Chapters 10 & 11 – Review Questions For the following question(s) refer to the information below. Actual direct labor-hours used 315 hours Standard materials price per pound $2.50 per lb. Actual direct labor rate per hour $3.00 Standard quantity of direct materials used 450 lbs. Standard direct labor-hours used 300 hours Actual direct materials price $2.52 per lb. Standard direct labor rate per $3.10 Actual quantity of direct materials purchased & used 445 lbs. 1 What is the amount of the materials efficiency (quantity) variance? Indicate whether it is favorable or unfavorable. A. $12.60 B. $12.50 C. $ 9 .10 D. $ 9 .00 2 What is the amount of the materials price variance? Indicate whether it is favorable or unfavorable. A. $8.90 B. $8.00 C. $9.90 D. $9.00 3 If 450 pounds had been purchased, but only 445 pounds had been used, what would be the amount of the materials price variance? Indicate whether it is favorable or unfavorable. A. $8.90 B. $8.00 C. $9.90 D. $9.00 4 What is the standard quantity of materials needed to make one unit of product if 300 units of product were actually made this period? A. 1 B. 1.5 C. 3 D. Impossible to answer with given information 5 What is the amount of the labor rate (price) variance? A. 31.50 favorable B. 31.50 unfavorable C. 30.00 favorable D. 30.00 unfavorable6 What is the amount of the labor efficiency (quantity) variance? A. $45.50 favorable B. $45.50 unfavorable C. $46.50 favorable D. $46.50 unfavorable For the following question(s) refer to the information below. The following information relates to the month of April for The Marilyn Manufacturing Company which uses a standard cost accounting system. Actual total direct labor $43,400 Actual direct hours labor used (DLH) 14,000 Standard hours allowed for actual output 15,000 Direct labor rate variance (unfavorable) $1,400 Actual variable overhead $22,000 Actual fixed overhead $10,000 Budgeted fixed overhead $9,000 "Normal" activity in hours 12,000 Total overhead application rate per standard DLH $2.25 7 What is the Marilyn’s fixed overhead standard price? A. $ 1.00 B. $ .75 C. $ .60 D. $ 1.108 What was the amount of Marilyn's fixed overhead volume variance for April? (Indicate whether the variance was favorable or unfavorable.) A. $ 500 B. $1,000 C. $1,750 D. $2,250 9 What was the amount of Marilyn's fixed overhead spending variance for April? (Indicate whether the variance was favorable or unfavorable.) A. $ 500 B. $1,000 C. $1,750 D. $2,250 10 What is Marilyn’s variable overhead standard price? A. $ 1.00 B. $ 1.25 C. $ 1.35 D. $ 1.5011 What is the amount of the variable overhead spending variance? A. $1,000 favorable B. $1,000 unfavorable C. $1,500 favorable D. $1,500 unfavorable 12 What is the amount of the variable overhead efficiency variance? A. $1,000 favorable B. $1,000 unfavorable C. $1,500 favorable D. $1,500 unfavorableQuestions 13-24 refer to the information below. The Big Book Company builds wooden bookshelf wall units. The company's standard costs are: Wood.................................... 25 pounds at $6.40 per pound Direct labor........................... 5 hours at $12.00 per hour Variable overhead................. $6 per direct labor hour Fixed overhead...................... $130,000 per period, applied at the rate of $4.00 per direct labor hour The transactions for July 1993 included: 1. Eighty (80) tons of wood were purchased at $6.50 per pound. (Materials variances are computed at the time of purchase. There are 2,000 pounds in a ton.) 2. 155,000 pounds of wood were issued to production. 3. Direct labor incurred was 31,000 hours at an average cost of $11.50 per hour. 4. Overhead costs were $302,000, of which $181,000 were variable. 5. Six thousand (6,000) units were produced during July. 13. What was the flexible budget for the total cost of the wood used in production? A. $1,007,500 B. $ 960,000 C. $ 975,000 D. $ 992,000 14. What was the material price variance for the wood? (Indicate whether the variance was favorable or unfavorable.) A. $16,000 U F B. $32,000 U F C. $48,000 U F D. $64,000 U F15. What was the material efficiency variance for the wood used in production? (Indicate whether the variance was favorable or unfavorable.) A. $16,000 U F B. $32,000 U F C. $48,000 U F D. $64,000 U F 16. What was the total flexible budget for the direct labor cost? A. $355,000 B. $356,500 C. $360,000 D. $372,000 17. What was the direct labor price variance? (Indicate whether the variance was favorable or unfavorable.) A. $11,500 U F B. $12,000 U F C. $15,500 U F D. $19,000 U F 18. What was the direct labor efficiency variance? (Indicate whether the variance was favorable or unfavorable.) A. $11,500 U F B. $12,000 U F C. $15,500 U F D. $19,000 U F 19. What was the flexible budget for the total variable overhead cost? A. $121,000 B. $180,000 C. $181,000 D. $302,000 20. What was the variable overhead spending variance for July? (Indicate whether the variance was favorable or unfavorable.) A. $ 6,000 U F B. $ 5,000 U F C. $ 60,000 U F D. $121,000 U F 21. What was the variable overhead efficiency variance for July? (Indicate whether the variance was favorable or unfavorable.) A. $ 6,000 U F B. $ 5,000 U F C. $ 60,000 U F D. $121,000 U F22. What was the normal capacity (the amount of direct labor hours assumed in calculating the Standard Price for Fixed Overhead)? A. 25,000 B. 17,500 C. 30,000 D. 32,500 23. What was the fixed overhead budget (spending) variance for July? (Indicate whether the variance was favorable or unfavorable.) A. $ 1,000 U F B. $ 9,000 U F C. $10,000 U F D. $19,000 U F 24. What was the fixed overhead production volume variance for July? (Indicate whether the variance was favorable or unfavorable.) A. $ 1,000 U F B. $ 9,000 U F C. $10,000 U F D. $19,000 U
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