TF 1. When more hours of labor time are necessary to complete a job than the standard allows, the labor rate variance is unfavorable. When more hours of labor time are necessary to complete a job than the standard allows, the labor rate variance is unfavorable. A) True B) False 2. The materials price variance is computed by multiplying the difference between the actual price and the standard price by the actual quantity of materials used in production. The materials price variance is computed by multiplying the difference between the actual price and the standard price by the actual quantity of materials used in production. A) True B) False MC 3. Landram Corporation makes a product with the following standard costs: In March the company produced 4,700 units using 10,230 kilos of the direct material and 2,210 direct labor-hours. During the month, the company purchased 10,800 kilos of the dire TB 104 Landram Corporation makes a product with the following standard costs: Picture In March the company produced 4,700 units using 10,230 kilos of the direct material and 2,210 direct labor-hours. During the month, the company purchased 10,800 kilos of the direct material at a cost of $76,680. The actual direct labor cost was $38,233 and the actual variable overhead cost was $11,934. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead rate variance for March is: A) $884 U B) $884 F C) $940 U D) $940 F 4. The Litton Company has established standards as follows: Direct material: 3 pounds per unit @ $4 per pound = $12 per unit Direct labor: 2 hours per unit @ $8 per hour = $16 per unit Variable manufacturing overhead: 2 hours per unit @ $5 per hour = $ TB 46 The Litton Company has established standards as follows: Direct material: 3 pounds per unit @ $4 per pound = $12 per unit Direct labor: 2 hours per unit @ $8 per hour = $16 per unit Variable manufacturing overhead: 2 hours per unit @ $5 per hour = $10 per unit Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased. Picture The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours. The materials price variance is: A) $400 U B) $400 F C) $600 F D) $600 U 5. Gentile Corporation makes a product with the following standard costs: The company produced 6,000 units in May using 36,970 kilos of direct material and 4,340 direct labor-hours. During the month, the company purchased 40,400 kilos of the direct mat TB 79 Gentile Corporation makes a product with the following standard costs: Picture The company produced 6,000 units in May using 36,970 kilos of direct material and 4,340 direct labor-hours. During the month, the company purchased 40,400 kilos of the direct material at $4.70 per kilo. The actual direct labor rate was $13.70 per hour and the actual variable overhead rate was $2.70 per hour. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead efficiency variance for May is: A) $1,380 F B) $1,242 U C) $1,242 F D) $1,380 U 6. The following standards for variable manufacturing overhead have been established for a company that makes only one product: The following data pertain to operations for the last month: What is the variable overhead efficiency variance for the month TB 140 The following standards for variable manufacturing overhead have been established for a company that makes only one product: Picture The following data pertain to operations for the last month: Picture What is the variable overhead efficiency variance for the month? A) $3,192 U B) $6,913 F C) $7,161 U D) $6,913 U 7. Fabiano Corporation makes a product whose direct labor standards are 0.5 hours per unit and $23.00 per hour. In February the company produced 3,300 units using 1,640 direct labor-hours. The actual direct labor cost was $38,540. The labor rate varian TB 139 Fabiano Corporation makes a product whose direct labor standards are 0.5 hours per unit and $23.00 per hour. In February the company produced 3,300 units using 1,640 direct labor-hours. The actual direct labor cost was $38,540. The labor rate variance for February is: A) $825 U B) $820 U C) $820 F D) $825 F 8. Fraize Corporation makes a product that uses a material with the quantity standard of 9.5 kilos per unit of output and the price standard of $4.00 per kilo. In July the company produced 7,000 units using 68,850 kilos of the direct material. During t TB 122 Fraize Corporation makes a product that uses a material with the quantity standard of 9.5 kilos per unit of output and the price standard of $4.00 per kilo. In July the company produced 7,000 units using 68,850 kilos of the direct material. During the month the company purchased 73,600 kilos of the direct material at $3.70 per kilo. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for July is: A) $9,400 U B) $8,695 U C) $9,400 F D) $8,695 F 9. The Litton Company has established standards as follows: Direct material: 3 pounds per unit @ $4 per pound = $12 per unit Direct labor: 2 hours per unit @ $8 per hour = $16 per unit Variable manufacturing overhead: 2 hours per unit @ $5 per hour = $ TB 51 The Litton Company has established standards as follows: Direct material: 3 pounds per unit @ $4 per pound = $12 per unit Direct labor: 2 hours per unit @ $8 per hour = $16 per unit Variable manufacturing overhead: 2 hours per unit @ $5 per hour = $10 per unit Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased. Picture The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours. The variable overhead efficiency variance is: A) $520 F B) $520 U C) $500 U D) $500 F 10. Snuggs Corporation makes a product with the following standard costs: The company reported the following results concerning this product in October. The company applies variable overhead on the basis of direct labor-hours. The direct materials purch TB 64 Snuggs Corporation makes a product with the following standard costs: Picture The company reported the following results concerning this product in October. Picture The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The materials price variance for October is: A) $620 F B) $616 F C) $616 U D) $620 U 11. 