Question 1

Costs that do not vary in total during a period even though the volume of manufacturing activity changes are called ____________________ costs.

Accepted Answer

The answer of Costs that do not vary in total...

Question 2

An increase in activity level will result in:

Accepted Answer

A)  an increase in fixed unit cost. 
B)  an increase in unit variable cost. 
C)  decrease in fixed unit cost. 
D)  a decrease in unit variable cost. 
A)  an increase in fixed unit cost. 
B)  an increase in unit variable cost. 
C)  decrease in fixed unit cost. 
D)  a decrease in unit variable cost.

Question 3

The Costmore Company uses standard costing and has established the following standards for direct materials and direct labor for each unit it makes:   During July,the company made 4,000 units of product and used 13,000 gallons.The actual price paid for materials was $5.20 per gallon. Direct Labor used was 3,600 hours and workers were paid $11.75 per hour.
An analysis would indicate

Accepted Answer

A)  a $5,000 unfavorable materials quantity variance. 
B)  a $7,600 favorable materials quantity variance. 
C)  a $2,600 favorable materials quantity variance. 
D)  a $7,600 unfavorable materials quantity variance. 
A)  a $5,000 unfavorable materials quantity variance. 
B)  a $7,600 favorable materials quantity variance. 
C)  a $2,600 favorable materials quantity variance. 
D)  a $7,600 unfavorable materials quantity variance.

Question 4

Which of the following costs are generally semi-variable?

Accepted Answer

A)  clerical salaries 
B)  depreciation 
C)  repairs and maintenance 
D)  property taxes 
A)  clerical salaries 
B)  depreciation 
C)  repairs and maintenance 
D)  property taxes

Question 5

As the volume of output decreases,the fixed cost per unit of output increases.

Accepted Answer

A) True 
 B)False

Question 6

Standard costs reflect what costs should be for the units of product manufactured during the period under the normal efficient operating conditions.

Accepted Answer

A) True 
 B)False

Question 7

As the level of activity increases,the variable cost per unit of activity

Accepted Answer

A)  increases. 
B)  decreases. 
C)  does not change. 
D)  may increase or decrease. 
A)  increases. 
B)  decreases. 
C)  does not change. 
D)  may increase or decrease.

Question 8

Reelmates manufactures fishing poles.In a recent month,the company budgeted production of 2,000 poles.Actual production was 2,200.According to the standard cost card,each pole requires 3 feet of fiberglass rod at a cost of $9 per foot.Reelmates used 6,500 feet of rod at a net cost of $65,000 for the period. The total material variance was:

Accepted Answer

A)  $900 unfavorable. 
B)  $900 favorable. 
C)  $6,500 favorable. 
D)  $5,600 unfavorable. 
A)  $900 unfavorable. 
B)  $900 favorable. 
C)  $6,500 favorable. 
D)  $5,600 unfavorable.

Question 9

Better Blankets,Inc.makes a SnuggieBlank using flannel material and trim binding.They have instituted a successful JIT system and thus no longer have to stock inventory prior to their production need.The Standard Cost Card for The SnuggieBlank model is shown.   The company reported the following results concerning January results:   The material quantity variance for Flannel used in January is:

Accepted Answer

A)  $2,700 favorable. 
B)  $2,700 unfavorable. 
C)  $7,500 favorable. 
D)  $7,500 unfavorable. 
A)  $2,700 favorable. 
B)  $2,700 unfavorable. 
C)  $7,500 favorable. 
D)  $7,500 unfavorable.

Question 10

If the standard cost for an item exceeds the actual cost,the variance is favorable.

Accepted Answer

A) True 
 B)False

Question 11

Which variance is controllable by the purchasing manager?

Accepted Answer

A)  standard overhead variance. 
B)  labor rate variance. 
C)  material usage variance. 
D)  material price variance. 
A)  standard overhead variance. 
B)  labor rate variance. 
C)  material usage variance. 
D)  material price variance.

Question 12

Develop the standard costs from the information given.Morlee Corporation makes three models of storage sheds.Model JB102 a 10' by 12' model that looks Victorian with windows,shutters and gingerbread along the roof line,is Morlee's most popular model.Direct materials for the JB102 consists of $66.00 for 7 sheets of pressed board,$59.00 for 2 × 4's for framing,$22.00 for roofing shingles,and $17.00 for aluminum siding.The nails,glue and other indirect materials for the company total $38,880 per year and are applied based on direct labor hours.The total direct labor hours for Morlee for one year are estimated to be 8,000 per year.Direct labor for each JB102 is estimated to be 7 hours.The average hourly rate at Morelee is $14.50.Prepare a standard cost card for Model JB102.Units and per unit amount for material can be omitted.

Accepted Answer

The answer of Develop the standard costs from the information...

Question 13

Complete the flexible budget for Cullville Industries for April 2016.Overhead is based on direct labor hours.

Accepted Answer

The answer of Complete the flexible budget for Cullville Industries...

Question 14

Petersen Company produces a single product with the following production and average cost data:   The best estimate of the variable cost per unit is:

Accepted Answer

A)  $36.00 per unit 
B)  $57.00 per unit 
C)  $15.00 per unit 
D)  $42.00 per unit 
A)  $36.00 per unit 
B)  $57.00 per unit 
C)  $15.00 per unit 
D)  $42.00 per unit

Question 15

The materials price variance for an item is the difference between its actual price and its standard cost

Accepted Answer

A)  multiplied by the actual quantity purchased. 
B)  multiplied by the standard quantity allowed. 
C)  multiplied by the difference between the actual quantity and the standard quantity. 
D)  divided by the actual quantity. 
A)  multiplied by the actual quantity purchased. 
B)  multiplied by the standard quantity allowed. 
C)  multiplied by the difference between the actual quantity and the standard quantity. 
D)  divided by the actual quantity.

Question 16

The range of activity at which the factory is likely to operate is referred to as the ____________________ range of activity.

Accepted Answer

The answer of The range of activity at which the...

Question 17

To separate the semi-variable costs into their fixed and variable components,one can use which of the following methods?

Accepted Answer

A)  labor variance method 
B)  material variance method 
C)  relevant range of activity method 
D)  high-low point method 
A)  labor variance method 
B)  material variance method 
C)  relevant range of activity method 
D)  high-low point method

Question 18

Canine Cottage Industries makes several specially designed doghouses.The Standard Cost Card for The Gables model is shown.A customer ordered three of this model for their Labrador retrievers.The Job Cost Sheet is shown.     From the information given for Canine Cottage Industries,compute the materials,quantity and price variances.

Accepted Answer

Summary of

Question 19

Variance analysis is a tool used by management to pinpoint inefficiencies in the manufacturing process.

Accepted Answer

A) True 
 B)False

Question 20

A key purpose of a manufacturing cost budget is to provide a basis for measuring performance.

Accepted Answer

A) True 
 B)False

Exam 29: Controlling Manufacturing Costs: Standard Costs

Costs that do not vary in total during a period even though the volume of manufacturing activity changes are called ____________________ costs.

An increase in activity level will result in:

Which of the following costs are generally semi-variable?

As the volume of output decreases,the fixed cost per unit of output increases.

Standard costs reflect what costs should be for the units of product manufactured during the period under the normal efficient operating conditions.

As the level of activity increases,the variable cost per unit of activity

If the standard cost for an item exceeds the actual cost,the variance is favorable.

Which variance is controllable by the purchasing manager?

Complete the flexible budget for Cullville Industries for April 2016.Overhead is based on direct labor hours.

Petersen Company produces a single product with the following production and average cost data: The best estimate of the variable cost per unit is:

The materials price variance for an item is the difference between its actual price and its standard cost

The range of activity at which the factory is likely to operate is referred to as the ____________________ range of activity.

To separate the semi-variable costs into their fixed and variable components,one can use which of the following methods?

Variance analysis is a tool used by management to pinpoint inefficiencies in the manufacturing process.

A key purpose of a manufacturing cost budget is to provide a basis for measuring performance.

Accounting: the Language of Business

Analyzing Business Transactions

Analyzing Business Transactions Using T Accounts

The General Journal and the General Ledger

Adjustments and the Worksheet

Closing Entries and the Postclosing Trial Balance

Accounting for Sales and Accounts Receivable

Accounting for Purchases and Accounts Payable

Cash Receipts, Cash Payments, and Banking Procedures

Payroll Computations, Records, and Payment

Payroll Taxes, Deposits, and Reports

Accruals, Deferrals, and the Worksheet

Financial Statements and Closing Procedures

Accounting Principles and Reporting Standards

Accounts Receivable and Uncollectible Accounts

Notes Payable and Notes Receivable

Merchandise Inventory

Property, Plant, and Equipment

Accounting for Partnerships

Corporations: Formation and Capital Stock Transactions

Corporate Earnings and Capital Transactions

Long-Term Bonds

Financial Statement Analyses

The Statement of Cash Flows

Departmentalized Profit and Cost Centers

Accounting for Manufacturing Activities

Job Order Cost Accounting

Process Cost Accounting

Cost-Revenue Analysis for Decision Making

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