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Mdulo 7: Sistema de costo estndar, presupuesto flexible y anlisis de variaciones MULTIPLE CHOICE QUESTIONS AND EXERCISES I.Multiple Choice: Choose the correct answer by writing the appropriate letter in the space provided. THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 1 and 2. JJ White planned to use $82 of material per unit but actually used $80 of material per unit, and planned to make 1,200 units but actually made 1,000 units. ______1. The flexible-budget amount is a. $80,000. b. $82,000. c. $96,000. d. $98,400. ______2. The flexible-budget variance is a. $2,000 favorable. b. $14,000 unfavorable. c. $16,400 unfavorable. d. $2,400 favorable. THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 3 THROUGH 7. Robb Industries Inc. (RII) developed standard costs for direct material and direct labor. In 2004, RII estimated the following standard costs for one of their major products, the 10-gallon plastic container. Budgeted quantity Budgeted price Direct materials 0.10 pounds $30 per pound Direct labor 0.05 hours $15 per hour During June RII produced and sold 5,000 containers using 490 pounds of direct materials at an average cost per pound of $32 and 250 direct manufacturing labor-hours at an average wage of $15.25 per hour. ______3. June's direct material flexible-budget variance is a. $980 unfavorable. b. $300 favorable. c. $680 unfavorable. d. none of the above. ______4. June's direct material price variance is a. $980 unfavorable. b. $300 favorable. c. $680 favorable. d. none of the above. ______5. June's direct material efficiency variance is a. $980 unfavorable. b. $300 favorable. c. $680 favorable. d. none of the above. ______6. June's direct manufacturing labor price variance is a. $62.50 unfavorable. b. $62.50 favorable. c. $3,811.75 unfavorable. d. none of the above. ______7. June's direct manufacturing labor efficiency variance is a. $62.50 unfavorable. b. $62.50 favorable. c. $3,811.75 unfavorable. d. none of the above. ______8. A standard cost is a. a cost which is paid for a group of similar products. b. the average cost in an industry. c. a predetermined cost. d. the historical cost of producing a product last year. ______9. An unfavorable materials quantity variance would occur if a. more materials were purchased than were used. b. actual pounds of materials used were less than the standard pounds allowed. c. actual labor hours used were greater than the standard labor hours allowed. d. actual pounds of materials used were greater than the standard pounds allowed. ______10. If actual costs are greater than standard costs, there is a(n) a. b. c. d. normal variance. unfavorable variance. favorable variance. error in the accounting system. THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 11 THROUGH 16. Sawyer Industries Inc. (SII) developed standard costs for direct material and direct labor. In 2004, SII estimated the following standard costs for one of their major products, the 30-gallon heavy-duty plastic container. Budgeted quantity Budgeted price Direct materials 0.20 pounds $25 per pound Direct labor 0.10 hours $15 per hour During July SII produced and sold 10,000 containers using 2,200 pounds of direct materials at an average cost per pound of $24 and 1,050 direct manufacturing labor hours at an average wage of $14.75 per hour. ______11. July's direct material flexible-budget variance is a. $2,800 unfavorable. b. $2,200 favorable. c. $5,000 unfavorable. d. none of the above. ______12. July's direct material price variance is a. $2,800 favorable. b. $2,200 favorable. c. $5,000 unfavorable. d. none of the above. ______13. July's direct material efficiency variance is a. $2,800 unfavorable. b. $2,200 favorable. c. $5,000 unfavorable. d. none of the above. ______14. July's direct manufacturing labor flexible-budget variance is a. $750.00 unfavorable. b. $262.50 favorable. c. $487.50 unfavorable. d. none of the above. ______15. July's direct manufacturing labor price variance is a. $750.00 unfavorable. b. $262.50 favorable. c. $487.50 favorable. d. none of the above. ______16. July's direct manufacturing labor efficiency variance is a. $750.00 unfavorable. b. $262.50 favorable. c. $487.50 favorable. d. none of the above. ______17. The formula for the materials price variance is a. (AQ SP) - (SQ SP). b. (AQ AP) - (AQ SP). c. (AQ AP) - (SQ SP). d. (AQ SP) - (SQ AP). ______18. The formula for the materials quantity variance is a. (SQ AP) - (SQ SP). b. (AQ AP) - (AQ SP). c. (AQ SP) - (SQ SP). d. (AQ AP) - (SQ SP). ______19. An unfavorable labor quantity variance may be caused by a. paying workers higher wages than expected. b. misallocation of workers. c. worker fatigue or carelessness. d. higher pay rates mandated by union contracts. ______20. If 30,000 pounds of direct materials are purchased for $21,600 on account and the standard cost is $.70 per pound, the journal entry to record the purchase is a. Raw Materials Inventory .............................................. 21,600 Accounts Payable ................................................. 21,600 b. Work In Process Inventory .......................................... 21,600 Accounts Payable ................................................. 21,000 Materials Quantity Variance ................................ 600 c. Raw Materials Inventory .............................................. 21,600 Accounts Payable ................................................. 21,000 Materials Price Variance ...................................... 600 d. Raw Materials Inventory .............................................. 21,000 Materials Price Variance .............................................. 600 Accounts Payable ................................................. 