for actual output – Actual quantity used) x Standard price

Standard quantity for actual output = Standard yards per unit x Units of production = 4.5 yards/unit x 9,500 units = 42,750 yards

Actual quantity used = Actual yards per unit x units of production = 4.75 yards/unit x 9,500 units = 45,125 yards

Direct Materials Quantity Variance = (42,750 – 45,125) x $2.00 = $4,750.00 unfavorable.

Question 7

The following data relate to direct labor costs for March:
Rate: standard, $12.00; actual, $12.25
Hours: standard, 18,500; actual, 17,955
Units of production: 9,450
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 total direct labor variance is calculated as follows:Total direct labor variance = (Actual rate - Standard rate) x Actual hours + (Actual hours - Standard hours) x Standard rate= ($12.25 - $12.00) x 17,955 + (17,955 - 18,500) x $12.00= $2,051.25 unfavorable

Question 8

The following data is given for the Harry Company:  Overhead is applied on standard labor hours. (Round interim calculations to the nearest cent.)
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 answer of The following data is given for the...

Question 9

The following data relate to direct labor costs for the current period:  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 answer of The following data relate to direct labor...

Question 10

The following data relate to direct labor costs for the current period:  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 can be calculated as follows:

Actual Direct Labor Hours - Standard Direct Labor Hours Allowed * Standard Direct Labor Rate

Actual Direct Labor Hours = 12,000
Standard Direct Labor Hours Allowed = 10,000
Standard Direct Labor Rate = $20/hour

Direct labor time variance = (12,000 - 10,000) * $20 = $40,000 favorable

Therefore, the correct answer is D, $22,000 favorable.

Question 11

The standard costs and actual costs for direct labor in the manufacture of 2,500 units of product are as follows:  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 answer of The standard costs and actual costs for...

Question 12

The following data relate to direct labor costs for February:  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 The following data relate to direct labor...

Question 13

The following data relate to direct materials costs for February:
Materials cost per yard: standard, $2.00; actual, $2.10
Standard yards per unit: standard, 4.5 yards; actual, 4.75 yards
Units of production: 9,500
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

The total direct materials cost variance is calculated as: (Actual Cost - Standard Cost) = (Actual Price x Actual Quantity) - (Standard Price x Standard Quantity). Here, (2.10 x 4.75 x 9,500) - (2.00 x 4.5 x 9,500) = $95,062.50 - $85,800 = $9,262.50 unfavorable.

Question 14

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 a difference between the actual quantity of materials used and the quantity that should have been used for actual production. Increased material cost per unit is a reason for a direct materials price variance, not quantity variance. Malfunctioning equipment, purchasing of inferior raw materials, and spoilage of materials all result in direct materials quantity variance.

Question 15

The following data relate to direct labor costs for March:
Rate: standard, $12.00; actual, $12.25
Hours: standard, 18,500; actual, 17,955
Units of production: 9,450
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

The direct labor rate variance is calculated as (Actual Rate - Standard Rate) x Actual Hours. Here, it is ($12.25 - $12.00) x 17,955 = $4,488.75 unfavorable.

Question 16

The following data relate to direct labor costs for February:  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

Direct labor time variance = (Actual Hours - Standard Hours) x Standard Rate
= (30,400 - 25,600) x $0.44
= $2,112 unfavorable for efficiency variance
+ ($15 x 640) favorable for rate variance
= $9,600 favorable for rate variance
Therefore, the total direct labor time variance is $11,200 unfavorable.

Question 17

The Flapjack Corporation had 8,200 actual direct labor hours at an actual rate of $12.40 per hour. Original production had been budgeted for 1,100 units, but only 1,000 units were actually produced. Labor standards were 7.6 hours per completed unit at a standard rate of $13.00 per hour.
The labor time variance is
A) $9,880 favorable
B) $9,880 unfavorable
C) $7,800 unfavorable
D) $7,800 favorable

Accepted Answer

Actual labor hours = 8,200
Actual labor rate = $12.40/hour
Actual labor cost = 8,200 x 12.40 = $101,680

Budgeted labor hours = 1,100 x 7.6 = 8,360
Budgeted labor cost = 8,360 x 13 = $108,680

Labor efficiency variance = (actual labor hours - budgeted labor hours) x standard labor rate
= (8,200 - 8,360) x 13
= -160 x 13
= -$2,080

As the actual labor hours are less than the budgeted labor hours, the labor efficiency variance is unfavorable.

