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BE 195 In October, Glazier Inc. reports 42,000 actual direct labor hours, and it incurs $196,000 of manufacturing overhead costs. Standard hours allowed for the work done is 40,000 hours. Glazier’s predetermined overhead rate is $5.00 per direct labor hour. Instructions Compute the total manufacturing overhead variance. BE 196 Overhead data for Glazier Inc. are.
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Ex. 213 Dart Company developed the following standard costs for its product for 2012: DART COMPANY Standard Cost Card Cost ElementsStandard Quantity×Standard Price=Standard Cost Direct materials4 pounds$  5$20 Direct labor2 hours1020 Variable overhead2 hours48 Fixed overhead2 hours2    4 $52 The company expected to work at the 40,000 direct labor hours level of activity and produce 20,000 units of product. Actual results.
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Ex. 224 Pepper Industries uses a standard cost accounting system. During March, 2012, the company reported the following manufacturing variances: Materials price variance$1,600F Materials quantity variance2,400U Labor price variance600U Labor quantity variance2,200U Overhead controllable500F Overhead volume3,000U In addition, 15,000 units of product were sold at $18 per unit. Each unit sold had a standard cost of $12. Selling.
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a179.The following information was taken from the annual manufacturing overhead cost budget of Fergie Manufacturing. Variable manufacturing overhead costs$69,300 Fixed manufacturing overhead costs$41,580 Normal production level in labor hours23,100 Normal production level in units5,775 Standard labor hours per unit4 During the year, 5,600 units were produced, 18,340 hours were worked, and the actual manufacturing overhead was.
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              59.The two levels that standards may be set at are a.normal and fully efficient. b.normal and ideal. c.ideal and less efficient. d.fully efficient and fully effective.               60.The most rigorous of all standards is the a.normal standard. b.realistic standard. c.ideal standard. d.conceivable standard.               61.Most companies that use standards set them at a.the normal level. b.a conceivable level. c.the ideal level. d.last year's.
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119.A company purchases 15,000 pounds of materials. The materials price variance is $6,000 favorable. What is the difference between the standard and actual price paid for the materials? a.$2.00 b.$.40 c.$2.50 d.$10.00               120.A company uses 40,000 gallons of materials for which they paid $9.00 a gallon. The materials price variance was $80,000 favorable.  What.
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Ex. 205 The following direct labor data pertain to the operations of Pearce Corp. for the month of November: Actual labor rate$9.20 per hr. Actual hours used18,000 Standard labor rate$9.00 per hr. Standard hours allowed17,100 Ex. 205(Cont.) Instructions Prepare a matrix and calculate the labor variances. Price VarianceQuantity Variance Total Labor Variance       .
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Ex. 225 Howard, Inc. developed the following standards for 2012: Howard, Inc. Standard Cost Card Cost ElementsStandard Quantity×Standard Price=Standard Cost Direct materials5 pounds$  5$25 Direct labor1 hour$1818 Manufacturing overhead1 hour$10  10 $53 The company planned to produce 60,000 units of product and work at the 60,000 direct labor level of activity in 2012. The company uses a standard cost.
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COMPLETION STATEMENTS               229.A ________________ is expressed as a unit amount, whereas a _________________ is expressed as a total amount.               230.Standards which represent optimum performance under perfect operating conditions are called _______________ standards, but most companies use _________________ standards which are rigorous but attainable.               231.In developing a standard cost for direct.
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Ex. 216 More Hits Company manufactures aluminum baseball bats that it sells to university athletic departments. It has developed the following per unit standard costs for 2012 for each baseball bat: Manufacturing       Direct Materials  Direct Labor           Overhead  Standard Quantity2 Pounds (Aluminum)1/2 hour1/2 hour Standard Price$4.00$10.00$6.00 Unit Standard Cost$8.00$5.00$3.00 In 2012, the company planned to produce 80,000.
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Ex. 198 The Pacific Division of Henson Industries reported the following data for the current year. Sales$4,000,000 Variable costs2,600,000 Controllable fixed costs800,000 Average operating assets6,000,000 Top management is unhappy with the investment center's return on investment (ROI). It asks the manager of the Pacific Division to submit plans to improve ROI in the next year. The.