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? TB 130 The following labor standards have been established for a particular product: Picture The following data pertain to operations concerning the product for the last month: Picture What is the labor rate variance for the month? A) $400 F B) $80 U C) $80 F D) $400 U 12. Landram Corporation makes a product with the following standard costs: In March the company produced 4,700 units using 10,230 kilos of the direct material and 2,210 direct labor-hours. During the month, the company purchased 10,800 kilos of the dire TB 102 Landram Corporation makes a product with the following standard costs: Picture In March the company produced 4,700 units using 10,230 kilos of the direct material and 2,210 direct labor-hours. During the month, the company purchased 10,800 kilos of the direct material at a cost of $76,680. The actual direct labor cost was $38,233 and the actual variable overhead cost was $11,934. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The labor rate variance for March is: A) $3,757 U B) $3,757 F C) $3,995 U D) $3,995 F 13. Snuggs Corporation makes a product with the following standard costs: The company reported the following results concerning this product in October. The company applies variable overhead on the basis of direct labor-hours. The direct materials purch TB 66 Snuggs Corporation makes a product with the following standard costs: Picture The company reported the following results concerning this product in October. Picture The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The labor rate variance for October is: A) $495 U B) $495 F C) $525 U D) $525 F 14. The Thompson Company uses standard costing and has established the following direct material and direct labor standards for each unit of Lept. Direct materials: 2 gallons at $4 per gallon Direct labor: 0.5 hours at $8 per hour During September, the TB 112 The Thompson Company uses standard costing and has established the following direct material and direct labor standards for each unit of Lept. Direct materials: 2 gallons at $4 per gallon Direct labor: 0.5 hours at $8 per hour During September, the company made 6,000 Lepts and incurred the following costs: Direct materials purchased: 13,400 gallons at $4.10 per gallon Direct materials used: 12,600 gallons Direct labor used: 2,800 hours at $7.65 per hour The labor efficiency variance for September was: A) $33,600 favorable B) $1,600 favorable C) $22,400 favorable D) $3,200 favorable 15. Hickory Corporation, which produces commercial safes, has provided the following data: Supplies cost is an element of variable manufacturing overhead. The variable overhead rate variance for supplies is closest to: TB 150 Hickory Corporation, which produces commercial safes, has provided the following data: Picture Supplies cost is an element of variable manufacturing overhead. The variable overhead rate variance for supplies is closest to: A) $47,251 F B) $42,901 U C) $47,251 U D) $42,901 F 16. When computing standard cost variances, the difference between actual and standard price multiplied by actual quantity yields a(n): TB 11 When computing standard cost variances, the difference between actual and standard price multiplied by actual quantity yields a(n): A) combined price and quantity variance. B) efficiency variance. C) price variance. D) quantity variance. 17. The Litton Company has established standards as follows: Direct material: 3 pounds per unit @ $4 per pound = $12 per unit Direct labor: 2 hours per unit @ $8 per hour = $16 per unit Variable manufacturing overhead: 2 hours per unit @ $5 per hour = $ TB 50 The Litton Company has established standards as follows: Direct material: 3 pounds per unit @ $4 per pound = $12 per unit Direct labor: 2 hours per unit @ $8 per hour = $16 per unit Variable manufacturing overhead: 2 hours per unit @ $5 per hour = $10 per unit Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased. Picture The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours. The variable overhead rate variance is: A) $240 U B) $220 U C) $220 F D) $240 F 18. Caquias Corporation makes a product with the following standard costs: The company reported the following results concerning this product in August. The company applies variable overhead on the basis of direct labor-hours. The direct materials purch TB 91 Caquias Corporation makes a product with the following standard costs: Picture The company reported the following results concerning this product in August. Picture The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead efficiency variance for August is: A) $200 F B) $205 U C) $205 F D) $200 U 19. The following standards for variable manufacturing overhead have been established for a company that makes only one product: The following data pertain to operations for the last month: What is the variable overhead efficiency variance for the month TB 36 The following standards for variable manufacturing overhead have been established for a company that makes only one product: Picture The following data pertain to operations for the last month: Picture What is the variable overhead efficiency variance for the month? A) $9,219 U B) $10,179 U C) $9,867 U D) $648 U 20. Arrow Industries uses a standard cost system in which direct materials inventory is carried at standard cost. Arrow has established the following standards for the prime costs of one unit of product. During May, Arrow purchased 160,000 pounds of dir TB 107 Arrow Industries uses a standard cost system in which direct materials inventory is carried at standard cost. Arrow has established the following standards for the prime costs of one unit of product. Picture During May, Arrow purchased 160,000 pounds of direct material at a total cost of $304,000. The total direct labor wages for May were $37,800. Arrow manufactured 19,000 units of product during May using 142,500 pounds of direct material and 5,000 direct labor-hours. The direct labor rate variance for May is: A) $2,200 favorable B) $1,900 unfavorable C) $2,000 unfavorable D) $2,090 favorable