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Exam 9: Flexible Budgets Standard Costs and Variance Analysis

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Question 161

True/False

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A revenue variance is unfavorable if the revenue in the static planning budget is less than the revenue in the flexible budget.

A) True
B) False

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Question 162

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The net operating income in the flexible budget for January would be closest to:

A) $13,878
B) $13,788
C) $12,963
D) $13,070

E) B) and D)
F) B) and C)

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Question 163

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The variable overhead rate variance for supplies is closest to:

Freytag Corporation's variable overhead is applied on the basis of direct labor-hours.The company has established the following variable overhead standards for product N06C: The following data pertain to the most recent month's operations during which 1,600 units of product N06C were made: Required: a.What was the variable overhead rate variance for the month? b.What was the variable overhead efficiency variance for the month?

The personnel expenses in the planning budget for September would be closest to:

The variable overhead rate variance for January is:

When the materials price variance is recorded at the time of purchase, raw materials are recorded as inventory at standard cost.

The variable overhead rate variance for March is:

The labor efficiency variance for the month is closest to:

The variable overhead efficiency variance does not actually measure how efficiently variable manufacturing overhead resources were used.

The variable overhead efficiency variance for June is:

Zanny Electronics Corporation uses a standard cost system for the production of its water ski radios.The direct labor standard for each radio is 0.9 hours.The standard direct labor cost per hour is $7.20. During the month of August, Zanny's water ski radio production used 6,600 direct labor-hours at a total direct labor cost of $48,708.This resulted in production of 6,900 water ski radios for August.What is Zanny's labor rate variance for August?

Ostler Hotel bases its budgets on guest-days.The hotel's static budget for April appears below: The total overhead cost at an activity level of 9,700 guest-days per month should be:

The variable overhead efficiency variance for the month is closest to:

The spending variance for medical supplies in September would be closest to:

If demand is insufficient to keep everyone busy and workers are not laid off, an unfavorable (U)variable overhead efficiency variance often will be a result unless managers build excessive inventories.

What is the labor efficiency variance for the month?

The spending variance for supplies costs for the month is:

Doby Corporation makes a product with the following standard costs: In July the company produced 4,800 units using 13,450 ounces of the direct material and 970 direct labor-hours.During the month the company purchased 14,600 ounces of the direct material at a price of $7.20 per ounce.The actual direct labor rate was $16.20 per hour and the actual variable overhead rate was $5.40 per hour.The materials price variance is computed when materials are purchased.Variable overhead is applied on the basis of direct labor-hours. Required: a.Compute the materials quantity variance. b.Compute the materials price variance. c.Compute the labor efficiency variance. d.Compute the labor rate variance. e.Compute the variable overhead efficiency variance. f.Compute the variable overhead rate variance.

The total expenses in the flexible budget for October would have been closest to: