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Exam 13: Budgeting and Standard Cost Systems

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Question 81

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The standard costs and actual costs for direct labor for the manufacture of 2,500 actual units of product are as follows: The amount of the direct labor rate variance is

A) $4,440 unfavorable.
B) $4,500 favorable.
C) $4,440 favorable.
D) $4,500 unfavorable.

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Question 82

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The master budget of a small manufacturer would normally include all necessary component budgets EXCEPT the capital expenditures budget.

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Question 83

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The following data relate to direct labor costs for the current period: What is the direct labor time variance?

Financial reporting systems that are guided by the principle of exceptions concept focus attention on variances from standard costs.

The cash payments for manufacturing in the month of April are

Ideal standards are developed under conditions that assume no idle time,no machine breakdowns,and no materials spoilage.

If the standard to produce a given amount of product is 16,000 hours at a factory overhead rate of $5 ($3 fixed,$2 variable),actual variable factory overhead was $26,400,actual fixed factory overhead was $45,000,and 100% of productive capacity is 15,000 hours,the volume variance was $3,000 favorable.

Production estimates for August are as follows: For each unit produced,the direct materials requirements are as follows: The number of pounds of materials A and B required for August production is

The budget procedure that requires all levels of management to start from zero in estimating sales,production,and other operating data is called zero-based budgeting.

Standard and actual costs for direct materials for the manufacture of 1,000 units of product were as follows: Determine the (a)quantity variance, (b)price variance,and (c)total direct materials cost variance.

If the expected sales volume for the current period is 7,000 units,the desired ending inventory is 400 units,and the beginning inventory is 300 units,the number of units set forth in the production budget,representing total production for the current period,is

The formula to compute direct material quantity variance is to calculate the difference between

As a device for measuring efficiency,standard cost systems enable management to determine the causes of differences between what a product should cost and how much it actually costs to produce.

Normally standard costs should be revised when labor rates change to incorporate new union contracts.

If the standard to produce a given amount of product is 500 direct labor hours at $15 and the actual was 600 hours at $17,the time variance was $1,500 favorable.

In most businesses,cost standards are established principally by accountants.

The cash payments for manufacturing in the month of May are

The budgeted direct materials purchases are normally computed as the sum of (1)the materials for production and (2)the desired ending inventory.

The production budget is the starting point for preparation of the direct labor cost budget.

The first budget customarily prepared as part of an entity's master budget is the