Question 1:
The following labor standards have been established for a particular product:
Labor hours per unit of output 4.5 hours
Standard labor rate $19.70
The following data pertain to operations concerning the product for the last month:
Actual hourworked 6500
Actual total labor cost $130975
Actual output 1400 units
Required:
a. What is the labor rate variance for the month?
b. What is the labor efficiency variance for the month?
Question 2:
Karmazyn Hospital bases its budgets on patient-visits. The hospital's static budget for October appears below:
|
Budgeted number of patient visits
|
8,900
|
|
Budgeted variable costs:
|
|
|
Supplies @ $9.00 per patient visit
|
$80,100
|
|
Laundry @ $8.70 per patient visit
|
77,430
|
|
Total variable cost
|
157.530
|
|
Budgeted fixed costs:
|
|
|
Wages and salaries
|
99,680
|
|
Occupancy costs
|
107,690
|
|
Total fixed costs
|
207,370
|
|
Total costs
|
$364,900
|
The total variable cost at the activity level of 9,000 patient-visits per month should be:
$157,530
$209,700
$207,370
$159,300
Question 3:
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.
| Units produced |
600 units |
| Direct materials used |
2,000 pounds |
| Direct material purchased (3,000 pounds) |
$11,400 |
| Direct labor cost (1,100 hours) |
$9,240 |
| Variable manufacturing overhead costs incurred |
$5,720 |
The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours.
The labor efficiency variance is:
$800 F
$800 U
$840 F
$840 U
Question 4:
Edington Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 2,800 client-visits, but its actual level of activity was 2,850 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting for September:
|
Revenue
|
Fixed
Element
per
Month
|
Variable
Element
per
Client Visit
|
|
|
$39.60
|
|
Personnel expense
|
$31,700
|
$12.40
|
|
Medical supplies
|
800
|
4.90
|
|
Occupancy expenses
|
7,000
|
2.20
|
|
Administrative expenses
|
6,200
|
0.10
|
|
Total expenses
|
$45,700
|
$19.60
|
The personnel expenses in the planning budget for September would be closest to:
$62,946
$67,040
$66,420
$64,070
Question 5:
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.
|
Units produced 600 units
|
|
Direct materials used 2,000 pounds
|
|
Direct material purchased (3,000 pounds) $11,400
|
|
Direct labor cost (1,100 hours) $9,240
|
|
Variable manufacturing overhead costs incurred $5,720
|
The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours.
The variable overhead efficiency variance is:
$520 F
$520 U
$500 U
$500 F
Question 6:
The Porter Company has a standard cost system. In July the company purchased and used 22,500 pounds of direct material at an actual cost of $53,000; the materials quantity variance was $1,875 Unfavorable; and the standard quantity of materials allowed for July production was 21,750 pounds. The materials price variance for July was:
$2,725 F
$2,725 U
$3,250 F
$3,250 U
Question 7: Karmazyn Hospital bases its budgets on patient-visits. The hospital's static budget for October appears below:
|
Budgeted number of patient visits
|
8,900
|
|
Budgeted variable costs:
|
|
|
Supplies @ $9.00 per patient visit
|
$80,100
|
|
Laundry @ $8.70 per patient visit
|
77,430
|
|
Total variable cost
|
157.530
|
|
Budgeted fixed costs:
|
|
|
Wages and salaries
|
99,680
|
|
Occupancy costs
|
107,690
|
|
Total fixed costs
|
207,370
|
|
Total costs
|
$364,900
|
The total cost at the activity level of 9,200 patient-visits per month should be:
$364,900
$377,200
$370,770
$370,210
Question 8: Lotson Corporation bases its budgets on machine-hours. The company's static planning budget for May appears below:
|
Budgeted number of machine hours
|
9,600
|
|
Supplies @ $1.10 per machine hour
|
$10,560
|
|
Power @ $8.70 per machine hour
|
83,520
|
|
Salaries
|
13,440
|
|
Equipment depreciation
|
116,160
|
|
Total
|
$223,680
|
Actual results for the month were:
|
Actual results the month:
|
|
|
Actual number of machine hours
|
9,900
|
|
Supplies
|
$10,290
|
|
Power
|
$87,680
|
|
Salaries
|
$13,280
|
|
Equipment depreciation
|
$116,480
|
The spending variance for power costs for the month should be:
$1,550 F
$4,160 F
$1,550 U
$4,160 U
Question 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 = $10 per unit
Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased.
| Units produced |
600 units |
| Direct materials used |
2,000 pounds |
| Direct material purchased (3,000 pounds) |
$11,400 |
| Direct labor cost (1,100 hours) |
$9,240 |
| Variable manufacturing overhead costs incurred |
$5,720 |
The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours.
