Question 1

Lack of enough sales orders to keep a factory operating at normal capacity results in an unfavorable:

Accepted Answer

A)  direct materials quantity variance. 
B)  fixed factory overhead volume variance. 
C)  budgeted variable factory overhead variance. 
D)  fixed factory overhead controllable variance. 
A)  direct materials quantity variance. 
B)  fixed factory overhead volume variance. 
C)  budgeted variable factory overhead variance. 
D)  fixed factory overhead controllable variance.

Question 2

Cape Corporation sells a single product.Budgeted sales for the year are anticipated to be 640,000 units, estimated beginning inventory is 98,000 units, and desired ending inventory is 80,000 units.The quantities of direct materials expected to be used for each unit of finished product are given below. ? $\begin{array}{lll}
\text { Material A } & .50 \mathrm{lb} \text { per unit } & @ \$ 0.60 \text { per pound } \
\text { Material B } & 1.00 \mathrm{lb} \text { per unit } & @ \$ 1.70 \text { per pound } \
\text { Material C } & 1.20 \mathrm{lb} \text { per unit } & @ \$ 1.00 \text { per pound }
\end{array}$ ?
The amount of direct material B purchased during the year is:

Accepted Answer

A)  $1,224,000. 
B)  $1,390,600. 
C)  $1,088,000. 
D)  $1,057,400. 
A)  $1,224,000. 
B)  $1,390,600. 
C)  $1,088,000. 
D)  $1,057,400.

Question 3

In a production budget, if the number of units expected to be sold during the year is 8,000, the number of units desired in ending inventory is 470 units, and the number of units in beginning inventory is 510 units, the total production for the year is:

Accepted Answer

A)  7,160. 
B)  6,660. 
C)  7,810. 
D)  7,960. 
A)  7,160. 
B)  6,660. 
C)  7,810. 
D)  7,960.

Question 4

The _____ is the difference between the actual variable overhead costs and the budgeted variable overhead for actual production.

Accepted Answer

A)  variable factory overhead quantity variance 
B)  variable factory overhead controllable variance 
C)  variable factory overhead rate variance 
D)  variable factory overhead volume variance 
A)  variable factory overhead quantity variance 
B)  variable factory overhead controllable variance 
C)  variable factory overhead rate variance 
D)  variable factory overhead volume variance

Question 5

The standard factory overhead rate is $7.50 per machine hour ($6.20 for variable factory overhead and $1.30 for fixed factory overhead) based on 100% capacity of 80,000 machine hours.The standard cost and the actual cost of factory overhead for the production of 15,000 units during August were as follows: $$\begin{array} { l l r } 
\text { Actual: } & \text { Variable factory overhead } & \$ 360,000 \
& \text { Fixed factory overhead } & 104,000 \
\text { Standard: } & 60,000 \text { hours at } \$ 7.50 & 450,000
\end{array}$$ ? What is the amount of the fixed factory overhead volume variance?

Accepted Answer

A)  $26,000 unfavorable 
B)  $12,000 favorable 
C)  $26,000 favorable 
D)  $12,000 unfavorable 
A)  $26,000 unfavorable 
B)  $12,000 favorable 
C)  $26,000 favorable 
D)  $12,000 unfavorable

Question 6

The following data relate to direct labor costs for the current period: $$\begin{array} { l l } 
\text { Standard costs } & 8,850 \text { hours at } \$ 6.50 \
\text { Actual costs } & 7,500 \text { hours at } \$ 6.25
\end{array}$$ ? What is the direct labor rate variance?

Accepted Answer

A)  $1,875.00 unfavorable 
B)  $2,212.50 unfavorable 
C)  $1,875.00 favorable 
D)  $2,212.50 favorable 
A)  $1,875.00 unfavorable 
B)  $2,212.50 unfavorable 
C)  $1,875.00 favorable 
D)  $2,212.50 favorable

Question 7

Based on the following information, calculate the direct labor rate variance. ? $$\begin{array} { l l } 
\text { Actual rate } & 2,500 \text { hours at } \$ 15.00 \
\text { Standard rate } & 2,650 \text { hours at } \$ 15.50
\end{array}$$

Accepted Answer

A)  1,250 favorable 
B)  1,000 unfavorable 
C)  2,500 favorable 
D)  1,300 unfavorable 
A)  1,250 favorable 
B)  1,000 unfavorable 
C)  2,500 favorable 
D)  1,300 unfavorable

