An unfavorable price variance for direct materials

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Survey of Accounting
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Chapter 13 / Exercise E13-23
Survey of Accounting
Warren
Expert Verified
109) An unfavorable price variance for direct materials might indicate: A) that the purchasing manager purchased in smaller quantities due to a change to just-in-time inventory methods B) congestion due to scheduling problems C) that the purchasing manager skillfully negotiated a better purchase price D) that the market had an unexpected oversupply of those materials Answer:
A Diff: 3 Terms: price variance Objective: 4 AACSB: Reflective thinking
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Survey of Accounting
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Chapter 13 / Exercise E13-23
Survey of Accounting
Warren
Expert Verified
27 110) A favorable efficiency variance for direct materials might indicate:
B Diff: 3 Terms: efficiency variance Objective: 4 AACSB: Analytical skills 111) A favorable price variance for direct manufacturing labor might indicate that:
C Diff: 3 Terms: price variance Objective: 4 AACSB: Analytical skills 112) An unfavorable efficiency variance for direct manufacturing labor might indicate that:
B Diff: 3 Terms: efficiency variance Objective: 4 AACSB: Ethical reasoning
28 Answer the following questions using the information below: Robb Industries, Inc. (RII), developed standard costs for direct material and direct labor. In 2004, RII estimated the following standard costs for one of their major products, the 10-gallon plastic container. Budgeted quantityBudgeted priceDirect materials 0.10 pounds $30 per pound Direct labor 0.05 hours $15 per hour During June, RII produced and sold 5,000 containers using 490 pounds of direct materials at an average cost per pound of $32 and 250 direct manufacturing labor-hours at an average wage of $15.25 per hour. 113) June's direct material flexible-budget variance is: A) $980 unfavorable B) $300 favorable C) $680 unfavorable D) None of these answers are correct. Answer: Explanation: C) (490 ×$32) -(5,000 ×0.10 ×$30) =
C
$680 U Diff: 2 Terms: flexible-budget variance Objective: 4 AACSB: Analytical skills 114) June's direct material price variance is:
A
Diff: 2 Terms: price variance Objective: 4 AACSB: Analytical skills

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