1.
Assume that the amount of one of a company’s variable expenses in its flexible budget is $40,000. The actual amount of the expense is $4
,600 and the amount in the company’s planning budget is $44,000. The spending variance for this expense is:
2. Assume that a company has two cost drivers—number of courses and number of students. The planned number of courses and students were
and 100, respectively. The actual number of courses and students were 6 and 110, respectively. One of the company’s expenses is influenced by both cost drivers and it has a fixed element as well. Its cost formulas are $48 per course, $4 per student, and $1,000 per period. The total cost included in the planning budget for this expense would be:
3. Assume the following:
- The standard price
per pound is $2.00.
- The standard quantity of
pounds allowed per unit of finished goods is 4 pounds.
- The actual quantity of materials purchased and used in production is 50,300 pounds.
- The actual purchase price per pound of materials was $2.30.
- The company produced 13,000 units of finished goods during the period.
- What is the materials price variance?
4. Assume the following information appears in the standard cost card for a company that makes only one product:
| Standard Quantity or Hours | Standard Price or Rate | Standard Cost | |||
|---|---|---|---|---|---|
| $ 11.00 | $ 55.00 | ||||
| hours | $ 17.00 | per hour | $ 34.00 | ||
| $ 3.00 | $ 6.00 |
During the most recent period, the following additional information was available:
- 21,400 pounds of material was purchased at a cost of $10.50 per pound.
- All of the material that was purchased was used to produce 3,900 units.
- 8,000 direct labor-hours were recorded at a total cost of $132,000.
What is the direct materials price variance?
5. Assume that a company uses a standard cost system and applies overhead to production based on direct labor-hours. It provided the following information for its most recent year:
| $ 300,000 |
| $ 283,000 |
| 60,000 |
| 56,000 |
| 58,000 |
What is the fixed overhead budget variance?
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