Standard Costing

1.Information on Rex Co.'s direct material costs for May follows:

Actual quantity of direct materials purchased and used. 30,000 pounds

$84,00
Actual cost of direct materials........................................ 0
Unfavorable direct materials quantity variance.............. $3,000
Standard quantity of direct materials allowed for May
production.................................................................... 29,000 pounds

For the month of May, what was Rex's direct materials price variance?

2.Matt Company uses a standard cost system. Information for raw materials for Product RBI for the month
of October follows:

Standard price per pound of raw materials.................. $1.60

Actual purchase price per pound of raw materials....... $1.55
Actual quantity of raw materials purchased................. 2,000 pounds
Actual quantity of raw materials used......................... 1,900 pounds
Standard quantity allowed for actual production......... 1,800 pounds

What is the materials purchase price variance?

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

Standard quantity per unit of output.......... 2.6 meters

Standard price............................................ $10.55 per meter

The following data pertain to operations concerning the product for the last month:

Actual materials purchased........................ 6,000 meters

Actual cost of materials purchased............ $59,400
Actual materials used in production.......... 5,600 meters
Actual output.............................................. 2,200 units

What is the materials quantity variance for the month?

4.Construction Safety Corporation manufactures orange plastic safety suits for road workers. The following
information relates to the corporation's purchases and use of material for the month of April:

Total yards of material

Material purchased................................................. 8,500
Material used in production................................... 8,000
Standard material allowed for suits produced........ 8,200

Construction Safety's materials price variance for April was $1,200 favorable. Its materials quantity

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 variance for April was $900 favorable. What does Construction Safety use as a standard price per yard
of material for its safety suits?

5.Mazzucco Corporation has provided the following data concerning its direct labor costs for September:

Standard wage rate............. $13.30 per DLH

Standard hours................... 5.5 DLHs per unit
Actual wage rate................ $13.20 per DLH
Actual hours....................... 45,880 DLHs
Actual output...................... 8,400 units

The Labor Rate Variance for September would be recorded as a:

A) debit of $4,588.
B) credit of $4,588.
C) credit of $4,620.
D) debit of $4,620.

6.Warmuth Corporation has provided the following data concerning its direct labor costs for September:

Standard wage rate............. $12.00 per DLH

Standard hours................... 8.8 DLHs per unit
Actual wage rate................ $12.50 per DLH
Actual hours....................... 68,120 DLHs
Actual output...................... 6,600 units

The Labor Efficiency Variance for September would be recorded as a:

A) credit of $120,480.
B) debit of $120,480.
C) debit of $125,500.
D) credit of $125,500.

7. In a period, the labor efficiency variance was $54,000 favorable. The standard direct labor wage rate is
$12.00 per hour and 30 direct labor-hours are allowed for each unit of output. Given that 43,500 direct
labor-hours were worked, how many units of output were actually produced?
A) 150
B) 1,300
C) 1,450
D) 1,600

8.The following standards for variable manufacturing overhead have been established for a company that
makes only one product:

Standard hours per unit of output......... 1.2 hours

Standard variable overhead rate........... $10.20 per hour

The following data pertain to operations for the last month:

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 Actual hours............................................... 5,000 hours
Actual total variable overhead cost............ $52,750
Actual output.............................................. 4,000 units

What is the variable overhead efficiency variance for the month?

9.The following standards for variable manufacturing overhead have been established for a company that
makes only one product:

Standard hours per unit of output......... 8.0 hours

Standard variable overhead rate........... $11.55 per hour

The following data pertain to operations for the last month:

Actual hours............................................... 7,000 hours

Actual total variable overhead cost............ $79,100
Actual output.............................................. 600 units

What is the variable overhead spending variance for the month?

10. The Haney Company has a standard costing system. Variable manufacturing overhead is applied on the
basis of direct labor-hours. The following data are available for January:

 Actual variable manufacturing overhead: $25,500

 Actual direct labor-hours worked: 5,800
 Variable overhead spending variance: $600 Favorable
 Variable overhead efficiency variance: $2,475 Unfavorable

The standard hours allowed for January production is:

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Flexible Budget and Overhead Analysis

