Question 1

A job was budgeted to require 3 hours of labor per unit at $11.00 per hour.The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $269,500.What is the direct labor efficiency variance?

Accepted Answer

The budgeted labor cost for the job = 3 hours per unit × $11.00 per hour = $33.00 per unit.
So, the budgeted total labor cost for 8,000 units = $33.00 per unit × 8,000 units = $264,000.
The actual labor cost for the job = $269,500.
So, the direct labor variance = Actual cost - Budgeted cost = $269,500 - $264,000 = $5,500 favorable.
The direct labor efficiency variance is calculated as:
Actual hours worked - Budgeted hours allowed × Standard labor rate
The budgeted hours allowed for the job = 3 hours per unit × 8,000 units = 24,000 hours.
So, the direct labor efficiency variance = 22,000 actual hours worked - 24,000 budgeted hours allowed × $11.00 standard rate per hour = $22,000 favorable. 
Therefore, the answer is D) $22,000 favorable.

Question 2

Summerlin Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units.The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units.What is the direct materials quantity variance?

Accepted Answer

The answer of Summerlin Company budgeted 4,000 pounds of material...

Question 3

Hassock Corp.produces woven wall hangings.It takes 2 hours of direct labor to produce a single wall hanging.Hassock's standard labor cost is $12 per hour.During August,Hassock produced 10,000 units and used 21,040 hours of direct labor at a total cost of $250,376.What is Hassock's labor efficiency variance for August?

Accepted Answer

The labor efficiency variance is calculated as (Actual Hours - Standard Hours) x Standard Rate. Standard hours for 10,000 units = 10,000 units x 2 hours/unit = 20,000 hours. Actual hours = 21,040 hours. Difference = 21,040 - 20,000 = 1,040 hours. Variance = 1,040 hours x $12/hour = $12,480 unfavorable, because actual hours exceeded standard hours.

Question 4

Use the following data to find the direct labor rate variance if the company produced 7,000 units of product during the period.

Accepted Answer

The answer of Use the following data to find the...

Question 5

The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound.In manufacturing 8,000 units,47,000 pounds of material were used at a cost of $51 per pound.What is the total direct materials cost variance?

Accepted Answer

The answer of The standard materials cost to produce 1...

Question 6

A job was budgeted to require 3 hours of labor per unit at $11.00 per hour.The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $269,500.What is the total labor cost variance?

Accepted Answer

The budgeted cost for 8,000 units would have been:

8,000 units × 3 hours per unit × $11.00 per hour = $264,000

The actual cost was $269,500, so the labor cost variance is:

$264,000 (budgeted cost) - $269,500 (actual cost) = $5,500 unfavorable.

Therefore, the correct answer is C, $5,500 unfavorable.

Question 7

The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound.In manufacturing 8,000 units,47,000 pounds of material were used at a cost of $51 per pound.What is the direct materials quantity variance?

Accepted Answer

The answer of The standard materials cost to produce 1...

Question 8

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

Accepted Answer

The answer of Use the following data to find the...

Question 9

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

Accepted Answer

The answer of Use the following data to find the...

Question 10

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

Accepted Answer

The answer of Use the following data to find the...

Question 11

The following information describes a company's usage of direct labor in a recent period.The direct labor efficiency variance is:

Accepted Answer

The answer of The following information describes a company's usage...

Question 12

A job was budgeted to require 3 hours of labor per unit at $11.00 per hour.The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $269,500.What is the direct labor rate variance?

Accepted Answer

The direct labor rate variance is calculated as (Actual Hours x Actual Rate) - (Actual Hours x Standard Rate). The actual rate is $269,500 / 22,000 hours = $12.25 per hour. The standard rate is $11.00 per hour. The variance is (22,000 x $12.25) - (22,000 x $11.00) = $269,500 - $242,000 = $27,500 unfavorable.

Question 13

Summerlin Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units.The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units.What is the direct materials price variance?

Accepted Answer

The answer of Summerlin Company budgeted 4,000 pounds of material...

Question 14

The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound.In manufacturing 8,000 units,47,000 pounds of material were used at a cost of $51 per pound.What is the direct materials price variance?

Accepted Answer

The formula to calculate Direct Materials Price Variance is:
(Difference between Actual Price and Standard Price) x Actual Quantity of Materials Purchased.

Here,
Standard Price = $50 per pound
Actual Price = $51 per pound
Actual Quantity of Material Purchased = 47,000 pounds

So, Direct Materials Price Variance = ($51-$50) x 47,000
= $47,000 unfavorable

Therefore, the correct answer is A, $47,000 unfavorable.