The materials price variance is:
$400 U
$400 F
$600 F
$600 U
Question 10: Lotson Corporation bases its budgets on machine-hours. The company's static planning budget for May appears below:
|
Budgeted number of machine hours
|
9,600
|
|
Supplies @ $1.10 per machine hour
|
$10,560
|
|
Power @ $8.70 per machine hour
|
83,520
|
|
Salaries
|
13,440
|
|
Equipment depreciation
|
116,160
|
|
Total
|
$223,680
|
Actual results for the month were:
|
Actual results the month:
|
|
|
Actual number of machine hours
|
9,900
|
|
Supplies
|
$10,290
|
|
Power
|
$87,680
|
|
Salaries
|
$13,280
|
|
Equipment depreciation
|
$116,480
|
The spending variance for supplies costs for the month should be:
$600 U
$600 F
$270 F
$270 U
Question 11:
Lotson Corporation bases its budgets on machine-hours. The company's static planning budget for May appears below:
|
Budgeted number of machine hours
|
9,600
|
|
Supplies @ $1.10 per machine hour
|
$10,560
|
|
Power @ $8.70 per machine hour
|
83,520
|
|
Salaries
|
13,440
|
|
Equipment depreciation
|
116,160
|
|
Total
|
$223,680
|
Actual results for the month were:
|
Actual results the month:
|
|
|
Actual number of machine hours
|
9,900
|
|
Supplies
|
$10,290
|
|
Power
|
$87,680
|
|
Salaries
|
$13,280
|
|
Equipment depreciation
|
$116,480
|
The spending variance for equipment depreciation for the month should be:
$320 F
$3,310 U
$320 U
$3,310 F
Question 12: 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.
| Units produced |
600 units |
| Direct materials used |
2,000 pounds |
| Direct material purchased (3,000 pounds) |
$11,400 |
| Direct labor cost (1,100 hours) |
$9,240 |
| Variable manufacturing overhead costs incurred |
$5,720 |
The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours.
The labor rate variance is:
$480 F
$480 U
$440 F
$440 U
Question 13:
Gradert Framing's cost formula for its supplies cost is $1,540 per month plus $12 per frame. For the month of September, the company planned for activity of 668 frames, but the actual level of activity was 666 frames. The actual supplies cost for the month was $9,980. The supplies cost in the planning budget for September would be closest to:
$10,010
$9,532
$9,556
$9,980
Question 14:
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.
| Units produced |
600 units |
| Direct materials used |
2,000 pounds |
| Direct material purchased (3,000 pounds) |
$11,400 |
| Direct labor cost (1,100 hours) |
$9,240 |
| Variable manufacturing overhead costs incurred |
$5,720 |
The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours.
The materials quantity variance is:
$800 U
$4,000 U
$760 U
$760 F
Question 15: The following labor standards have been established for a particular product:
Labor hours per unit of output 4.5 hours
Standard labor rate $12.30
The following data pertain to operations concerning the product for the last month:
Actual hourworked 7100
Actual total labor cost $89105
Actual output 1500 units
What is the labor efficiency variance for the month?
$13,805 U
$13,530 U
$15,305 U
$15,305 F
Question 16: Celius Midwifery's cost formula for its wages and salaries is $2,410 per month plus $292 per birth. For the month of March, the company planned for activity of 113 births, but the actual level of activity was 116 births. The actual wages and salaries for the month was $35,340. The spending variance for wages and salaries in March would be closest to:
$942 F
$66 F
$66 U
$942 U
Question 17: The following standards for variable manufacturing overhead have been established for a company that makes only one product:
Labor hours per unit of output 2.7 hours
Standard labor rate $13.05
The following data pertain to operations for the last month:
Actual hour 2400
Actual total labor cost $30360
Actual output 600 units
What is the variable overhead efficiency variance for the month?
$9,219 U
$10,179 U
$9,867 U
$648 U
Question 18: 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.
| Units produced |
600 units |
| Direct materials used |
2,000 pounds |
| Direct material purchased (3,000 pounds) |
$11,400 |
| Direct labor cost (1,100 hours) |
$9,240 |
| Variable manufacturing overhead costs incurred |
$5,720 |
The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours.
The variable overhead rate variance is:
$240 U
$220 U
$220 F
$240 F
Question 19:
Farver Air uses two measures of activity, flights and passengers, in the cost formulas in its flexible budgets. The cost formula for plane operating costs is $44,420 per month plus $2,008 per flight plus $1 per passenger. The company expected its activity in May to be 80 flights and 281 passengers, but the actual activity was 81 flights and 277 passengers. The actual cost for plane operating costs in May was $199,650. The spending variance for plane operating costs in May would be closest to:
$5,691 F
$7,695 U
$7,695 F
$5,691 U