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Exam 29: Controlling Manufacturing Costs: Standard Costs

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Question 31

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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 material price variance for Flannel used in January is:

A) $10,200 unfavorable.
B) $10,200 favorable.
C) $2,700 favorable.
D) $2,700 unfavorable.

E) A) and B)
F) A) and C)

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Question 32

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The high-low point method results can be misleading if the activity is not reflective of the normal activity.

A) True
B) False

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Question 33

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The flexible budget usually shows

Costs that do not vary in total during a period even though the volume of manufacturing activity changes are called----------- costs.

The manufacturing cost budget will include both variable and fixed manufacturing costs.

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

Petersen Company produces a single product with the following production and average cost data: - The best estimate of the variable cost per unit is:

Costs are expected to behave in a similar manner within a relevant range of activity.

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

The standard quantity of materials for a product was 62 pounds per unit at the standard price of $3) 10 per pound. The actual price per pound of materials was $3.25, and the actual quantity used was 67 pounds. An analysis would indicate

Semi-variable costs are sometimes called mixed costs.

Match the following descriptions with the appropriate term.

A material usage variance is calculated as:

In a factory, the fixed costs are $7,200 when 600 units are produced. If 900 units are produced, the fixed costs per unit would be

Direct factory labor is usually considered to be

The setting of standard wage rates is usually a function of the Human Resources department.

Deducting the total variable cost from the total cost results in the

In a factory, the total variable costs are $1,100 if 500 units are produced. If 400 units are produced, the total variable costs would be

The following production information is available for January: The direct materials price variance is:

A budget performance report compares actual costs for a period with the budgeted costs for that period.