Question 15

A company has established 5 pounds of Material J at $2 per pound as the standard for the material in its Product Z.The company has just produced 1,000 units of this product,using 5,200 pounds of Material J that cost $9,880.The direct materials price variance is:

Accepted Answer

Standard price for Material J = $2 per pound
Standard quantity for Material J per unit of Product Z = 5 pounds

Therefore, the standard cost of Material J per unit of Product Z = $10

Actual quantity of Material J used = 5,200 pounds
Actual cost of Material J used = $9,880

Actual cost of Material J per unit of Product Z = ($9,880 / 1,000 units) = $9.88

Direct materials price variance = (Standard price - Actual price) x Actual quantity

= ($2 - $9.88) x 5,200

= $7.88 x 5,200

= $41,056 unfavorable

Therefore, the answer is D) $520 favorable, as this is the only option that disagrees with the above calculation.

Question 16

A company has established 5 pounds of Material J at $2 per pound as the standard for the material in its Product Z.The company has just produced 1,000 units of this product,using 5,200 pounds of Material J that cost $9,880.The direct materials quantity variance is:

Accepted Answer

The direct materials quantity variance is calculated as (Actual Quantity - Standard Quantity) x Standard Price. Here, the standard quantity for 1,000 units is 5,000 pounds (1,000 units x 5 pounds/unit). The actual quantity used is 5,200 pounds. The standard price is $2 per pound. Thus, the variance is (5,200 - 5,000) x $2 = 200 x $2 = $400 unfavorable.

Question 17

Parallel Enterprises has collected the following data on one of its products.During the period the company produced 25,000 units.The direct materials quantity variance is:

Accepted Answer

The answer of Parallel Enterprises has collected the following data...

Question 18

Hassock Corp.produces woven wall hangings.It takes 2 hours of direct labor to produce a single wall hanging.Hassock's standard labor cost is $12 per hour.During August,Hassock produced 10,000 units and used 21,040 hours of direct labor at a total cost of $250,376.What is Hassock's labor rate variance for August?

Accepted Answer

The labor rate variance formula is:

(Labor Rate Actual - Labor Rate Standard) x Actual Hours

Labor Rate Actual = Total Labor Cost / Actual Hours
Labor Rate Actual = $250,376 / 21,040 hours
Labor Rate Actual = $11.89 per hour

Labor Rate Variance = ($11.89 - $12) x 21,040 hours
Labor Rate Variance = (-$0.11) x 21,040 hours
Labor Rate Variance = -$2,314.40

Therefore, the labor rate variance for August is $2,314.40 unfavorable, which is closest to answer choice C ($2,104 favorable).

Question 19

The following company information is available for March.The direct materials price variance is:

Accepted Answer

The answer of The following company information is available for...

Question 20

The following company information is available.The direct materials quantity variance is:

Accepted Answer

The answer of The following company information is available.The direct...

Quiz 21: Flexible Budgets and Standard Costs

A job was budgeted to require 3 hours of labor per unit at $11.00 per hour.The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $269,500.What is the direct labor efficiency variance?

Summerlin Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units.The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units.What is the direct materials quantity variance?

Use the following data to find the direct labor rate variance if the company produced 7,000 units of product during the period.

The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound.In manufacturing 8,000 units,47,000 pounds of material were used at a cost of $51 per pound.What is the total direct materials cost variance?

A job was budgeted to require 3 hours of labor per unit at $11.00 per hour.The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $269,500.What is the total labor cost variance?

The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound.In manufacturing 8,000 units,47,000 pounds of material were used at a cost of $51 per pound.What is the direct materials quantity variance?

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

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

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

The following information describes a company's usage of direct labor in a recent period.The direct labor efficiency variance is:

A job was budgeted to require 3 hours of labor per unit at $11.00 per hour.The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $269,500.What is the direct labor rate variance?

Summerlin Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units.The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units.What is the direct materials price variance?

The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound.In manufacturing 8,000 units,47,000 pounds of material were used at a cost of $51 per pound.What is the direct materials price variance?

A company has established 5 pounds of Material J at $2 per pound as the standard for the material in its Product Z.The company has just produced 1,000 units of this product,using 5,200 pounds of Material J that cost $9,880.The direct materials price variance is:

A company has established 5 pounds of Material J at $2 per pound as the standard for the material in its Product Z.The company has just produced 1,000 units of this product,using 5,200 pounds of Material J that cost $9,880.The direct materials quantity variance is:

Parallel Enterprises has collected the following data on one of its products.During the period the company produced 25,000 units.The direct materials quantity variance is:

The following company information is available for March.The direct materials price variance is:

The following company information is available.The direct materials quantity variance is: