Question :
Objective 7.5
1) Which of the following can be a reason : 1212130
Objective 7.5
1) Which of the following can be a reason for a favorable price variance for direct materials?
A) a decrease in the price of materials due to an oversupply of materials
B) an unexpected increase in the price of materials
C) less amount of material used during production than planned for actual output
D) workers taking less time to produce the products
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 that ________.
A) lower-quality materials were purchased
B) work is scheduled efficiently
C) there is an unexpected increase in direct labor rates
D) management hired underskilled workers
5) A favorable price variance for direct manufacturing labor might indicate that ________.
A) employees were paid more than planned
B) unexpected increase in direct labor rates
C) underskilled employees are being hired
D) congestion due to scheduling problems
6) An unfavorable efficiency variance for direct manufacturing labor might indicate that ________.
A) there is unexpected increase in direct labor rates
B) work is scheduled inefficiently
C) lower-quality materials were purchased
D) more higher-skilled workers were scheduled than planned
Answer the following questions using the information below:
Animent Industries, Inc. (AII), developed standard costs for direct material and direct labor. In 2015, AII estimated the following standard costs for one of their major products, the 10-gallon plastic container.
Budgeted quantityBudgeted price
Direct materials0.10 pounds$60 per pound
Direct labor0.05 hours$30 per hour
During June, AII produced and sold 20,000 containers using 1,900 pounds of direct materials at an average cost per pound of $64 and 1,000 direct manufacturing labor-hours at an average wage of $30.50 per hour.
7) June’s direct material flexible-budget variance is ________.
A) $7,200 unfavorable
B) $600 favorable
C) $1,600 unfavorable
D) $500 favorable
8) The direct material price variance during June is ________.
A) $7,600 unfavorable
B) $1,600 favorable
C) $1,600 unfavorable
D) $500 favorable
9) The direct manufacturing labor price variance during June is ________.
A) $500 unfavorable
B) $500 favorable
C) $7,600 unfavorable
D) 1,600 unfavorable
10) The direct manufacturing labor efficiency variance during June is ________.
A) $125 unfavorable
B) $500 favorable
C) $1,600 unfavorable
D) $0
