Reference no: EM131529042

Assignment

Question 1: Ideal standards do not allow for machine breakdowns and other normal inefficiencies.
True
False

Question 2. Jeffs Corporation is developing direct labor standards. The basic direct labor wage rate is $14.00 per hour. Employment taxes are 11% of the basic wage rate. Fringe benefits are $3.24 per direct labor-hour. The standard rate per direct labor-hour should be:
$14.00
$9.22
$4.78
$18.78

Question 3. The standard quantity or standard hours allowed refers to the amount of the input that should have been used to produce the actual output of the period.
True
False

Question 4. Matt Company uses a standard cost system. Information for raw materials for Product RBI for the month of October follows:

What is the materials purchase price variance?
$90 favorable
$90 unfavorable
$100 favorable
$100 unfavorable

Question 5. When the material price variance is recorded at the time of purchase, raw materials are recorded as inventory at actual cost.
True
False

Question 6. Magno Cereal Corporation uses a standard cost system to collect costs related to the production of its "crunchy pickle" cereal. The pickle (materials) standards for each batch of cereal produced are 1.4 pounds of pickles at a standard cost of $3.00 per pound. During the month of August, Magno purchased 78,000 pounds of pounds at a total cost of $253,500. Magno used all of these pickles to produce 60,000 batches of cereal. What is Magno's materials quantity variance for the month of August?
$1,500 unfavorable
$18,000 favorable
$19,500 unfavorable
$54,000 unfavorable

Question 7. The following labor standards have been established for a particular product:

The following data pertain to operations concerning the product for the last month:

What is the labor rate variance for the month?
$687 F
$2,106 F
$1,410 F
$2,106 U

Question 8. Warp Manufacturing Corporation uses a standard cost system to collect costs related to the production of its ski lift chairs. Warp uses machine hours as an overhead base. The variable overhead standards for each chair are 1.2 machine hours at a standard cost of $18 per hour.
During the month of September, Warp incurred 34,000 machine hours in the production of 32,000 ski lift chairs. The total variable overhead cost was $649,400. What is Warp's variable overhead spending variance for the month of September?
$37,400 unfavorable
$41,800 favorable
$79,200 favorable
$84,040 favorable

Question 9. During a recent lengthy strike at Morell Manufacturing Company, management replaced striking assembly line workers with office workers. The assembly line workers were being paid $18 per hour while the office workers are only paid $10 per hour. What is the most likely effect on the labor variances in the first month of this strike?

Labor Rate Variance Labor Efficiency Variance
Unfavorable No effect

Labor Rate Variance Labor Efficiency Variance
No effect Unfavorable

Labor Rate Variance Labor Efficiency Variance
Unfavorable Favorable

Labor Rate Variance Labor Efficiency Variance
Favorable Unfavorable

Question 10. Jeffs Corporation is developing direct labor standards. The basic direct labor wage rate is $14.00 per hour. Employment taxes are 11% of the basic wage rate. Fringe benefits are $3.24 per direct labor-hour. The standard rate per direct labor-hour should be:
$14.00
$9.22
$4.78
$18.78

Question 11. Lion Company's direct labor costs for the month of January were as follows:
Actual total direct labor-hours............ 20,0000
Standard total direct labor-hours.........21,000
Direct labor rate variance-unfavorable...$3,000
Total direct labor cost.........................$126,000

What was Lion's direct labor efficiency variance?
$6,000 favorable
$6,150 favorable
$6,300 favorable
$6,450 favorable

Question 12. Longview Hospital performs blood tests in its laboratory. The following standards have been set for each blood test performed:

During May, the laboratory performed 1,500 blood tests. On May 1 there were no direct materials (plates) on hand; after a plate is used for a blood test it is discarded. Variable overhead is assigned to blood tests on the basis of direct labor hours. The following events occurred during May:
• 3,600 plates were purchased for $9,540
• 3,200 plates were used for blood tests
• 340 actual direct labor hours were worked at a cost of $5,550
The labor efficiency variance for May is:
$600 F
$600 U
$515 U
$515 F

Question 13. The purpose of a flexible budget is to:
allow management some latitude in meeting goals.
eliminate fluctuations in production reports by ignoring variable costs.
compare actual and budgeted results at virtually any level of activity.
reduce the time to prepare the annual budget.

Question 14. Sharifi Hospital bases its budgets on patient-visits. The hospital's static budget for October appears below:

The total overhead cost at an activity level of 9,200 patient-visits per month should be:
$260,360
$250,070
$249,300
$240,550

Question 15. Alapai Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company has provided the following data for the most recent month:

What was the total of the variable overhead spending and fixed overhead budget variances for the month?
$3,720 favorable
$2,280 unfavorable
$1,840 favorable
$1,880 unfavorable.