Question

1. Would the following lead to a FAVORABLE or UNFAVORABLE Direct Labor Cost Variance.

Spring 20 Company paid workers $20 per hour. The budget was produced based on workers being paid $19 per hour.  

2. Spring 20 Company uses standard costs for its manufacturing division. Standards specify 0.2 direct labor hours per unit of product.

Based on the following budget information, what is the Variable Overhead Standard Cost per DLH?

Production volume	6,500 units
Budgeted variable overhead costs	$20,000
Budgeted direct labor hours	1300 hours

3. The ________ details how the business expects to go from the beginning cash balance to the desired ending cash balance and feeds to the budgeted financial statements..

(Is this Cash Budget?) I'm not sure about this one

4.

Define/Describe the Direct Materials Cost Variance, include the formula as part of your answer.

5.

When the sales volume changes but remains within the relevant range, state which of these items on a flexible budget would change and which would remain constant:

a) Total Contribution Margin: remain constant or change

b) Variable cost per unit: remain constant or change

c) Total Fixed Cost: remain constant or change

You must choose either REMAIN CONTANT or CHANGE for each item given

Answer 1

1. Would the following lead to a FAVORABLE or UNFAVORABLE Direct Labor Cost Variance.

Spring 20 Company paid workers $20 per hour. The budget was produced based on workers being paid $19 per hour.  

UNFAVORABLE Direct Labor Cost Variance as the workers were paid ( 20 - 19 ) $ 1 more per hour.

2.what is the Variable Overhead Standard Cost per DLH?

Variable Overhead Standard Cost per DLH = 20000 / 13000 =$ 1.54 per DLH

Variable Overhead Standard Cost = ( 6500 * 0.2 ) DLH * ( 20000 / 13000 ) = $ 2000

3. Cash budget

4. Direct Materials Cost Variance = Standard cost allowed for materiala - Actual Cost incurred

( SP * SQ allowed ) - ( AQ * AP )

5.

a) Total Contribution Margin: change

b) Variable cost per unit: remain constant ( per unit remains constant and in total changes )

c) Total Fixed Cost: remain constant