FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 29: Controlling Manufacturing Costs: Standard Costs

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 1

Multiple Choice

Review LaterAdd Note

Review Later

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

A) labor variance method
B) material variance method
C) relevant range of activity method
D) high-low point method

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

Correct Answer

verified

Show Answer

Question 2

Short Answer

Review LaterAdd Note

Review Later

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

Correct Answer

verified

Show Answer

Question 3

True/False

Review LaterAdd Note

The high-low point method results can be misleading if the months used are the highest and lowest production levels of the year.

If a price variance for materials is unfavorable, the quantity variance for materials also must be unfavorable.

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

Match the following descriptions with the appropriate term.

Prepare a budget for manufacturing costs for Anasta Manufacturing for the month of April 2013 from the following information. Direct materials are estimated to be $600,000 for the year and direct labor is estimated to be $108,000. The direct labor per hour average is $16 and the budgeted level of direct labor activity for the month is 1,100 hours. $\begin{array}{c}\begin{array}{lll}\\\\\text {Factory Supervisor salary }\\ \text {Janitorial/Maintenance labor}\\ \text { Payroll taxes and fringe benefits }\\ \text {Insurance}\\ \text {Supplies}\\ \text {Equipment Depreciation}\\ \text {Property Taxes}\\ \text {Total} \end{array}\begin{array}{c} \text {Fixed Cost}\\ \text { per Month}\\ \$ 4,100 \\ 475\\ 1,075\\ 400\\ 215\\2,200 \\\underline{600} \\ \underline{9,065} \\\end{array}\begin{array}{c}\text { Variable Costs per } \\\text { Direct Labor Hour } \\\$ 0.00 \\1.25 \\1.75 \\0.00 \\0.55 \\0.00 \\\underline{0.00} \\\underline{3.55} \end{array}\end{array}$

A fixed budget includes only fixed manufacturing costs.

The company's accountant developed the data given below for Product X for the year 2013. Use this information to compute the answers to the questions that follow. Total budgeted production: 10,000 units Raw materials: $\quad$ 3 units of raw materials, costing $\$ 2$ per unit, required for each unit of finished goods Direct labor: $\quad 3$ hours of labor at the rate of $\$ 10$ per hour required for each unit of finished goods Mfg. overhead: $\quad \$ 70,000$ budgeted for 10,000 units of finished goods 1. What is the standard cost per unit of product for materials? 2. What is the standard cost per unit of product for labor? 3. What is the standard cost per unit of product for overhead? 4. What is the total standard cost per unit of product?

Complete the flexible budget for Cullville Industries for April 2013. Overhead is based on direct labor hours.

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.

Vista Company's records show the following information for the first six months of 2013. $\begin{array} { l c c } \text { Month } & \text { Direct Labor Hours } & \text { Utilities Cost } \\\text { January } & 6,000 & \$ 3,700 \\\text { February } & 3,400 & 2,500 \\\text { March } & 4,200 & 2,600 \\\text { April } & 3,800 & 2,800 \\\text { May } & 2,900 & 2,400 \\\text { June } & 2,800 & 2,100\end{array}$ 1. What are the variable costs per hour using the high-low point method? 2. What are the fixed costs per month using the high-low point method?

In a factory, the total variable costs are $600 if 500 units are produced. If 800 units are produced, the variable cost per unit would be

Topic: Cost Behavior and the Budget $\begin{array}{c}\text {Soville Manufacturing Company}\\\text {Budget Performance Report}\\\text {Month Ended June 30, 2013}\\\begin{array}{lr}&\text { Budget}\\&\text { 1000 hours}\\\text { Direct materials } & \$ 42,000 \\\text { Direct labor } & 16,000 \\\text { Manufacturing overhead } & \\\quad \text { Payroll taxes and fringe benefits } & 4,500 \\ \text { Factory supplies } & 360 \\\text { Machine repairs \& maintenance } & 800 \\\text { Factory supervisor salary } & 4,000 \\\text { Janitorial services } & 1,600 \\\text { Depreciation } & 2,800 \\\text { Insurance } & 400 \\\text { Property taxes } & \underline{780} \\\quad \text { Total manufacturing overhead } &\underline{15,240}\\\text { Total manufacturing cost } &\underline{73,240}\end{array}\begin{array}{rr}\text { Actual}&\text { (Over)}\\\text { 1020 hours}&\text { Under}\\\$ 43,600 & \\16,200 & \\\\4,620 & \\345 & \\575 & \\4,000 & \\1,580 & \\2,800 & \\400 & \\\underline{780} & \\\underline{15.100} & \\\underline{74.900} &\\\end{array} \end{array}$ -Complete the Budget Performance Report for Soville Manufacturing using the information given. Comment on the results.

If the actual cost of an item is lower than the standard cost, a(n) ____________________ price variance will be recognized.

Efficiency and cost control can be evaluated by comparing actual overhead costs with the budget for the actual level of operations with the

The standard quantity of materials for a product was 40 pounds per unit at the standard price of $2.00 per pound. The actual price per pound of materials was $1.50, and the actual quantity used was 44 pounds. An analysis would indicate

As the level of activity increases, the variable cost per unit of activity

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

Use the high-low point method to determine variable cost per unit: