Piper Company should work 1,000 direct labor-hours to produce 250 units of product. During October the company worked 1,250 direct labor-hours and produced 300 units. The standard hours allowed for October would be:

1. Ideal standards do not allow for machine breakdowns and other normal inefficiencies.
TRUE

 2. The standard quantity or standard hours allowed refers to the amount of the input that should have been used to produce the actual output of the period.
TRUE

3. Material price variances are often isolated at the time materials are purchased, rather than when they are placed into production, to facilitate earlier recognition of variances.
TRUE

 4. Waste on the production line will result in a materials price variance.
FALSE

5. Inspection Time is generally considered to be value-added time.
FALSE

 6. Poorly trained workers could have an unfavorable effect on which of the following variances? 

a. Item A
b. Item B
C. Item C
d. Item D

 

7. Richter Corp. recorded the following entry in its general ledger:

The above journal entry indicates that:
a. the materials quantity variance for the period was favorable.
b. less materials were used in production during the period than was called for at standard.
C. the materials quantity variance for the period was unfavorable.
d. the actual price paid for the materials used in production was greater than the standard price allowed.

8. Buckler Company manufactures desks with vinyl tops. The standard material cost for the vinyl used per Model S desk is $27.00 based on 12 square feet of vinyl at a cost of $2.25 per square foot. A production run of 1,000 desks in March resulted in usage of 12,600 square feet of vinyl at a cost of $2.00 per square foot, a total cost of $25,200. The materials quantity variance resulting from the above production run was:
a. $1,200 unfavorable
B. $1,350 unfavorable
c. $1,800 favorable
d. $3,150 favorable

 

9. Raggs Corporation's standard wage rate is $12.20 per direct labor-hour (DLH) and according to the standards, each unit of output requires 3.9 DLHs. In April, 5,200 units were produced, the actual wage rate was $12.10 per DLH, and the actual hours were 24,150 DLHs. The Labor Rate Variance for April would be recorded as a:
a. credit of $2,028.
B. credit of $2,415.
c. debit of $2,028.
d. debit of $2,415.

 

 10. Piper Company should work 1,000 direct labor-hours to produce 250 units of product. During October the company worked 1,250 direct labor-hours and produced 300 units. The standard hours allowed for October would be: 
a. 1,250 hours
b. 1,000 hours
C. 1,200 hours
d. it is impossible to determine from the data given.

 11. The following labor standards have been established for a particular product: 
 

What is the labor efficiency variance for the month?
a. $3,025 U
b. $5,400 U
c. $3,025 F
D. $5,475 U

 
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