quiz-ma7-4

Management Accounting Chapter 7, Part 4

The following data apply to items 1-12 (Amount: in thousands of dollars)

The Nirvana Company has establish the following standard costs for one unit of its product:

Direct material (2 pounds at $6)	$12
Direct labor (0.5 hour at $14)	7
Variable overhead (0.5 hour at $4)	2
Fixed overhead (0.5 hour at $6)	3
Total	$24

The denominator activity used to compute predetermine manufacturing overhead rate is 20,000 direct labor hours.
During year 2025, the company produced 38,000 units of product and had the following actual operating results:

Materials purchased and used in production (76,500 pounds)	$451,350
Direct labor (19,150 hours)	272,696
Variable overhead	80,047
Fixed overhead	$118,800

1. The direct materials price variance is:

$7,600 unfavorable $7,600 favorable $7,650 unfavorable $7,650 favorable None of the above responses is correct.

2. The direct materials quantity (efficiency) variance is:

$2,000 favorable $2,000 unfavorable $3,000 favorable $3,000 unfavorable None of the above responses is correct.

3. The flexible-budget variance (total variance) for direct materials is:

$4,650 favorable $4,650 unfavorable $4,600 favorable $4,600 unfavorable None of the above responses is correct.

4. The direct labor rate (price) variance is:

$4,382 unfavorable $4,382 favorable $4,596 unfavorable $4,596 favorable None of the above responses is correct.

5. The direct labor efficiency variance is:

$2, 100 favorable $2, 100 unfavorable $2,000 favorable $2,000 unfavorable None of the above responses is correct.

6. The flexible-budget variance (total variance) for direct labor is:

$6,696 favorable $6,696 unfavorable $6,583 favorable $6,583 unfavorable None of the above responses is correct.

7. The variable overhead spending variance is:

$3,324 unfavorable $3,324 favorable $3,447 unfavorable $3,447 favorable None of the above responses is correct.

8. The variable overhead efficiency variance is:

$500 favorable $500 unfavorable $600 favorable $600 unfavorable None of the above responses is correct.

9. The flexible-budget variance (total variance) for variable overhead is:

$4,047 favorable $4,047 unfavorable $5,047 favorable $5,047 unfavorable None of the above responses is correct.

10. The budgeted fixed overhead is:

$114,000 $116,000 $118,000 $120,000 None of the above responses is correct.

11. The fixed overhead budget (spending) variance is:

$1,200 favorable $1,200 unfavorable $1,300 favorable $1,300 unfavorable None of the above responses is correct.

12. The fixed overhead production volume variance is:

$6,000 unfavorable $6,000 favorable $8,000 unfavorable $8,000 favorable None of the above responses is correct.