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Exam 9: Flexible Budgets Standard Costs and Variance Analysis

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Question 91

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The materials quantity variance for October is:

A) $52,500 Unfavorable
B) $52,500 Favorable
C) $12,500 Unfavorable
D) $12,500 Favorable

E) C) and D)
F) None of the above

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Question 92

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Camps Inc.has a standard cost system.The standards for direct materials for one of its products specify 4.4 ounces of a particular input per unit of output at a standard cost of $6.40 per ounce.The company has reported the following actual results for the product for May: Required: a.Compute the materials price variance for this input for May. b.Compute the materials quantity variance for this input for May.

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a.Materials price variance = (AQ × AP)− ...

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Question 93

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During September, Clendennen Corporation budgeted for 24,000 customers, but actually served 27,000 customers.The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $6.00q Wages and salaries: $36,700 + $2.10q Supplies: $1.10q Insurance: $12,600 Miscellaneous expense: $4,600 + $0.30q Required: Prepare the company's flexible budget for September based on the actual level of activity for the month.

At Rost Corporation, indirect labor is a variable cost that varies with direct labor-hours.Last month's performance report showed that actual indirect labor cost totaled $7,540 for the month and that the associated spending variance was $560 F.If 10,800 direct labor-hours were actually worked last month, then the flexible budget cost formula for indirect labor must be (per direct labor-hour) closest to:

The administrative expenses in the planning budget for December would be closest to:

Pyrdum Corporation produces metal telephone poles.In the most recent month, the company budgeted production of 3,500 poles.Actual production was 3,800 poles.According to standards, each pole requires 4.6 machine-hours.The actual machine-hours for the month were 17,800 machine-hours.The standard variable manufacturing overhead rate is $5.40 per machine-hour.The actual variable manufacturing overhead cost for the month was $96,712.The variable overhead efficiency variance is:

The "Other expenses" in the flexible budget for October would have been closest to:

The "Employee salaries and wages" in the flexible budget for January would have been closest to:

The standard variable overhead rate per machine setup is:

The "Other expenses" in the flexible budget for January would have been closest to:

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

Pargo Corporation bases its budgets on the activity measure customers served.During May, the company planned to serve 29,000 customers, but actually served 30,000 customers.The company has provided the following data concerning the formulas it uses in its budgeting: Required: Prepare the company's flexible budget for May based on the actual level of activity for the month.

The labor rate variance for the month is closest to:

The variable overhead efficiency variance for January is:

The labor rate variance for the month is closest to:

The net operating income in the planning budget for October would be closest to:

The amount shown for total expenses in the planning budget for November would have been closest to:

Boldrin Inc.has a standard cost system.The standards for direct labor for one of its products specify 0.20 hours per unit at $18.70 per hour.The company has reported the following actual results for the product for August: Required: a.Compute the labor rate variance for August. b.Compute the labor efficiency variance for August.

An unfavorable materials quantity variance occurs when the actual quantity used in production is less than the standard quantity allowed for the actual output of the period.

Wyzard Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished.The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for February. When the company prepared its planning budget at the beginning of February, it assumed that 37 containers would have been refurbished.However, 32 containers were actually refurbished during February. The revenue variance in the Revenue and Spending Variances column of a report comparing actual results to the flexible budget for February would have been closest to: