Question 1: What limits the usefulness of static budget performance reports?
Question 2: What is a price variance and what is an efficiency variance?
Question 3: Describe the concept of management by exception and explain how standard costs help managers apply this concept to control costs.
1. Walker Enterprise collected the following data regarding production of one of its products.
Direct materials standard (6 lbs. @ $2/lb.)$12 per finished unit
Actual direct materials used             243,000lbs.
Actual finished units produced       40,000units
Actual cost of direct materials used $483,570

REQUIRED:
A. Compute the standard quantity allowed for the actual output.
B. Compute the total direct materials cost variance.
C. Compute the direct materials price variance.
D. Compute the direct materials quantity (efficiency) variance.

2. Walker Enterprise collected the following data regarding production of one of its products. Compute the total direct labor cost variance.
Direct labor standard (2 hrs. @ $12.75/hr.) $25.50per finished unit
Actual direct labor hours                   81,500hrs.
Actual finished units produced          40,000units
Actual cost of direct labor                   $1,100,250
REQUIRED:
A. Computer the total direct labor cost variance.
B. Compute the direct labor rate variance.
C. Compute the direct labor efficiency variance.

Question 1: What limits the usefulness of static budget performanc...