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Exam 29: Controlling Manufacturing Costs: Standard Costs

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Question 51

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Costs that reflect what costs should be for the units of product manufactured during the period under normal efficient operating conditions are known as

A) semi-variable costs.
B) variable costs.
C) fixed costs.
D) standard costs.

E) A) and D)
F) None of the above

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Question 52

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The---------- cost per unit does not change as output changes.

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Question 53

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The following production information is available for January: $\begin{array}{lrr}\text { Actual Hours used } & 45,000 \\\text { Actual Rate per hour } & \$ 15 \\\text { Standard Rate per hour } & \$ 14 \\\text { Standard hours for units produced } & 47,000\end{array}$ The direct materials price variance is:

Better Blankets, Inc. makes a SnuggieBlank using flannel material and trim binding. They have instituted a successful JIT system and thus no longer have to stock inventory prior to their production need. The Standard Cost Card for The SnuggieBlank model is shown. STANDARD COST CARD The company reported the following results concerning January: - The labor rate variance in January is:

As the level of activity increases, the total fixed costs for the period

An unfavorable price variance for materials means that

Costs that reflect what costs should be for the units of product manufactured during the period under normal efficient operating conditions are called------------- costs.

As the volume of output decreases, the fixed cost per unit of output increases.

Which of the following is NOT an element of the standard cost?

To separate the semi-variable costs into their fixed and variable components, one can use which of the following methods?

The quantity variance for an item is the difference between its actual quantity and its standard quantity, multiplied by the-------- cost of the item.

Kenwood Company's manufacturing overhead costs for the assembly department are given below. $\begin{array}{lrr} &\text { Fixed Costs } & \text { Variable Costs } \\& \text { Per Month } & \text { Per Hour } \\\text { Indirect Labor } & \$ 1,400 & \$ .95 \\\text { Payroll Taxes } & 90 & 1.05 \\\text { Indirect Materials } & 220 & .20 \\\text { Power and Water } & 340 & .35 \\\text { Depreciation } & 1,020 & -- \\\text { Taxes and Insurance } & 450 & --- \\\text { Repairs } & 175 & .15\end{array}$ Using the information provided, prepare a flexible budget for the department for the month of May 2019, assuming that the expected production is for 2,000 direct labor hours. The flexible budget should show costs for production levels of 90 percent and 110 percent of the expected production level of 2,000 hours.

Develop the standard costs from the information given. Morlee Corporation makes three models of storage sheds. Model JB102 a 10' by 12' model that looks Victorian with windows, shutters and gingerbread along the roof line, is Morlee's most popular model. Direct materials for the JB102 consists of $ 66.00 for 7 sheets of pressed board, $59.00 for 2 x 4's for framing, $22.00 for roofing shingles, and $17.00 for aluminum siding. The nails, glue and other indirect materials for the company total $38,880 per year and are applied based on direct labor hours. The total direct labor hours for Morlee for one year are estimated to be 8,000 per year. Direct labor for each JB 102 is estimated to be 7 hours. The average hourly rate at Morelee is $14.50. Prepare a standard cost card for Model JB102. Units and per unit amount for material can be omitted.

A fixed budget includes only fixed manufacturing costs.

Match the following descriptions with the appropriate term.

Standard costs reflect what costs should be for the units of product manufactured during the period under the normal efficient operating conditions.

In a factory, the total variable costs are $1,100 if 500 units are produced. If 800 units are produced, the variable cost per unit would be

From the information given for Canine Cottage Industries, compute the materials, quantity and pric variances. Canine Cottage Industries makes several specially designed doghouses. The Standard Cost Card for The Gables model is shown. A customer ordered three of this model for their Labrador retrievers. The Job Cost Sheet is shown. STANDARD COST CARD Item: Model:The Gables Materials

The three classifications for manufacturing costs are fixed, variable, and semi-variable. Explain what each is and how they relate to production.

The Costmore Company uses standard costing and has established the following standards for direc materials and direct labor for each unit it makes: $\begin{array}{ll}\text { Direct Materials } & 3 \text { gallons at } \$ 5 \text { per gallon } \\\text { Direct Labor } & 1 \text { hour at } \$ 12 \text { per hour }\end{array}$ During July, the company made 4,000 units of product and used 13,000 gallons. The actual price paid for materials was $5.20 per gallon. Direct Labor used was 3,600 hours and workers were paid $11.75 per hour. An analysis would indicate