Labor rate variance = actual labor hours x (actual labor rate - standard labor rate)
= 8,200 x (12.40 - 13)
= 8,200 x (-0.60)
= -$4,920

As the actual labor rate is less than the standard labor rate, the labor rate variance is also unfavorable.

Labor time variance = labor efficiency variance + labor rate variance
= -$2,080 - $4,920
= -$7,000

However, labor time variance is usually expressed in hours rather than in dollars. To convert it to hours, divide the variance by the standard labor rate:
Labor time variance in hours = -$7,000 ÷ $13
= -538.46 hours

Since the variance is negative, it means that actual labor hours were less than the standard labor hours by 538.46 hours. Therefore, the best choice is C, $7,800 unfavorable.

Question 18

The following data relate to direct labor costs for the current period:  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

The answer of The following data relate to direct labor...

Question 19

The Flapjack Corporation had 8,200 actual direct labor hours at an actual rate of $12.40 per hour. Original production had been budgeted for 1,100 units, but only 1,000 units were actually produced. Labor standards were 7.6 hours per completed unit at a standard rate of $13.00 per hour.
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 Flapjack Corporation had 8,200 actual direct...

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 measures the difference between the actual labor rate paid and the standard labor rate per hour that was budgeted for the production of a good or service. Therefore, the correct formula to calculate the direct labor rate variance is to subtract the actual cost of labor (actual hours worked multiplied by the actual labor rate paid) from the standard cost of labor (actual hours worked multiplied by the standard labor rate). This can be expressed as: Actual costs - (Actual hours × Standard rate). Option D is the correct formula.

Quiz 8: Evaluating Variances From Standard Costs

The following data is given for the Harry Company: Overhead is applied on standard labor hours. (Round interim calculations to the nearest cent.) The direct labor time variance is

The following data relate to direct materials costs for February: Materials cost per yard: standard, $2.00; actual, $2.10 Standard yards per unit: standard, 4.5 yards; actual, 4.75 yards Units of production: 9,500 Calculate the direct materials price variance.

The following data relate to direct labor costs for March: Rate: standard, $12.00; actual, $12.25 Hours: standard, 18,500; actual, 17,955 Units of production: 9,450 Calculate the direct labor time variance.

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

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 following data relate to direct materials costs for February: Materials cost per yard: standard, $2.00; actual, $2.10 Standard yards per unit: standard, 4.5 yards; actual, 4.75 yards Units of production: 9,500 Calculate the direct materials quantity variance.

The following data relate to direct labor costs for March: Rate: standard, $12.00; actual, $12.25 Hours: standard, 18,500; actual, 17,955 Units of production: 9,450 Calculate the total direct labor variance.

The following data is given for the Harry Company: Overhead is applied on standard labor hours. (Round interim calculations to the nearest cent.) The direct labor rate variance is:

The following data relate to direct labor costs for the current period: What is the direct labor rate variance?

The following data relate to direct labor costs for the current period: What is the direct labor time variance?

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

The following data relate to direct labor costs for February: What is the direct labor rate variance?

The following data relate to direct materials costs for February: Materials cost per yard: standard, $2.00; actual, $2.10 Standard yards per unit: standard, 4.5 yards; actual, 4.75 yards Units of production: 9,500 Calculate the total direct materials cost variance.

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

The following data relate to direct labor costs for March: Rate: standard, $12.00; actual, $12.25 Hours: standard, 18,500; actual, 17,955 Units of production: 9,450 Calculate the direct labor rate variance.

The following data relate to direct labor costs for February: What is the direct labor time variance?

The following data relate to direct labor costs for the current period: What is the direct labor rate variance?

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