21,600 ______21. Debit balances in variance accounts represent a. unfavorable variances. b. favorable variances. c. favorable for price variances; unfavorable for quantity variances. d. favorable for quantity variances; unfavorable for price variances. ______22. The formula for the labor price variance is a. b. c. d. (AH) x (SR) less (SH) x (SR). (AH) x (AR) less (AH) x (SR). (AH) x (AR) less (SH) x (SR). (AH) x (SR) less (AH) x (SR). II. Solve the following exercises: Show computations. Exercise 1 Reagan Company planned to produce 25,000 units of product and work 100,000 direct labor hours in 2005. Manufacturing overhead at the 100,000 direct labor hours level of activity was estimated to be: Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing overhead $ 700,000 300,000 $1,000,000 At the end of 2005, 24,000 units of product were actually produced and 107,000 actual direct labor hours were worked. Total actual overhead costs for 2005 were $947,000. Instructions (a) Compute the total overhead variance. (b) Compute the overhead controllable variance. (c) Compute the overhead volume variance. Use the following formulas for the solution of exercise 1 (a) Actual overhead - Overhead applied = Total overhead variance Overhead applied = 24,000 units 4 hrs = 96,000 standard hours allowed 96,000 $10 = $960,000 (b) Actual overhead - Overhead budgeted = Overhead controllable variance Overhead budgeted at 96,000 actual direct labor hours allowed. Variable overhead (96,000 $7) Fixed overhead $672,000 300,000 $972,000 (c) (Normal hours - Standard hours) Fixed overhead rate = Overhead volume variance Exercise 2 Presented below is a flexible manufacturing budget for Waner Company, which manufactures fine timepieces: Activity Index: Standard direct labor hours Variable costs Indirect materials Indirect labor Utilities Total variable Fixed costs Supervisory salaries Rent Total fixed Total costs 2,000 3,200 3,600 4,000 $ 4,000 2,300 3,200 9,500 $ 6,400 3,680 5,120 15,200 $ 7,200 4,140 5,760 17,100 $ 8,000 4,600 6,400 19,000 1,000 3,000 4,000 $13,500 1,000 3,000 4,000 $19,200 1,000 3,000 4,000 $21,100 1,000 3,000 4,000 $23,000 The company applies the overhead on the basis of direct labor hours at $6.00 per direct labor hour and the standard hours per timepiece is 1/2 hour each. The company's actual production was 5,600 timepieces with 2,900 actual hours of direct labor. Actual overhead was $17,700. Instructions (a) Compute the controllable and volume overhead variances. (b) Prepare the entries for manufacturing overhead during the period and the entry to recognize the overhead variances at the end of the period. Exercise 3 The standard cost of Product 245 manufactured by Starr Company includes 2 pounds of direct materials at $5.00 per pound. During September, 60,000 pounds of direct materials are purchased at a cost of $4.80 per pound, and all of the direct materials are used to produce 29,000 units of Product 245. Instructions (a) Compute the materials price and quantity variances. (b) Journalize the purchase of the materials and the issuance of the materials, assuming a standard cost system is used. Exercise 4 Lankford Company's standard labor cost of producing one unit of product is 2 hours at the rate of $14.00 per hour. During February, 77,000 hours of labor are incurred at a cost of $13.80 per hour to produce 38,000 units of product. Instructions (a) Compute the labor price and labor quantity variances. (b) Journalize the incurrence of the labor costs and the assignment of direct labor to production, assuming a standard cost system is used. Sistema justo a tiempo y Sistema de costo descargado MULTIPLE CHOICE QUESTIONS AND EXERCISE I. Multiple Choice: Choose the correct answer by writing the appropriate letter in the space provided. ______1. A demand-pull system in which each component in a production line is produced immediately as needed by the next step in the production line is referred to as a. just-in-time purchasing. b. materials requirements planning. c. relevant total costs. d. economic order quantity. ______2. A costing system that omits recording some or all of the journal entries relating to the cycle from purchase of direct materials to the sale of finished goods is called a. dependent costing. b. synchronous costing. c. sequential costing. d. backflush costing. THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 3 THROUGH 5. Games R Us manufactures various games. For March, there were no beginning inventories of direct materials and no beginning or ending work in process. Conversion costs is the only indirect manufacturing cost category currently used. Journal entries are recorded when materials are purchased and when conversion costs are allocated under backflush costing. Conversion costs - March Direct materials purchased - March Units produced - March Units sold - March $ 800,000 $2,140,000 117,600 83,600 ______3. Which of the following journal entries properly records the purchase of direct materials? a. Accounts Payable Control 2,140,000 Inventory: Raw and In-Process Control 2,140,000 b. Inventory: Raw and In-Process Control 2,140,000 Accounts Payable Control 2,140,000 c. d. Inventory: Raw and In-Process Control Conversion Costs Control Conversion Costs Control Inventory: Raw and In-Process Control 2,140,000 2,140,000 2,140,000 ______4. Which of the journal entries properly records conversion costs? a. Conversion Costs Control 800,000 Various Accounts b. Various Accounts 800,000 Conversion Costs Control c. Conversion Costs Control 800,000 Inventory: Direct Materials d. Inventory: Direct Materials 800,000 Conversion Costs Control 2,140,000 800,000 800,000 800,000 800,000 ______5. Which of the following entries properly records the cost of goods sold for the month? a. Finished Goods Control 2,090,000 Work in Process Control 2,090,000 b. Cost of Goods Sold 2,090,000 Finished Goods Control 2,090,000 c. Finished Goods Control 2,090,000 Cost of Goods Sold 2,090,000 d. Cost of Goods Sold 2,090,000 Work in Process Control 2,090,000 II. Solve the following exercise: 1. Tornado Electronics manufactures stereos. All processing is initiated when an order is received. For April there were no beginning inventories. Conversion Costs and Direct Materials are the only manufacturing cost accounts. Direct Materials are purchased under a just-in-time system. Backflush costing is used with a finished goods trigger point. Additional information is as follows: Actual conversion costs Standard materials costs per unit Standard conversion cost per unit Units produced Units sold $232,000 60 140 3,200 2,800 Required: Record all journal entries for the monthly activities related to the above transactions if backflush costing is used