Question 1:

The following labor standards have been established for a particular product:

Labor hours per unit of output  4.5 hours

Standard labor rate   $19.70

The following data pertain to operations concerning the product for the last month:

Actual hourworked     6500

Actual total labor cost  $130975

Actual output    1400 units

Required:

a. What is the labor rate variance for the month?

b. What is the labor efficiency variance for the month?

Question 2:

Karmazyn Hospital bases its budgets on patient-visits. The hospital's static budget for October appears below:

The total variable cost at the activity level of 9,000 patient-visits per month should be:

$157,530

$209,700

$207,370

$159,300

Question 3:

The Litton Company has established standards as follows:

Direct material: 3 pounds per unit @ $4 per pound = $12 per unit

Direct labor: 2 hours per unit @ $8 per hour = $16 per unit

Variable manufacturing overhead: 2 hours per unit @ $5 per hour = $10 per unit

Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased.

The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours.

The labor efficiency variance is:

$800 F

$800 U

$840 F

$840 U

Question 4:

Edington Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 2,800 client-visits, but its actual level of activity was 2,850 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting for September:

The personnel expenses in the planning budget for September would be closest to:

$62,946

$67,040

$66,420

$64,070

Question 5:

The Litton Company has established standards as follows:

Direct material: 3 pounds per unit @ $4 per pound = $12 per unit
Direct labor: 2 hours per unit @ $8 per hour = $16 per unit
Variable manufacturing overhead: 2 hours per unit @ $5 per hour = $10 per unit

Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased.

The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours.

The variable overhead efficiency variance is:

$520 F

$520 U

$500 U

$500 F

Question 6:

The Porter Company has a standard cost system. In July the company purchased and used 22,500 pounds of direct material at an actual cost of $53,000; the materials quantity variance was $1,875 Unfavorable; and the standard quantity of materials allowed for July production was 21,750 pounds. The materials price variance for July was:

$2,725 F

$2,725 U

$3,250 F

$3,250 U

Question 7: Karmazyn Hospital bases its budgets on patient-visits. The hospital's static budget for October appears below:

The total cost at the activity level of 9,200 patient-visits per month should be:

$364,900

$377,200

$370,770

$370,210

Question 8: Lotson Corporation bases its budgets on machine-hours. The company's static planning budget for May appears below:

Actual results for the month were:

The spending variance for power costs for the month should be:

$1,550 F

$4,160 F

$1,550 U

$4,160 U

Question 9:

The Litton Company has established standards as follows:

Direct material: 3 pounds per unit @ $4 per pound = $12 per unit
Direct labor: 2 hours per unit @ $8 per hour = $16 per unit
Variable manufacturing overhead: 2 hours per unit @ $5 per hour = $10 per unit

Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased.

The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours.

The materials price variance is:

$400 U

$400 F

$600 F

$600 U

Question 10: Lotson Corporation bases its budgets on machine-hours. The company's static planning budget for May appears below:

Actual results for the month were:

The spending variance for supplies costs for the month should be:

$600 U

$600 F

$270 F

$270 U

Question 11:

Lotson Corporation bases its budgets on machine-hours. The company's static planning budget for May appears below:

Actual results for the month were:

The spending variance for equipment depreciation for the month should be:

$320 F

$3,310 U

$320 U

$3,310 F

Question 12: The Litton Company has established standards as follows:

Direct material: 3 pounds per unit @ $4 per pound = $12 per unit
Direct labor: 2 hours per unit @ $8 per hour = $16 per unit
Variable manufacturing overhead: 2 hours per unit @ $5 per hour = $10 per unit

Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased.

The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours.

The labor rate variance is:

$480 F

$480 U

$440 F

$440 U

Question 13:

Gradert Framing's cost formula for its supplies cost is $1,540 per month plus $12 per frame. For the month of September, the company planned for activity of 668 frames, but the actual level of activity was 666 frames. The actual supplies cost for the month was $9,980. The supplies cost in the planning budget for September would be closest to:

$10,010

$9,532

$9,556

$9,980

Question 14:

The Litton Company has established standards as follows:

Direct material: 3 pounds per unit @ $4 per pound = $12 per unit
Direct labor: 2 hours per unit @ $8 per hour = $16 per unit
Variable manufacturing overhead: 2 hours per unit @ $5 per hour = $10 per unit

Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased.

The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours.

The materials quantity variance is:

$800 U

$4,000 U

$760 U

$760 F

Question 15: The following labor standards have been established for a particular product:

Labor hours per unit of output  4.5 hours

Standard labor rate   $12.30

The following data pertain to operations concerning the product for the last month:

Actual hourworked     7100

Actual total labor cost  $89105

Actual output    1500 units

What is the labor efficiency variance for the month?

$13,805 U

$13,530 U

$15,305 U

$15,305 F

Question 16: Celius Midwifery's cost formula for its wages and salaries is $2,410 per month plus $292 per birth. For the month of March, the company planned for activity of 113 births, but the actual level of activity was 116 births. The actual wages and salaries for the month was $35,340. The spending variance for wages and salaries in March would be closest to:

$942 F

$66 F

$66 U

$942 U

Question 17: The following standards for variable manufacturing overhead have been established for a company that makes only one product:

Labor hours per unit of output  2.7 hours

Standard labor rate   $13.05

The following data pertain to operations for the last month:

Actual hour   2400

Actual total labor cost  $30360

Actual output    600 units

What is the variable overhead efficiency variance for the month?

$9,219 U

$10,179 U

$9,867 U

$648 U

Question 18: The Litton Company has established standards as follows:

Direct material: 3 pounds per unit @ $4 per pound = $12 per unit
Direct labor: 2 hours per unit @ $8 per hour = $16 per unit
Variable manufacturing overhead: 2 hours per unit @ $5 per hour = $10 per unit

Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased.

The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours.

The variable overhead rate variance is:

$240 U

$220 U

$220 F

$240 F

Question 19:

Farver Air uses two measures of activity, flights and passengers, in the cost formulas in its flexible budgets. The cost formula for plane operating costs is $44,420 per month plus $2,008 per flight plus $1 per passenger. The company expected its activity in May to be 80 flights and 281 passengers, but the actual activity was 81 flights and 277 passengers. The actual cost for plane operating costs in May was $199,650. The spending variance for plane operating costs in May would be closest to:

$5,691 F

$7,695 U

$7,695 F

$5,691 U