Budgeting

Question 1

Budgeted Production

Answer 1

Budgeted sales
+ desired ending inventory
- beginning inventory
= budgeted production

Question 2

Direct labor budget

Answer 2

Budgeted production units
* labor hours per unit
* hourly wage assigned
= direct labor budget

Question 3

Direct Materials Price Variance

Answer 3

Actual quantity purchased * (Actual - Standard)

Question 4

Direct Materials Quantity Usage Variance

Answer 4

Standard price * (Actual quantity used- Standard quantity allowed)

Question 5

Direct Labor Price Variance

Answer 5

Actual labor hours used * (Actual wage - standard wage)

Question 6

Direct Labor Efficiency Variance

Answer 6

Standard wage * (Actual labor hours - Standard labor hours)

Question 7

Variable Overhead Spending Variance

Answer 7

Actual hours * (Actual rate - Standard rate)

Question 8

Variance Overhead Efficiency Variance

Answer 8

Standard rate * (Actual hours - Standard hours allowed for actual production volume)

Question 9

Fixed Overhead Spending Variance

Answer 9

Actual fixed overhead - Budgeted fixed overhead

Question 10

Fixed Overhead Volume Variance

Answer 10

Budgeted Fixed Overhead - (Standard rate * actual production)