ACCT 241 Week 10 Assignment Help 1 | Quiz | American University 

1

Required information

We learn how to compute direct materials price and quantity variances. When standards are compared to actual performance, the difference is referred to as a variance. Price variances are computed by taking the difference between actual and standard prices and multiplying the result by the quantity of input purchased. Quantity variances are computed by taking the difference between the actual quantity of the input used and the quantity of input that is allowed for the actual output, and then multiplying the result by the standard price of the input.

 

Knowledge Check 01

The standard quantity per unit defines the ________.

 

price that should be paid for each unit of direct materials.

total cost of direct materials that should be used for each unit of finished product.

amount of direct materials that should be used for each unit of finished product including an allowance for normal inefficiencies, such as scrap and spoilage.

amount of direct labour-hours that should be used to produce one unit of finished goods.

 

2.

Required information

We learn how to compute direct materials price and quantity variances. When standards are compared to actual performance, the difference is referred to as a variance. Price variances are computed by taking the difference between actual and standard prices and multiplying the result by the quantity of input purchased. Quantity variances are computed by taking the difference between the actual quantity of the input used and the quantity of input that is allowed for the actual output, and then multiplying the result by the standard price of the input.

 

Knowledge Check 01

A flexible budget performance report for variable manufacturing costs shows _______.

 

only the activity variances.

both the activity variances and the spending variances.

both the revenue variances and the spending variances.

both the quantity variances and the price variances.

 

 

3.

Required information

We learn how to compute direct materials price and quantity variances. When standards are compared to actual performance, the difference is referred to as a variance. Price variances are computed by taking the difference between actual and standard prices and multiplying the result by the quantity of input purchased. Quantity variances are computed by taking the difference between the actual quantity of the input used and the quantity of input that is allowed for the actual output, and then multiplying the result by the standard price of the input.

 

Knowledge Check 01

The standard quantity allowed is _______.

 

the amount of an input that should have been used to complete the planned output for the period.

the actual amount of input that was used to complete the planned output for the period.

the amount of an input that should have been used to complete the actual output for the period.

the actual amount of input that was used to complete the actual output for the period.

 

 

4.

Required information

We learn how to compute direct materials price and quantity variances. When standards are compared to actual performance, the difference is referred to as a variance. Price variances are computed by taking the difference between actual and standard prices and multiplying the result by the quantity of input purchased. Quantity variances are computed by taking the difference between the actual quantity of the input used and the quantity of input that is allowed for the actual output, and then multiplying the result by the standard price of the input.

 

Knowledge Check 01

Zeta Corporation is a manufacturer of sports caps, which require soft fabric. The standards for each cap allow 2.00 yards of soft fabric, at a cost of $2.00 per yard. During the month of January, the company purchased 25,000 yards of soft fabric at $2.10 per yard, to produce 12,000 caps. What is Zeta Corporation's materials price variance for the month of January?

 

$2,000 F

$2,000 U

$2,500 F

$2,500 U

 

 

5

Required information

We learn how to compute direct materials price and quantity variances. When standards are compared to actual performance, the difference is referred to as a variance. Price variances are computed by taking the difference between actual and standard prices and multiplying the result by the quantity of input purchased. Quantity variances are computed by taking the difference between the actual quantity of the input used and the quantity of input that is allowed for the actual output, and then multiplying the result by the standard price of the input.

 

Knowledge Check 01

Most companies compute the materials price variance when raw materials are _______.

 

received from suppliers and transported to raw materials inventory.

withdrawn from raw materials inventory and used in production.

ordered from suppliers.

moved from work in process inventory to finished goods inventory.

 

6.

Required information

We learn the computation of the direct labour rate and efficiency variances. The labor rate variance measures any deviation from standard in the average rate paid to direct labour workers. Labour rate variances generally arise because of the way labour is used. The labour efficiency variance attempts to measure the productivity of direct labour. Possible causes of an unfavorable labour efficiency variance include poorly trained or motivated workers, insufficient demand for the company's products, and so on. 

Knowledge Check 01

The standard hours allowed is ________.

 

the direct labour-hours that should have been used to complete the planned output for the period.

 the direct labour-hours that should have been used to complete the actual output for the period.

computed by multiplying the standard labour-hours allowed per unit by the planned output for the period.

computed by multiplying the actual labour-hours per unit by the planned output for the period. 

7.

Required information

We learn the computation of the direct labour rate and efficiency variances. The labour rate variance measures any deviation from standard in the average rate paid to direct labour workers. Labour rate variances generally arise because of the way labour is used. The labour efficiency variance attempts to measure the productivity of direct labour. Possible causes of an unfavourable labour efficiency variance include poorly trained or motivated workers, insufficient demand for the company's products, and so on. 

XXX Company

Actual Hours of Input at Actual Rate (AH × AR)	Actual Hours of Input at Standard Rate (AH × SR)	Standard Hours of Input at Standard Rate (SH × SR)
= (2,200 hours × $1.90)	= (2,200 hours × $2.00)	= (2,000 hours × $2.00)

 

Knowledge Check 01

What is the spending variance?

 

$180 F

$180 U

$4,000 F

$4,000 U

8.

Required information

We learn the computation of the direct labour rate and efficiency variances. The labour rate variance measures any deviation from standard in the average rate paid to direct labour workers. Labour rate variances generally arise because of the way labour is used. The labour efficiency variance attempts to measure the productivity of direct labour. Possible causes of an unfavourable labour efficiency variance include poorly trained or motivated workers, insufficient demand for the company's products, and so on. 

 

XXX Company

 

Actual Hours of Input at Actual Rate (AH × AR)	Actual Hours of Input at Standard Rate (AH × SR)	Standard Hours of Input at Standard Rate (SH × SR)
= (2,200 hours × $1.90)	= (2,200 hours × $2.00)	= (2,000 hours × $2.00)

 

Knowledge Check 01

What is the labour rate variance?  

 

$180 F

$220 F

$220 U

$400 U

9.

Required information

We learn how to compute the variable manufacturing overhead rate variance and efficiency variance. Either direct labor-hours or machine-hours are often used as the activity base for allocating the variable manufacturing overhead. The variable overhead efficiency variance measures the difference between the actual hours used in production and the hours that should have been used times the standard variable overhead rate. The variable overhead rate variance is the difference between the actual variable overhead rate and the standard variable overhead rate times the actual hours. The variable overhead efficiency variance really doesn't tell us anything about how efficiently overhead resources were used. It depends solely on how efficiently the allocation base was used.

 

Knowledge Check 01

When computing variable manufacturing overhead variances, the standard rate represents the ________.

 

predetermined overhead rate.

variable portion of the predetermined overhead rate.

standard hourly pay rate for direct laborers.

the amount of hours allowed for the actual output.

10.

Required information

We learn how to compute the variable manufacturing overhead rate variance and efficiency variance. Either direct labor-hours or machine-hours are often used as the activity base for allocating the variable manufacturing overhead. The variable overhead efficiency variance measures the difference between the actual hours used in production and the hours that should have been used times the standard variable overhead rate. The variable overhead rate variance is the difference between the actual variable overhead rate and the standard variable overhead rate times the actual hours. The variable overhead efficiency variance really doesn't tell us anything about how efficiently overhead resources were used. It depends solely on how efficiently the allocation base was used.

 

Knowledge Check 01

Assume that direct labor-hours are used as the overhead allocation base. If the direct labor efficiency variance is unfavorable, the variable overhead efficiency variance ________.

 

will be favorable.

will be unfavorable.

Cannot be determined without additional information. convert materials into the finished product.

will be equal to zero. 

11.

Required information

We learn how to compute the variable manufacturing overhead rate variance and efficiency variance. Either direct labor-hours or machine-hours are often used as the activity base for allocating the variable manufacturing overhead. The variable overhead efficiency variance measures the difference between the actual hours used in production and the hours that should have been used times the standard variable overhead rate. The variable overhead rate variance is the difference between the actual variable overhead rate and the standard variable overhead rate times the actual hours. The variable overhead efficiency variance really doesn't tell us anything about how efficiently overhead resources were used. It depends solely on how efficiently the allocation base was used.

 

Standard rate per direct labor-hour	$	2
Standard direct labor-hours for each unit produced		3
Units manufactured		1,000
Actual direct labor-hours worked during the month		3,300
Total actual variable manufacturing overhead	$	6,600

Knowledge Check 01

Assume that direct labor-hours is used as the overhead allocation base. What is the variable overhead efficiency variance?

$300 F

$300 U

$600 F

$600 U