Question 8

Following is the information about Standard Inc. The standard costs and actual costs for direct materials, direct labor, and factory overhead for the manufacture of 2,500 units of product are as follows: $\text { Standard Costs }$ 
$\begin{array}{ll}
\text { Direct materials } & 2,500 \text { kilograms } @ \$ 8 \
\text { Direct labor } & 7,500 \text { hours } @ \$ 12
\end{array}$

$\underline{\text { Actual Costs} }$
$\begin{array}{ll}
\text { Direct materials } & 2,600 \text { kilograms } @ \$ 8.75 \
\text { Direct labor } & 7,400 \text { hours } @ \$ 11.40
\end{array}$

$\text { Factory overhead ( } 100 \% \text { capacity - } 10,000 \text { hrs.): }$

Variable cost $ @ \$ 2 $ per hour
 Total variable cost, $ \$ 18,000 $
 Fixed cost $ @ \$ 0.80 $ per hour 
Total fixed cost, $ \$ 8,000 $ ?
The amount of the direct materials quantity variance is:

Accepted Answer

A)  $875 favorable. 
B)  $875 unfavorable. 
C)  $800 favorable. 
D)  $800 unfavorable. 
A)  $875 favorable. 
B)  $875 unfavorable. 
C)  $800 favorable. 
D)  $800 unfavorable.

Question 9

​The following information is given for a company:
​ $$\begin{array} { l c l } 
& \text { Process A } & \text { Process B } \
\text { Units passing inspection } & 8,800 \text { units } & 3,000 \text { units } \
\text { Units entering process } & 10,000 \text { units } & 5,000 \text { units }
\end{array}$$ Calculate the (a) process yield for Process A, (b) process yield for Process B, and (c) overall process yield.

Accepted Answer

Process yield
Process A = Units passing

Question 10

An unfavorable time variance is caused by:

Accepted Answer

A)  a shortage of skilled employees. 
B)  improper scheduling of skilled employees. 
C)  lack of enough sales orders. 
D)  ow-quality (inferior) direct materials. 
A)  a shortage of skilled employees. 
B)  improper scheduling of skilled employees. 
C)  lack of enough sales orders. 
D)  ow-quality (inferior) direct materials.

Question 11

The _____ is held responsible for an unfavorable quantity variance caused by low-quality direct materials.

Accepted Answer

A)  sales department 
B)  investment department 
C)  purchasing department 
D)  operating department 
A)  sales department 
B)  investment department 
C)  purchasing department 
D)  operating department

Question 12

A budget performance report compares actual results with the budgeted amounts and reports differences for possible investigation.

Accepted Answer

A) True 
 B)False

Question 13

Kohlman Company began its operations on March 31 of the current year.Projected manufacturing costs for the first three months of business are $156,800, $195,200, and $217,600, respectively, for April, May, and June.Depreciation, insurance, and property taxes represent $28,800 of the estimated monthly manufacturing costs.Insurance was paid on March 31, and property taxes will be paid in November.Three-fourths of the remainder of the manufacturing costs are expected to be paid in the month in which they are incurred with the balance to be paid in the following month. The cash payments for manufacturing in the month of May are:

Accepted Answer

A)  $185,600. 
B)  $156,800. 
C)  $124,800. 
D)  $146,400. 
A)  $185,600. 
B)  $156,800. 
C)  $124,800. 
D)  $146,400.

Question 14

If the standard to produce certain quantity of product is 16,000 hours at a factory overhead rate of $5 ($3 fixed, $2 variable), actual variable factory overhead is $26,400, actual fixed factory overhead is $45,000, and 100% of productive capacity is 15,000 hours, the volume variance is $3,000 favorable.

Accepted Answer

A) True 
 B)False

Question 15

If the standard to produce a given amount of product is 500 direct labor hours at $15 and the actual was 600 hours at $17, the time variance was $1,500 favorable.

Accepted Answer

A) True 
 B)False

Question 16

The standard factory overhead rate is $7.50 per machine hour ($6.20 for variable factory overhead and $1.30 for fixed factory overhead) based on 100% capacity of 80,000 machine hours.The standard cost and the actual cost of factory overhead for the production of 15,000 units during August were as follows: $$\begin{array} { l l r } 
\text { Actual: } & \text { Variable factory overhead } & \$ 360,000 \
& \text { Fixed factory overhead } & 104,000 \
\text { Standard: } & 60,000 \text { hours at } \$ 7.50 & 450,000
\end{array}$$ ? What is the amount of the variable factory overhead controllable variance?

