Standard Costs and Variance Analysis Paper 10

1

Sleep-Fine Company is a mattress manufacturer. The company has a standard direct labor rate of $25 per hour, 75 direct labor employees, and 50 indirect labor employees. Last week, the direct labor payroll was $90,000 for 3,000 hours worked. The company manufactured 1,000 mattresses. The standard cost sheet allows for 2.5 hours of labor per mattress. The direct labor rate variance is






2

Baxter Corporation’s master budget calls for the production of 5,000 units of product monthly. The master budget includes indirect labor of $144,000 annually; Baxter considers indirect labor to be a variable cost. During the month of April, 4,500 units of product were produced, and indirect labor costs of $10,100 were incurred. A performance report utilizing flexible budgeting would report a budget variance for indirect labor of






3

The efficiency variance for either direct labor or materials can be divided into






4

A materials or labor yield variance equals






5

The labor mix and labor yield variances together equal the






6

1452Conroy, Inc., manufactures a product by mixing two materials as shown by the following standards for one unit of finished goods.
1. Material A: 4 ounces at $1.50/ounce
2. Material B: 6 ounces at $2.50/ounce
Conroy actually produced 25,000 units of finished goods using 105,000 ounces of Material A and 145,000 ounces of Material B. The actual costs of the materials were $1.48 per ounce for Material A and $2.55 per ounce for Material B. Conroy’s direct material yield variance was






7

If overhead is applied on the basis of units of output, the variable overhead efficiency variance will be






8

Variable overhead is applied on the basis of standard direct labor hours. If, for a given period, the direct labor efficiency variance is unfavorable, the variable overhead efficiency variance will be






9

Variable overhead is applied on the basis of standard direct labor hours. If, for a given period, the direct labor efficiency variance is unfavorable, the variable overhead efficiency variance will be






10

Baltimore Products has an estimated practical capacity of 90,000 machine hours, and each unit requires two machine hours. The following data apply to a recent accounting period:
Actual variable overhead $240,000
Actual fixed overhead $442,000
Actual machine hours worked 88,000
Actual finished units produced 42,000
Budgeted variable overhead at 90,000 machine hours $200,000
Budgeted fixed overhead $450,000
Of the following factors, Baltimore’s production volume variance is most likely to have been caused by






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