Reference no: EM132517550

Question 1: Voltox Inc. uses a standard costing system. It has calculated a direct labor rate variance of $3,750, unfavorable, and a direct labor efficiency variance of $2,750, favorable. The journal entry to record the direct labor costs includes a

Debit to Direct Labor Rate Variance for $3,750
Debit to Direct Labor Efficiency Variance for $2,750
Credit to Wages Payable or Cash for $6,500
Credit to Cost of Goods Sold for $6,500

Question 2: Under a standard costing system, the direct materials price variance is recorded when the

Cost of Goods Sold account is closed
Raw materials are put into production
Raw materials are purchased
Direct materials quantity variance is recorded

Question 3: At the end of the year, the Cost Variances account of Alpha Inc. shows a debit balance of $1,700. The balance is considered the fixed overhead spending variance of $200, favorable. The total standard cost of production is $165,500. Calculate the actual cost of goods sold.

$163,800
$167,200
$165,500
$164,000

Question 4: Xcel Technologies, Inc. applies variable manufacturing overhead to products based on machine hours. The standard variable overhead rate is $5 per machine hour. The standard time allowed for producing one unit is 2 machine hours. During the month of August, the company produced 500 units. It incurred actual variable costs of $5,655 and used 870 machine hours. Calculate the variable overhead rate variance for the month of August.

$1,500 unfavorable
$1,305 favorable
$1,500 favorable
$1,305 unfavorable

Question 5: Xcel Technologies, Inc. applies variable manufacturing overhead to products based on machine hours. The standard variable overhead rate is $5 per machine hour. The standard time allowed for producing one unit is 2 machine hours. During the month of August, the company produced 500 units. It incurred actual variable costs of $5,655 and used 870 machine hours. Calculate the variable overhead efficiency variance for the month of August.

$650 favorable
$650 unfavorable
$845 favorable
$845 unfavorable

Question 6: BonJoy Co. applies variable overhead on the basis of direct labor hours. For the month of June, the variable overhead efficiency variance is unfavorable but the variable overhead rate variance is favorable. Which of the following can be concluded from this?

The fixed overhead costs were not incurred.
The actual variable overhead rate was more than budgeted.
The quantity of actual direct labor hours used was more than budgeted.
The quantity of actual direct labor hours used was less than budgeted.