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Ex. 203 Data for the following subsidiaries of Olive Manufacturing, which are operated as investment centers, are as follows: Fleming CompanyOak Company Sales$3,000,000$2,000,000 Controllable margin(1)(3) Average operating assets(2)6,000,000 Contribution margin800,000990,000 Controllable fixed costs200,000150,000 Return on Investment10%(4) Instructions Compute the missing amounts using the ROI formula. Ex. 204 The data for an investment center is given below.     1/1/11    12/31/11  Current assets$   300,000$   500,000 Plant assets3,000,0004,000,000 Idle.
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              31.In concept, standards and budgets are essentially the same.               32.Standards may be useful in setting selling prices for finished goods.               33.The materials price standard is based on the purchasing department's best estimate of the cost of raw materials.               34.The materials price variance is normally caused by the production department.              .
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Ex. 214 Flagstaff, Inc. uses standard costing for its one product, baseball bats. The standards call for 3 board-feet of wood at $1.40 per board-foot, and 45 minutes of work at $12 per hour per bat. Total manufacturing overhead costs were estimated at $5,250, of which the variable portion was $0.50.
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aEx. 226 Presented below is a flexible manufacturing budget for Ganem Manufacturing, which manufactures fine timepieces: Activity Index: Standard direct labor hours 2,0003,2003,6004,000 Variable costs Indirect materials$  4,000$  6,400$  7,200$  8,000 Indirect labor2,3003,6804,1404,600 Utilities    5,200    8,320    9,360  10,400 Total variable11,50018,40020,70023,000 Fixed costs Supervisory salaries1,0001,0001,0001,000 Rent    3,000    3,000    3,000    3,000 Total fixed    4,000    4,000    4,000    4,000 Total costs$15,500$22,400$24,700$27,000 aEx. 226(Cont.) The company applies the overhead on.
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a159.If a company incurs direct labor cost of $41,000 when the standard cost is $42,000, it will a.debit Labor Price Variance for $1,000. b.credit Labor Price Variance for $1,000. c.debit Labor Quantity Variance for $1,000. d.credit Labor Quantity Variance for $1,000.               a160.If a company assigns factory labor to production at a cost of $42,000.
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Ex. 208 Lumberman Manufacturing provided the following information about its standard costing system for 2012: Standard DataActual Data Materials10 lbs. @ $4 per lbs.Produced4,000 units Labor3 hrs. @ $21 per hr.Materials purchased50,000 lbs. for $210,000 Budgeted fixed overhead$100,000Materials used41,000 lbs. Budgeted variable overhead$30 per unitLabor worked11,000 hrs. costing $220,000 Budgeted production5,000 unitsActual overhead$230,000 Instructions Determine the amount of.
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BRIEF Exercises BE 191 Seven Manufacturing Corporation uses both standards and budgets. The company estimates that production for the year will be 200,000 units of Product Fast. To produce these units of Product Fast, the company expects to spend $600,000 for materials and $800,000 for labor. Instructions Compute the estimates for (a) a standard.
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Ex. 203 Engines Done Right Co. is trying to establish the standard labor cost of a typical engine tune-up. The following data have been collected from time and motion studies conducted over the past month. Actual time spent on the tune-up1.0 hour Hourly wage rate$12 Payroll taxes10% of wage rate Setup and downtime10% of actual.
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SHORT-ANSWER ESSAY QUESTIONS S-A E  218 The master budget and flexible budgets are important aids to management in performing the management functions of planning and control. Briefly describe how planning and control are facilitated by preparing a master budget and flexible budgets. How are these two types of budgets interrelated with planning.
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`TRUE-FALSE STATEMENTS               1.Inventories cannot be valued at standard cost in financial statements.               2.Standard cost is the industry average cost for a particular item.               3.A standard is a unit amount, whereas a budget is a total amount.               4.Standard costs may be incorporated into the accounts in the general ledger.               5.An advantage.
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              49.Using standard costs a.can make management planning more difficult. b.promotes greater economy. c.does not help in setting prices. d.weakens management control.               50.If standard costs are incorporated into the accounting system, a.it may simplify the costing of inventories and reduce clerical costs. b.it can eliminate the need for the budgeting process. c.the accounting system will produce information.
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              69.The total standard cost to produce one unit of product is shown a.at the bottom of the income statement. b.at the bottom of the balance sheet. c.on the standard cost card. d.in the Work in Process Inventory account.               70.An unfavorable materials quantity variance would occur if a.more materials were purchased than were used. b.actual pounds.
