DVU Expense Variance and Cost Analysis Questions

1. Assume that the amount of one of a company’s variable expenses in its flexible budget is $40,000. The actual amount of the expense is $42,600 and the amount in the company’s planning budget is $44,000. The spending variance for this expense is:

2. Assume that a company has two cost drivers—number of courses and number of students. The planned number of courses and students were 5 and 100, respectively. The actual number of courses and students were 6 and 110, respectively. One of the company’s expenses is influenced by both cost drivers and it has a fixed element as well. Its cost formulas are $48 per course, $4 per student, and $1,000 per period. The total cost included in the planning budget for this expense would be:

3. Assume the following:

• The standard price per pound is $2.00.
• The standard quantity of pounds allowed per unit of finished goods is 4 pounds.
• The actual quantity of materials purchased and used in production is 50,300 pounds.
• The actual purchase price per pound of materials was $2.30.
• The company produced 13,000 units of finished goods during the period.
• What is the materials price variance?

4. Assume the following information appears in the standard cost card for a company that makes only one product:

	Standard Quantity or Hours	Standard Price or Rate	Standard Cost
Direct materials	5	pounds	$ 11.00	per pound	$ 55.00
Direct labor	2	hours	$ 17.00	per hour	$ 34.00
Variable manufacturing overhead	2	hours	$ 3.00	per hour	$ 6.00

During the most recent period, the following additional information was available:

• 21,400 pounds of material was purchased at a cost of $10.50 per pound.
• All of the material that was purchased was used to produce 3,900 units.
• 8,000 direct labor-hours were recorded at a total cost of $132,000.

What is the direct materials price variance?

5. Assume that a company uses a standard cost system and applies overhead to production based on direct labor-hours. It provided the following information for its most recent year:

Total budgeted fixed overhead cost for the year	$ 300,000
Actual fixed overhead cost for the year	$ 283,000
Budgeted direct labor-hours	60,000
Actual direct labor-hours	56,000
Standard direct labor-hours allowed for the actual output	58,000

What is the fixed overhead budget variance?