Question :
Objective 7.5
1) A favorable price variance for direct materials indicates : 1217238
Objective 7.5
1) A favorable price variance for direct materials indicates that:
A) a lower price than planned was paid for materials
B) a higher price than planned was paid for materials
C) less material was used during production than planned for actual output
D) more material was used during production than planned for actual output
2) A favorable efficiency variance for direct manufacturing labor indicates that:
A) a lower wage rate than planned was paid for direct labor
B) a higher wage rate than planned was paid for direct labor
C) less direct manufacturing labor-hours were used during production than planned for actual output
D) more direct manufacturing labor-hours were used during production than planned for actual output
3) An unfavorable price variance for direct materials might indicate:
A) that the purchasing manager purchased in smaller quantities due to a change to just-in-time inventory methods
B) congestion due to scheduling problems
C) that the purchasing manager skillfully negotiated a better purchase price
D) that the market had an unexpected oversupply of those materials
4) A favorable efficiency variance for direct materials might indicate:
A) that lower-quality materials were purchased
B) an overskilled workforce
C) poor design of products or processes
D) a lower-priced supplier was used
5) A favorable price variance for direct manufacturing labor might indicate that:
A) employees were paid more than planned
B) budgeted price standards are too tight
C) underskilled employees are being hired
D) an efficient labor force
6) An unfavorable efficiency variance for direct manufacturing labor might indicate that:
A) work was efficiently scheduled
B) machines were not properly maintained
C) budgeted time standards are too lax
D) more higher-skilled workers were scheduled than planned
Answer the following questions using the information below:
Diana Industries, Inc. (DII), developed standard costs for direct material and direct labor. In 2010, DII estimated the following standard costs for one of their major products, the 10-gallon plastic container.
Budgeted quantityBudgeted price
Direct materials0.10 pounds$30 per pound
Direct labor0.05 hours$15 per hour
During June, DII produced and sold 10,000 containers using 980 pounds of direct materials at an average cost per pound of $32 and 500 direct manufacturing labor-hours at an average wage of $15.25 per hour.
7) June’s direct material flexible-budget variance is:
A) $1,860 unfavorable
B) $600 favorable
C) $1,360 unfavorable
D) None of these answers are correct.
8) June’s direct material price variance is:
A) $1,960 unfavorable
B) $600 favorable
C) $1,360 favorable
D) None of these answers are correct.
9) June’s direct manufacturing labor price variance is:
A) $125 unfavorable
B) $125 favorable
C) $7,623.50 unfavorable
D) None of these answers are correct.
10) June’s direct manufacturing labor efficiency variance is:
A) $125 unfavorable
B) $125 favorable
C) $7,623.50 unfavorable
D) None of these answers are correct.
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