A company provided the following direct materials cost information. Compute the total direct materials cost variance.

Standard costs assigned:
Direct materials standard cost (405,000 units @ $2/unit)	$	810,000
Actual costs:
Direct Materials costs incurred (403,750 units @ $2.20/unit)	$	888,250

Multiple Choice

• $2,500 Favorable.
• $78,250 Favorable.
• $78,250 Unfavorable.
• $80,750 Favorable.
• $80,750 Unfavorable.

Fletcher Company collected the following data regarding production of one of its products. Compute the direct labor efficiency variance.

Direct labor standard (2 hrs. @ $12.75/hr.)	$	25.50		per finished unit
Actual direct labor hours		81,500		hrs.
Actual finished units produced		40,000		units
Actual cost of direct labor	$	1,100,250

Multiple Choice

• $19,125 favorable.
• $80,250 favorable.
• $61,125 favorable.
• $19,125 unfavorable.
• $80,250 unfavorable.

Fletcher Company collected the following data regarding production of one of its products. Compute the direct labor rate variance.

Direct labor standard (2 hrs. @ $12.75/hr.)	$	25.50		per finished unit
Actual direct labor hours		81,500		hrs.
Actual finished units produced		40,000		units
Actual cost of direct labor	$	1,100,250

Multiple Choice

• $80,250 unfavorable.
• $80,250 favorable.
• $61,125 favorable.
• $61,125 unfavorable.
• $19,125 unfavorable.

A job was budgeted to require 3 hours of labor per unit at $11.00 per hour. The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $269,500. What is the direct labor rate variance?

Multiple Choice

• $27,500 unfavorable.
• $22,000 favorable.
• $16,000 unfavorable.
• $16,000 favorable.
• $6,000 unfavorable.

Parallel Enterprises has collected the following data on one of its products. During the period the company produced 25,000 units. The direct materials quantity variance is:

Direct materials standard (7 kg. @ $2/kg)	$	14	per finished unit
Actual cost of materials purchased	$	322,500
Actual direct materials purchased and used		150,000	kg

Multiple Choice

• $27,500 unfavorable.
• $50,000 unfavorable.
• $50,000 favorable.
• $22,500 unfavorable.
• $22,500 favorable.

Identify the situation below that will result in a favorable variance.

Multiple Choice

• Actual revenue is higher than budgeted revenue.
• Actual revenue is lower than budgeted revenue.
• Actual income is lower than expected income.
• Actual costs are higher than budgeted costs.
• Actual expenses are higher than budgeted expenses.

Which department is often responsible for the direct materials price variance?

Multiple Choice

• The accounting department.
• The production department.
• The purchasing department.
• The finance department.
• The budgeting department.

Parallel Enterprises has collected the following data on one of its products. During the period the company produced 25,000 units. The direct materials price variance is:

Direct materials standard (7 kg. @ $2/kg)	$	14	per finished unit
Actual cost of materials purchased	$	322,500
Actual direct materials purchased and used		150,000	kgs.

Multiple Choice

• $27,500 unfavorable.
• $50,000 unfavorable.
• $50,000 favorable.
• $22,500 unfavorable.
• $22,500 favorable.

A company has established 5 pounds of Material J at $2 per pound as the standard for the material in its Product Z. The company has just produced 1,000 units of this product, using 5,200 pounds of Material J that cost $9,880.The direct materials price variance is:

Multiple Choice

• $520 unfavorable.
• $400 unfavorable.
• $120 favorable.
• $520 favorable.
• $400 favorable.

Fletcher Company collected the following data regarding production of one of its products. Compute the variable overhead spending variance.

Direct labor standard (2 hrs. @ $12.75/hr.)	$	25.50		per finished unit
Actual direct labor hours		81,500		hrs.
Budgeted units		42,000		units
Actual finished units produced		40,000		units
Standard variable OH rate (2 hrs. @ $14.30/hr.)	$	28.60		per finished unit
Standard fixed OH rate ($336,000/42,000 units)	$	8.00		per unit
Actual cost of variable overhead costs incurred	$	1,140,000
Actual cost of fixed overhead costs incurred	$	338,000

Multiple Choice

• $25,450 favorable.
• $4,000 favorable.
• $4,000 unfavorable.
• $21,450 unfavorable..
• $21,450 favorable.

A company's flexible budget for 12,000 units of production showed sales, $48,000; variable costs, $18,000; and fixed costs, $16,000. The contribution margin expected if the company produces and sells 16,000 units is:

Multiple Choice

• $48,000.
• $64,000.
• $40,000.
• $24,000.
• $18,000.

Based on predicted production of 12,000 units, a company anticipates $150,000 of fixed costs and $123,000 of variable costs. The flexible budget amounts of fixed and variable costs for 10,000 units are:

Multiple Choice

• $125,000 fixed and $102,500 variable.
• $125,000 fixed and $123,000 variable.
• $102,500 fixed and $150,000 variable.
• $150,000 fixed and $123,000 variable.
• $150,000 fixed and $102,500 variable.