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              21.The overhead controllable variance relates primarily to fixed overhead costs.               22.The overhead volume variance relates only to fixed overhead costs.               23.If production exceeds normal capacity, the overhead volume variance will be favorable.               24.There could be instances where the production department is responsible for a direct materials price variance.               25.The.
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              11.Once set, normal standards should not be changed during the year. 12.In developing a standard cost for direct materials, a price factor and a quantity factor must be considered.               13.A direct labor price standard is frequently called the direct labor efficiency standard.               14.The standard predetermined overhead rate must be based.
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              89.The standard rate of pay is $10 per direct labor hour. If the actual direct labor payroll was $58,800 for 6,000 direct labor hours worked, the direct labor price (rate) variance is a.$1,200 unfavorable. b.$1,200 favorable. c.$1,500 unfavorable. d.$1,500 favorable.               90.The standard number of hours that should have been worked for the output.
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a169.If the standard hours allowed are less than the standard hours at normal capacity, a.the overhead volume variance will be unfavorable. b.variable overhead costs will be underapplied. c.the overhead controllable variance will be favorable. d.variable overhead costs will be overapplied.               a170.Which of the following statements about overhead variances is false? a.Standard hours allowed are used.
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Exercises Ex 201 Sonic, Inc. is planning to produce 3,000 units of product in 2012. Each unit requires 3 pounds of materials at $6 per pound and a half hour of labor at $16 per hour. The overhead rate is 75% of direct labor. Instructions (a)Compute the budgeted amounts for 2012 for direct materials.
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MULTIPLE CHOICE QUESTIONS               39.What is a standard cost? a.The total number of units times the budgeted amount expected b.Any amount that appears on a budget c.The total amount that appears on the budget for product costs d.The amount management thinks should be incurred to produce a good or service               40.A standard cost is a.a cost.
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aEx. 221 Caroline, Inc. planned to produce 25,000 units of product and work 100,000 direct labor hours in 2012. Manufacturing overhead at the 100,000 direct labor hours level of activity was estimated to be: Variable manufacturing overhead$   700,000 Fixed manufacturing overhead     300,000 Total manufacturing overhead$1,000,000 At the end of 2012, 24,000 units of product were.
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Ex. 200 Perez Corp. reported the following: Beginning of year operating assets$2,200,000 End of year operating assets2,000,000 Contribution margin1,000,000 Sales5,000,000 Controllable fixed costs643,000 Its required return is 10%. Instructions Compute the company’s ROI. Ex. 201 Lombard, Inc. has two investment centers and has developed the following information: Department ADepartment B Departmental controllable margin$200,000? Average operating assets?$500,000 Sales800,000250,000 ROI10%16% Instructions Answer the following questions about Department A and Department.
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139.Which of the following is true? a.The form, content, and frequency of variance reports vary considerably among companies. b.The form, content, and frequency of variance reports do not vary among companies. c.The form and content of variance reports vary considerably among companies, but the frequency is always weekly. d.The form and content of variance.
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              99.A company uses 8,400 pounds of materials and exceeds the standard by 400 pounds. The quantity variance is $1,200 unfavorable. What is the standard price? a.$1.00 b.$2.00 c.$3.00 d.Cannot be determined from the data provided.               100.A company purchases 20,000 pounds of materials. The materials price variance is $3,000 favorable. What is the difference.
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Ex. 220 North Coast Manufacturing provided the following information about its standard costing system for 2012: Standard DataActual Data Labor2 hrs. @ $21 per hr.Produced8,000 units Budgeted fixed overhead$100,000Labor worked15,000 hrs. costing $300,000 Budgeted variable overhead$30 per unitActual overhead$355,000 Budgeted production10,000 units North Coast applies fixed overhead at $10 per unit produced. Instructions Determine the amounts of the.
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149.In Zero Company’s income statement, they report actual gross profit of $47,500 and the following variances: Materials price $   420F Materials quantity600F Labor price420U Labor quantity 1,000F Overhead900F Zero would report gross profit at standard of a.$41,660. b.$42,500. c.$45,000. d.$48,340.               150.The balanced scorecard a.incorporates financial and nonfinancial measures in an integrated system. b.is based on financial measures. c.is based on nonfinancial measures. d.does not.
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Ex. 206 The following direct materials data pertain to the operations of Wright Co. for the month of December. Standard materials price$5.00 per pound Actual quantity of materials purchased and used12,300 pounds Ex. 206(Cont.) The standard cost card shows that a finished product contains 3 pounds of materials. The 12,300 pounds were purchased in December.
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Ex. 196 Danner Co. has three divisions which are operated as profit centers. Actual operating data for the divisions listed alphabetically are as follows.       Operating Data      Women's ShoesMen's ShoesChildren's Shoes Contribution margin$210,000(3)$200,000 Controllable fixed costs  100,000(4)      (5) Controllable margin     (1)$  90,000    96,000 Sales  600,000  480,000      (6) Variable costs     (2)  330,000  250,000 Instructions (a)Compute the missing amounts. Show computations. (b)Prepare.
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COMPLETION STATEMENTS               205.The use of budgets in controlling operations is known as ________________.               206.A major aspect of budgetary control is the use of budget reports that compare _____________________ with _______________________.               207.In analyzing differences from planned objectives, management may take ___________________, or it could decide to modify ___________________.               208.The master budget.
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Ex. 219 The following direct labor data pertain to the operations of Murray Industries for the month of November: Standard labor rate$10.00 per hr. Actual hours incurred9,000 The standard cost card shows that 2.5 hours are required to complete one unit of product. The actual labor rate incurred exceeded the standard rate by 10%..
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aEx. 223 Adam Corporation prepared the following variance report. ADAM CORPORATION Variance Report—Purchasing Department for Week Ended January 9, 2012 Type ofQuantityActualStandardPrice MaterialsPurchased Price    Price   Variance      Explanation      Brown? lbs.$5.25$5.00$6,000 ?Price increase Green8,000 oz.?  3.25  1,600 URush order White22,000 units$0.45?     660 FBought larger quantity Ex. 223(Cont.) Instructions Fill in the appropriate amounts or letters for the question marks in the report.     .
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Ex. 211 Platt Company produces one product, a putter called PAR-putter. Platt uses a standard cost system and determines that it should take one hour of direct labor to produce one PAR-putter. The normal production capacity for this putter is 100,000 units per year. The total budgeted overhead at normal capacity.
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Ex. 212 Hector Company has developed the following standard costs for its product for 2012: HECTOR COMPANY Standard Cost Card Product A Cost ElementStandard Quantity×Standard Price=Standard Cost Direct materials4 pounds$3$12 Direct labor3 hours824 Manufacturing overhead3 hours4  12 $48 The company expected to produce 25,000 units of Product A in 2012 and work 75,000 direct labor hours. Actual results for 2012 are.
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              79.Which of the following statements is true? a.Variances are the differences between total actual costs and total standard costs. b.When actual costs exceed standard costs, the variance is favorable. c.An unfavorable variance results when actual costs are decreasing but standards are not changed. d.All of the above are true.               80.Unfavorable materials price and.
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109.An unfavorable labor quantity variance may be caused by a.paying workers higher wages than expected. b.misallocation of workers. c.worker fatigue or carelessness. d.higher pay rates mandated by union contracts.               110.The investigation of materials price variance usually begins in the a.first production department. b.purchasing department. c.controller's office. d.accounts payable department.               111.The investigation of a materials quantity variance usually begins.
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MATCHING 217.Match the items below by entering the appropriate code letter in the space provided. A.Budgetary control              G.              Responsibility reporting system B.Static budget              H.              Return on Investment C.Flexible budget              I.              Profit center D.Responsibility accounting              J.              Investment center E.Controllable costs              K.              Indirect fixed costs F.Management by exception              L.              Direct fixed costs ____              1.The review of budget reports by top.
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S-A E  222(Ethics) Dixon Corporation evaluates its managers based on return on investment (ROI). Kathryn Bricker and Lindsey Allan, managers of the electronics and housewares departments respectively, have recently suffered from declining profits in their departments. Over lunch, they discuss the problem, and how they could improve performance. Most of the.
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aEx. 227 The following information was taken from the annual manufacturing overhead cost budget of Cinnamon Manufacturing: Variable manufacturing overhead costs$155,000 Fixed manufacturing overhead costs$93,000 Normal production level in direct labor hours62,000 Normal production level in units31,000 During the year, 30,000 units were produced, 64,000 hours were worked, and the actual manufacturing overhead costs were $258,000..
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Ex. 218 Aztec, Inc.'s standard labor cost of producing one unit of product is 2 hours at the rate of $14.00 per hour. During February, 39,000 hours of labor are incurred at a cost of $13.80 per hour to produce 19,000 units of product. Instructions (a)Compute the labor price and labor quantity variances. a(b)Journalize.
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