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Exam 11: Relevant Costs for Decision Making

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Question 41

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Andy Inc.is a business using a standard costing system and applying overhead cost based on direct labour-hours.For April,total fixed overhead cost was budgeted at $80,000 based on a denominator activity level of 20,000 direct labour-hours for the month.The standard cost card indicates that each unit of finished product requires 2 direct labour-hours.The following data are available for April's activity: What amount of total overhead cost would have been applied to production for the month of April?

A) $76,000.
B) $78,000.
C) $79,500.
D) $80,000.

E) A) and B)
F) A) and C)

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Question 42

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A positive revenue variance is favourable and a positive cost variance is favourable.

A) True
B) False

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Question 43

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What is the materials quantity variance for the month?

The following materials standards have been established for a particular product:

The fixed overhead budget variance is measured by:

What is the materials quantity variance for the month?

The variable overhead spending variance for May was:

The materials price variance for January is:

What is the materials price variance for the month?

The materials quantity variance is:

The terms "standard quantity allowed" or "standard hours allowed" mean:

The Porter Company has a standard cost system.In July the company purchased and used 22,500 grams of direct material at an actual cost of $53,000;the materials quantity variance was $1,875 unfavourable;and the standard quantity of materials allowed for July production was 21,750 grams.The materials price variance for July was?

Lab Corp.uses a standard cost system.Direct labour information for Product CER for the month of October follows: What are the actual hours worked?

The flexible budget variance is the difference between the actual results and the flexible-budget amount for the actual levels of the revenue and cost drivers.

Marjorie Décor is a custom home designer for drapery.The standard material allowed for each window is 0.5 of medium quality material,which has a standard cost of $10 per kilogram.The current operating budget is based on production of 112,000 windows with 1.0 machine hours allowed per window.Variable overhead is anticipated to be $1,792,000.Actual production was 116,000 using 120,000 machine hours.Actual variable costs were $15 per machine hour. Required: a.Determine the spending variance b.Determine the efficiency variance

The following labour standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: What is the labour efficiency variance for the month?

One cause of an unfavourable overhead volume variance would be increases in cost for fixed overhead items.

If a company using a flexible budget has a sales revenue variance,the variance results solely from differences in budgeted versus actual selling prices.

Jimbob Co.uses flexible budgeting to control overhead costs.Its budgeted variable overhead costs per machine hour are as follows:

Albert Manufacturing Company manufactures a single product.The standard cost of one unit of this product is: