Business Question Paper
BA 213 – Test 3 Review(Ch10,13 and 14) Instructor: Usha Ramanujam
1. Which of the following statements is a good description of the variances that should be investigated under the management by exception concept? A) all variances should be investigated. B) only unfavorable variances should be investigated. C) a small random sample of all variances should be investigated. D) unusually large favorable and unfavorable variances should be investigated.
2. The direct labor standards for a particular product are:
4 hours of direct labor @ $12.00 per direct labor-hour = $48.00
During October, 3,350 units of this product were made, which was 150 units less than budgeted. The labor cost incurred was $159,786 and 13,450 direct labor-hours were worked. The direct labor variances for the month were:
| |Labor Rate Variance |Labor Efficiency Variance |
|A) |$1,614 U |$600 U |
|B) |$1,614 U |$600 F |
|C) |$1,614 F |$600 U |
|D) |$1,614 F |$600 F |
Use the following to answer questions 3 and 4:
Stench Foods Company uses a standard cost system to collect costs related to the production of its garlic flavored yogurt. The garlic (materials) standards for each container of yogurt produced are 0.8 ounces of crushed garlic at a standard cost of $2.30 per ounce.
During the month of June, Stench purchased 75,000 ounces of crushed garlic at a total cost of $171,000. Stench used 64,000 of these ounces to produce 71,500 containers of yogurt. 3. What is Stench 's materials price variance for the month of June? A) $1,500 favorable B) $15,640 unfavorable C) $17,250
1. Which of the following statements is a good description of the variances that should be investigated under the management by exception concept? A) all variances should be investigated. B) only unfavorable variances should be investigated. C) a small random sample of all variances should be investigated. D) unusually large favorable and unfavorable variances should be investigated.
2. The direct labor standards for a particular product are:
4 hours of direct labor @ $12.00 per direct labor-hour = $48.00
During October, 3,350 units of this product were made, which was 150 units less than budgeted. The labor cost incurred was $159,786 and 13,450 direct labor-hours were worked. The direct labor variances for the month were:
| |Labor Rate Variance |Labor Efficiency Variance |
|A) |$1,614 U |$600 U |
|B) |$1,614 U |$600 F |
|C) |$1,614 F |$600 U |
|D) |$1,614 F |$600 F |
Use the following to answer questions 3 and 4:
Stench Foods Company uses a standard cost system to collect costs related to the production of its garlic flavored yogurt. The garlic (materials) standards for each container of yogurt produced are 0.8 ounces of crushed garlic at a standard cost of $2.30 per ounce.
During the month of June, Stench purchased 75,000 ounces of crushed garlic at a total cost of $171,000. Stench used 64,000 of these ounces to produce 71,500 containers of yogurt. 3. What is Stench 's materials price variance for the month of June? A) $1,500 favorable B) $15,640 unfavorable C) $17,250