Ch8

6) ShipCo. produces storage crates that require 1.2 meters of material at $.85 per meter and 0.1 direct labor hours at $15.00 per hour. Overhead is assigned at the rate of $9 per direct labor hour. What is the total standard cost for one unit of product that would appear on a standard cost card?

$25.02.

$11.52.

$2.40.

$2.52.

$3.42.

7) Levelor Company's flexible budget shows $10,710 of overhead at 75% of capacity, which was the operating level achieved during May. However, the company applied overhead to production during May at a rate of $2.00 per direct labor hour based on a budgeted operating level of 6,120 direct labor hours (90% of capacity). If overhead actually incurred was $11,183 during May, the controllable variance for the month was:

$473 unfavorable.

$473 favorable.

$1,530 favorable.

$1,530 unfavorable.

$1,057 favorable.

8) Jefferson Co. uses the following standard to produce a single unit of its product: variable overhead $6 (2 hrs. p unit @ $3/hr.). Actual data for the month show variable overhead costs of $150,000, and 24,000 units produced. The total variable overhead variance is:

$6,000F.

$6,000U.

$78,000U.

$78,000F.

$0.

9) A flexible budget may be prepared:

Before the operating period only.

After the operating period only.

During the operating period only.

At any time in the planning period.

Only when the company encounters excessive costs.

10) A company provided the following direct materials cost information. Compute the 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

$2,500 Favorable.

$78,250 Favorable.

$78,250 Unfavorable.

$80,750 Favorable.

$80,750 Unfavorable.