What is the materials purchase price variance

Question

1.Ideal standards do not allow for machine breakdowns and other normal inefficiencies.

• True
• False

2. Jeffs Corporation is developing direct labor standards. The basic direct labor wage rate is $14.00 per hour. Employment taxes are 11% of the basic wage rate. Fringe benefits are $3.24 per direct labor-hour. The standard rate per direct labor-hour should be:

• $14.00
• $9.22
• $4.78
• $18.78

3. A manufacturing cycle efficiency (MCE) of greater than one is impossible.

• True
• False

4. Matt Company uses a standard cost system. Information for raw materials for Product RBI for the month of October follows:What is the materials purchase price variance?

• $90 favorable
• $90 unfavorable
• $100 favorable
• $100 unfavorable

5. Inspection Time is generally considered to be value-added time.

• True
• False

6. Magno Cereal Corporation uses a standard cost system to collect costs related to the production of its "crunchy pickle" cereal. The pickle (materials) standards for each batch of cereal produced are 1.4 pounds of pickles at a standard cost of $3.00 per pound. During the month of August, Magno purchased 78,000 pounds of pounds at a total cost of $253,500. Magno used all of these pickles to produce 60,000 batches of cereal. What is Magno's materials quantity variance for the month of August?

7. 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?

• $687 F
• $2,106 F
• $1,410 F
• $2,106 U

8. Warp Manufacturing Corporation uses a standard cost system to collect costs related to the production of its ski lift chairs. Warp uses machine hours as an overhead base. The variable overhead standards for each chair are 1.2 machine hours at a standard cost of $18 per hour.

During the month of September, Warp incurred 34,000 machine hours in the production of 32,000 ski lift chairs. The total variable overhead cost was $649,400. What is Warp's variable overhead spending variance for the month of September?

9. Pinkton Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear belowThe delivery cycle time was:

• 8.7 hours
• 3.6 hours
• 22 hours
• 22.7 hours

10. Schapp Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below:The throughput time was:

• 11.3 hours
• 21.7 hours
• 17.2 hours
• 4.5 hours

11. Simkin Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below:The manufacturing cycle efficiency (MCE) was closest to:

• 0.46
• 0.06
• 0.20
• 0.19

12. Longview Hospital performs blood tests in its laboratory. The following standards have been set for each blood test performed:During May, the laboratory performed 1,500 blood tests. On May 1 there were no direct materials (plates) on hand; after a plate is used for a blood test it is discarded. Variable overhead is assigned to blood tests on the basis of direct labor hours. The following events occurred during May:

· 3,600 plates were purchased for $9,540
· 3,200 plates were used for blood tests
· 340 actual direct labor hours were worked at a cost of $5,550
The labor efficiency variance for May is:

• $600 F
• $600 U
• $515 U
• $515 F

13. The purpose of a flexible budget is to:

• allow management some latitude in meeting goals.
• eliminate fluctuations in production reports by ignoring variable costs.
• compare actual and budgeted results at virtually any level of activity.
• reduce the time to prepare the annual budget.

14. Sharifi Hospital bases its budgets on patient-visits. The hospital's static budget for October appears below:The total overhead cost at an activity level of 9,200 patient-visits per month should be:

• $260,360
• $250,070
• $249,300
• $240,550

15. Alapai Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company has provided the following data for the most recent month:

What was the total of the variable overhead spending and fixed overhead budget variances for the month?

• $3,720 favorable
• $2,280 unfavorable
• $1,840 favorable
• $1,880 unfavorable