1. Maisa Corporation, the consultant of Marie Company, had summarized the following standard cost data extracted from the historical records and performance reports issued by the cost accounting department in the prior year to assist in her analysis and evaluation of the standard costing policy of the company:

	Input required/unit	Standard cost/unit	Standard cost/unit
Direct materials	6 kg/unit	$90/kg	$540
Direct labor	5 hrs/unit	$50/hr	$250

Other data are the following: Budgeted factory overhead for the year: Variable - 480,000 Fixed - 600,000 - The company's normal capacity per month is 400 units - Actual cost materials purchased for the year is $2,342,000 - During the year, direct materials purchased is 26,880 kg while direct materials actually used is 24,760 kgs - Actual labor costs for the year is $1,080,000 of which 24,900 direct labor hours was consumed - Actual factory overhead is $1,320,000, 65% of which is fixed cost, Factory Overhead is based on labor hours - Actual production during the year is 5,150 units a. How much is the variable overhead efficiency variance? b. How much is the controllable variance?

2. An entity that uses direct costing in its performance evaluation would normally include the following variance in its report, except:

Price variance

Volume variance

Budget variance

Efficiency variance

3. Statement 1: A budgeted cost for one unit of product may not always be the standard cost of said product. Statement 2: Standard costs maybe described as benchmarks used to evaluate performance.

both statements are true

both statements are false

Statement 1 is true

Statement 2 is true

4. Standard costs differ from budgeted costs because standard costs are:

always expressed in total amounts while budgeted costs are in per unit amounts

costs incurred for actual production while budgeted costs are that should have been incurred for production

costs that have been incurred for actual production while budgeted costs are costs that should be incurred for planned production

based on engineering studies while budgeted costs are based on historical data

5. What would result in a favorable volume variance?

Production is greater than budgeted

There is a favorable efficiency variance

Production is equal to sales

There is a favorable spending variance

6. Who is least likely to be involved in establishing standard costs for a company?

the president

the controller

the factory administrator

the marketing manager