1. Sharifi Hospital bases its budgets on patient-visits. The hospital's static budget for October appears
below:

Budgeted number of patient-visits............. 8,500

Budgeted variable overhead costs:
Supplies (@$4.70 per patient-visit)........ $ 39,950
Laundry (@$7.80 per patient-visit)........   66,300
Total variable overhead cost......................  106,250
Budgeted fixed overhead costs:
Wages and salaries.................................. 50,150
Occupancy costs.....................................    84,150
Total fixed overhead cost...........................  134,300
Total budgeted overhead cost.................... $240,550

The total overhead cost at an activity level of 9,200 patient-visits per month should be:

2. Andress Footwear Corporation's flexible budget cost formula for supplies, a variable overhead cost,
is $2.17 per unit of output. The company's flexible budget performance report for last month showed
a $4,531 unfavorable variance for supplies. During that month, 19,700 units were produced.
Budgeted activity for the month had been 19,400 units. The actual costs incurred for indirect
materials must have been closest to:

3. Viger 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:

Budgeted level of activity................................................. 9,700 MHs

Actual level of activity..................................................... 9,900 MHs
Cost formula for variable manufacturing overhead cost. . $6.30 per MH
Budgeted fixed manufacturing overhead cost.................. $49,000
Actual total variable manufacturing overhead................. $60,390
Actual total fixed manufacturing overhead...................... $47,000

What was the variable overhead spending variance for the month?

4. 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:

Budgeted level of activity................................................. 7,000 MHs

Actual level of activity..................................................... 7,200 MHs
Cost formula for variable manufacturing overhead cost. . $9.40 per MH
Budgeted fixed manufacturing overhead cost.................. $40,000
Actual total variable manufacturing overhead................. $66,960
Actual total fixed manufacturing overhead...................... $37,000

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

5. Wadding Corporation applies manufacturing overhead to products on the basis of standard machine-
hours. For the most recent month, the company based its budget on 3,600 machine-hours. Budgeted
and actual overhead costs for the month appear below:
Original
Budget
Based
on 3,600
Machine Actual
-Hours Costs
Variable overhead costs:
Supplies....................................... $11,160 $11,830
Indirect labor............................... 26,280 27,970
Fixed overhead costs:
Supervision................................. 19,700 19,340
Utilities........................................ 5,900 5,770
Factory depreciation...................    6,900    7,210
Total overhead cost........................ $69,940 $72,120

The company actually worked 3,900 machine-hours during the month. The standard hours allowed
for the actual output were 3,890 machine-hours for the month. What was the overall variable
overhead efficiency variance for the month?
A) $760 favorable
B) $104 unfavorable
C) $180 favorable
D) $656 favorable

6. Ronda Manufacturing Company uses a standard cost system with machine-hours as the activity base
for overhead. Last year, Ronda incurred $840,000 of fixed manufacturing overhead and generated a
$42,000 favorable fixed overhead budget variance. The following data relate to last year's
operations:

Denominator activity level in machine-hours................. 21,000

Standard machine-hours allowed for actual output........ 20,000
Actual number of machine-hours incurred..................... 22,050

What amount of total fixed manufacturing overhead cost did Ronda apply to production last year?

7. At the beginning of last year, Monze Corporation budgeted $600,000 of fixed manufacturing
overhead and chose a denominator level of activity of 100,000 direct labor-hours. At the end of the
year, Monze's fixed overhead budget variance was $8,000 unfavorable. Its fixed overhead volume
variance was $21,000 favorable. Actual direct labor-hours for the year were 96,000. What was
Monze's actual fixed overhead for last year?

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8. Bagley Company has a standard cost system in which manufacturing overhead is applied to units of
product on the basis of standard machine-hours. The company has provided the following data
concerning its manufacturing overhead costs for last year:

Actual total overhead cost.......................... $260,000

Budgeted fixed overhead cost.................... $180,000
Variable overhead rate............................... $2 per hour
Fixed overhead rate.................................... $6 per hour
Standard hours allowed for the output....... 32,000 hours

The volume variance for the year was:

9. Rodriquez Manufacturing Company uses a standard cost system with machine-hours as the activity
base for overhead. Rodriquez used a denominator activity level of 15,000 machine-hours last year.
At this level, budgeted variable manufacturing overhead totaled $108,000 and budgeted fixed
manufacturing overhead totaled $378,000. During the year, 18,000 machine-hours were actually
incurred. The standard machine-hours allowed for actual output were 20,000. Total actual
manufacturing overhead was $135,000 for variable overhead and $394,200 for fixed overhead.

What is Rodriquez's total under- or overapplied overhead cost?