131.
Standard
Actual
Variable OH Rate
$3.35
Fixed OH Rate
$1.80
Hours
18,900
17,955
Fixed Overhead
$46,000
Factory Overhead
$101,450
Calculate the variable factory overhead controllable variance using the above information:
A. $8,981.75 Favorable
B. $7,280.75 Unfavorable
C. $8,981.75 Unfavorable
D. $7,280.75 Favorable
132. A negative fixed overhead volume variance can be caused due to the following except:
A. Sales orders at a low level
B. Machine breakdowns
C. Employee inexperience
D. Increase in utility costs
133. At the end of the fiscal year, variances from standard costs are usually transferred to the:
A. direct labor account
B. factory overhead account
C. cost of goods sold account
D. direct materials account
134. Variances from standard costs are usually reported to:
A. suppliers
B. stockholders
C. management
D. creditors
135. If at the end of the fiscal year the variances from standard are significant, the variances should be transferred to the:
A. work in process account
B. cost of goods sold account
C. finished goods account
D. work in process, cost of goods sold, and finished goods accounts
136. Assuming that the Morrita Desk Co. purchases 8,000 feet of lumber at $5.50 per foot and the standard price for direct materials is $5.00, the entry to record the purchase and unfavorable direct materials price variance is:
A. Direct Materials 40,000
Direct Materials Price Variance 4,000
Accounts Payable 44,000
B. Direct Materials 40,000
Accounts Payable 40,000
C. Direct Materials 44,000
Direct Materials Price Variance 4,000
Accounts Payable 40,000
D. Work in Process 44,000
Direct Materials Price Variance 4,000
Accounts Payable 40,000
137. A company records their inventory purchases at standard cost but also records purchase price variances. The company purchased 5,000 widgets $8.00, the standard cost for the widgets is $7.90. Which of the following would be included in the journal entry?
A. $39,500 Debit to Accounts Payable
B. $500 Credit to Direct Materials Price Variance
C. $39,500 Credit to Accounts Payable
D. $500 Debit to Direct Materials Price Variance
138. The use of standards for nonmanufacturing expenses is:
A. not as common as it is for manufacturing costs
B. as common as it is for manufacturing costs
C. not useful
D. impossible
139. Diamond Company produces a chair that requires 5 yds. of material per unit. The standard price of one yard of material is $7.50. During the month, 8,500 chairs were manufactured, using 43,700 yards at a cost of $7.60. Determine the (a) price variance, (b) quantity variance, and (c) cost variance.
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