A company uses the following standard costs to produce a single unit of output.

Direct materials	6 pounds at $0.90 per pound	=	$	5.40
Direct labor	0.5 hour at $12.00 per hour	=	$	6.00
Manufacturing overhead	0.5 hour at $4.80 per hour	=	$	2.40

During the latest month, the company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $56,350 based on 4,900 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was $10,400. Based on this information, the total direct labor cost variance for the month was:

Multiple Choice

• $3,650 favorable
• $2,450 favorable
• $1,200 unfavorable
• $1,200 favorable
• $2,450 unfavorable

A company's flexible budget for 12,000 units of production showed sales, $48,000; variable costs, $18,000; and fixed costs, $16,000. The fixed costs expected if the company produces and sells 16,000 units is:

Multiple Choice

• $16,000.
• $64,000.
• $48,000.
• $24,000.
• $18,000.

Milltown Company specializes in selling used cars. During the month, the dealership sold 22 cars at an average price of $15,000 each. The budget for the month was to sell 20 cars at an average price of $16,000. Compute the dealership's sales price variance for the month.

Multiple Choice

• $22,000 unfavorable.
• $10,000 favorable.
• $22,000 favorable.
• $32,000 unfavorable.
• $32,000 favorable.

Use the following data to find the total direct labor cost variance if the company produced 3,500 units during the period.

Direct labor standard (4 hrs. @ $12/hr.)	$	48	per unit
Actual hours worked		12,250
Actual rate per hour	$	12.50

Multiple Choice

• $6,125 unfavorable.
• $7,000 unfavorable.
• $7,000 favorable.
• $21,000 favorable.
• $14,875 favorable.

Fletcher Company collected the following data regarding production of one of its products. Compute the standard quantity allowed for the actual output.

Direct materials standard (6 lbs. @ $2/lb.)	$	12		per finished unit
Actual direct materials used		243,000		lbs.
Actual finished units produced		40,000		units
Actual cost of direct materials used	$	483,570

Multiple Choice

• 243,000 pounds.
• 240,000 pounds.
• 40,000 pounds.
• 480,000 pounds.
• 80,000 pounds.

Standard costs are used in the calculation of:

Multiple Choice

• Price and quantity variances.
• Price variances only.
• Quantity variances only.
• Price, quantity, and sales variances.
• Quantity and sales variances.

Claymore Corp. has the following information about its standards and production activity for September. The controllable variance is:

Actual total factory overhead incurred	$	28,175
Standard factory overhead:
Variable overhead	$	3.10		per unit produced
Fixed overhead
($12,000/6,000 estimated units to be produced)	$	2		per unit
Actual units produced		4,800		units

Multiple Choice

• $1,295U.
• $1,295F.
• $2,400U.
• $2,400F.
• $3,695U.

A job was budgeted to require 3 hours of labor per unit at $11.00 per hour. The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $269,500. What is the direct labor efficiency variance?

Multiple Choice

• $27,500 unfavorable.
• $22,000 unfavorable.
• $16,000 unfavorable.
• $22,000 favorable.
• $6,000 unfavorable.

A company's flexible budget for 48,000 units of production showed variable overhead costs of $72,000 and fixed overhead costs of $64,000. The company incurred overhead costs of $122,800 while operating at a volume of 40,000 units. The total controllable cost variance is:

Multiple Choice

• $1,200 favorable.
• $1,200 unfavorable.
• $13,200 favorable.
• $13,200 unfavorable.
• $15,200 favorable.

The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound. In manufacturing 8,000 units, 47,000 pounds of material were used at a cost of $51 per pound. What is the total direct materials cost variance?

Multiple Choice

• $48,000 unfavorable.
• $51,000 favorable.
• $51,000 unfavorable.
• $3,000 favorable.
• $3,000 unfavorable.

The difference between actual price per unit of input and the standard price per unit of input results in a:

Multiple Choice

• Standard variance.
• Quantity variance.
• Volume variance.
• Controllable variance.
• Price variance.

Milltown Company sells used cars. During the month, the dealership sold 22 cars at an average price of $15,000 each. The budget for the month was to sell 20 cars at an average price of $16,000. Compute the dealership's total sales variance for the month.

Multiple Choice

• $22,000 unfavorable.
• $10,000 favorable.
• $22,000 favorable.
• $32,000 unfavorable.
• $32,000 favorable.

The following information describes a company's usage of direct labor in a recent period. The direct labor efficiency variance is:

Actual hours used		45,000
Actual rate per hour	$	15.00
Standard rate per hour	$	14.50
Standard hours for units produced		47,000

Multiple Choice

• $29,000 unfavorable.
• $29,000 favorable.
• $22,500 unfavorable.
• $52,500 favorable.
• $52,500 unfavorable.