Question : 31. Mystic Falls Inc.Mystic Falls Inc. bottles and sells a popular : 1291605

31. Mystic Falls Inc.
Mystic Falls Inc. bottles and sells a popular soft drink. In 2011, the company had expected to sell 1,000,000 bottles but actually bottled and sold 900,000 bottles. The standard direct materials cost for each bottle is $.40 comprised of 10 ounces at a cost of $.04 per ounce. During 2011, 10,000,000 ounces of material were purchased out of which 9,200,000 ounces were used at a cost of $.05 per ounce.

Refer to the Mystic Falls Inc. information above. The direct materials usage variance for 2011 was: 
A. $  8,000 U.
B. $  8,000 F.
C. $40,000 U.
D. $40,000 F.

32. Chapman Products has a favorable materials usage variance. Which of the following would be the most likely reason for this variance? 
A. The company under budgeted the quantity of material to be used for each unit.
B. The company purchased material at a price for less than what was expected.
C. The company’s employees were less trained than expected.
D. The company’s machines were better maintained resulting in lower wastage of materials.

33. Miller Company has an unfavorable materials price variance. Which of the following would be the least likely reason for this variance? 
A. The company purchased a higher quality material than was budgeted.
B. The company could not take advantage of quantity discounts.
C. The company used more material than was budgeted for in each unit.
D. The company under budgeted the standard price for materials.

34. When the quantity of materials purchased and materials used is different, which of the following is more relevant for the purpose of calculating the direct materials price variance? 
A. Standard quantity allowed
B. Actual quantity purchased
C. Actual quantity used
D. The lower of the standard quantity allowed and the actual quantity purchased

35. When the quantity of materials purchased and materials used is different, which of the following is more relevant for the purpose of calculating the direct materials usage variance? 
A. Actual quantity purchased
B. Actual quantity used
C. The lower of standard quantity allowed and actual quantity purchased
D. The lower of actual quantity used and actual quantity purchased

36. Byron Products has a favorable materials price variance. Which of the following would be the least likely reason for this variance? 
A. The company over budgeted the standard price for materials.
B. The company took advantage of quantity discounts from its suppliers.
C. The company’s employees were more efficient with the use of their production time.
D. The company purchased a substandard material at a cheaper price.

37. Tulley Manufacturing has an unfavorable direct labor rate variance. Which of the following would be the most likely reason for this variance? 
A. The company used lower-paid workers in the production process than they had expected.
B. Employees took a longer amount of time to produce the product than expected.
C. The company gave employees an unexpected raise due to union negotiations.
D. Employees used more direct materials in the production process than expected.

38. Bukowitz Inc. has a favorable direct labor rate variance. Which of the following would be the most likely reason for this variance? 
A. The company used lower-paid workers in the production process more than they had expected.
B. Employees took a shorter amount of time to produce the product than expected.
C. The company used a standard direct labor rate that was too low.
D. Employees used less direct materials in the production process than expected.

39. Dabney Inc. has a favorable direct labor efficiency variance. Which of the following would be the most likely reason for this variance? 
A. The company used lower-paid workers in the production process more than they had expected.
B. Employees took a shorter amount of time to produce the product than expected.
C. The company used a standard direct labor rate that was too low.
D. Employees used less direct materials in the production process than expected.

40. Peterson Inc. uses direct labor hours as the cost driver for variable overhead. Which of the following items does not need to be known, in order to calculate the variable overhead spending variance? 
A. Actual overhead costs
B. Actual direct labor hours
C. Standard variable overhead rate per direct labor hour
D. Standard direct labor hours allowed