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Exam 29: Controlling Manufacturing Costs: Standard Costs

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Question 61

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The difference between the total standard cost and the total actual cost is the

A) cost variance.
B) labor rate variance.
C) materials price variance.
D) standard cost card amount.

E) All of the above
F) B) and C)

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Question 62

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The controllable overhead variance compares the actual overhead costs incurred with what the costs should have been for the units produced.

A) True
B) False

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Question 63

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Costs that tend to change in total directly with the volume of manufacturing activity are called------------costs.

If the predetermined overhead application rate is a percentage of labor cost, then a favorable labor time variance will be accompanied by a favorable manufacturing overhead variance.

Semi-variable costs vary in direct proportion to the volume of activity or production.

WinterRec uses a standard cost system. The following data is available for November: The actual direct labor rate for November 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 efficiency variance in January is:

The materials price variance for an item is the difference between its actual price and its standard cost

The general model for computing a price variance is:

The labor time (efficiency)variance and the labor------------ variance together make up the total labor variance.

The standard costs for a unit of product are shown below. $\begin{array} { l l r } \text { Materials: } & 4 \text { pounds at } \$ 1.80 \text { per pound } & \$ 7.20 \\\text { Labor: } & 80 \text { hours at } \$ 13.00 \text { per hour } & 10.40 \\\text { Overhead: } & 65 \% \text { of direct labor } & 6.76\end{array}$ During July, Job N-5 for 200 units was completed. The actual costs of the job are shown below. $\begin{array} { l l r } \text { Materials: } & 823 \text { pourds at } \$ 1.86 \text { per pound } & \$ 1,530.78 \\\text { Lubor: } & 157 \text { hours at } \$ 13.13 \text { per hour } & 2,061.41 \\\text { Overhead Applied: } & 65 \% \text { of direct labor } & 1,339.92\end{array}$ 1. What is the total cost variance between actual cost and standard cost? 2. What is the total material variance? 3. What is the material quantity variance? 4. What is the material price variance?

An increase in the activity level will result in:

The labor standard for a product was 5.5 hours at a wage rate of $9 per hour. The firm produced 1,020 units of the item. Labor costs totaled $50,414 and 5,540 hours of labor were used. An analysis of labor costs would indicate

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 variable overhead efficiency variance in January is:

The range of activity at which the factory is likely to operate is referred to as the--------- range of activity.

Variance analysis is a tool used by management to pinpoint inefficiencies in the manufacturing process.

To measure manufacturing efficiency, it is necessary to first identify costs behavior and separate cost into their behavioral components.

Which of the following would NOT be considered a fixed manufacturing cost?

The production manager is accountable for all material quantity variances as defective product and scrap is a result of inexperienced workers.

Prepare a budget for manufacturing costs for Nacelle Manufacturing for the month of July 2019 from the following information. Direct materials are estimated to be $480,000 for the year and direct labor is estimated to be $96,000. The direct labor per hour average is $13 and the budgeted level of activity for the month is 1,200 hours.