Accepted Answer

A)  $12,000 unfavorable 
B)  $12,000 favorable 
C)  $14,000 unfavorable 
D)  $26,000 unfavorable 
A)  $12,000 unfavorable 
B)  $12,000 favorable 
C)  $14,000 unfavorable 
D)  $26,000 unfavorable

Question 17

Which of the following formulas is used to compute utilization rate?​

Accepted Answer

A)  Units entering process / Units passing inspection 
B)  ​Service units used / Available service units 
C)  ​Standard quantity / Actual quantity 
D)  ​(Actual price - standard price) × Actual quantity 
A)  Units entering process / Units passing inspection 
B)  ​Service units used / Available service units 
C)  ​Standard quantity / Actual quantity 
D)  ​(Actual price - standard price) × Actual quantity

Question 18

Production and sales estimates for June are as follows: $\begin{array}{lr}
\text { Estimated inventory (units), June 1 } & 8,000 \
\text { Desired inventory (units), June } 30 & 9,000 \
\text { Expected sal es volume (units): } & \
\text { Area X } & 3,000 \
\text { Area Y } & 4,000 \
\text { Area Z } & 5,500 \
\text { Unit sales price } & \$ 25
\end{array}$ ? The budgeted total sales for June is:

Accepted Answer

A)  $300,000. 
B)  $337,500. 
C)  $312,500. 
D)  $287,500. 
A)  $300,000. 
B)  $337,500. 
C)  $312,500. 
D)  $287,500.

Question 19

If skilled, highly paid employees are used in jobs that are normally performed by unskilled, lower-paid employees, it will result in:

Accepted Answer

A)  an unfavorable direct labor time variance. 
B)  a favorable variable overhead variance. 
C)  a favorable direct labor rate variance. 
D)  an unfavorable direct labor rate variance. 
A)  an unfavorable direct labor time variance. 
B)  a favorable variable overhead variance. 
C)  a favorable direct labor rate variance. 
D)  an unfavorable direct labor rate variance.

Question 20

Below is budgeted production and sales information for Octofic Cans, Inc.for the month of March: $$\begin{array} { l l l } 
&  { \text { Aluminum } } & { \text { Tin } } \
\text { Estimated beginning inventory } & 12,000 \text { units } & 6,000 \text { units } \
\text { Desired ending inventory } & 15,000 \text { units } & 4,000 \text { units } \
\text { Region I, anticipated sales } & 380,000 \text { units } & 85,000 \text { units } \
\text { Region II, anticipated sales } & 125,000 \text { units } & 25,000 \text { units }
\end{array}$$ ? The unit selling price for aluminum cans is $0.15 and for tin cans is $0.20.
Budgeted sales for the month are:

Accepted Answer

A)  $97,550. 
B)  $123,000. 
C)  $82,750. 
D)  $81,550. 
A)  $97,550. 
B)  $123,000. 
C)  $82,750. 
D)  $81,550.

Lack of enough sales orders to keep a factory operating at normal capacity results in an unfavorable:

In a production budget, if the number of units expected to be sold during the year is 8,000, the number of units desired in ending inventory is 470 units, and the number of units in beginning inventory is 510 units, the total production for the year is:

The _____ is the difference between the actual variable overhead costs and the budgeted variable overhead for actual production.

The following data relate to direct labor costs for the current period: Standard costs 8,850 hours at \ 6.50 Actual costs 7,500 hours at \ 6.25 ? What is the direct labor rate variance?

Based on the following information, calculate the direct labor rate variance. ? Actual rate 2,500 hours at \ 15.00 Standard rate 2,650 hours at \ 15.50

The following information is given for a company: Process A Process B Units passing inspection 8,800 units 3,000 units Units entering process 10,000 units 5,000 units Calculate the (a) process yield for Process A, (b) process yield for Process B, and (c) overall process yield.

An unfavorable time variance is caused by:

The _____ is held responsible for an unfavorable quantity variance caused by low-quality direct materials.

A budget performance report compares actual results with the budgeted amounts and reports differences for possible investigation.

If the standard to produce a given amount of product is 500 direct labor hours at $15 and the actual was 600 hours at $17, the time variance was $1,500 favorable.

Which of the following formulas is used to compute utilization rate?

Production and sales estimates for June are as follows: Estimated inventory (units), June 1 8,000 Desired inventory (units), June 30 9,000 Expected sal es volume (units): Area X 3,000 Area Y 4,000 Area Z 5,500 Unit sales price \ 25 ? The budgeted total sales for June is:

If skilled, highly paid employees are used in jobs that are normally performed by unskilled, lower-paid employees, it will result in:

The Role of Accounting in Business

Basic Accounting Systems: Cash Basis

Basic Accounting Systems: Accrual Basis

Accounting for Merchandising Businesses

Internal Control and Cash

Receivables and Inventories

Fixed Assets, Natural Resources, and Intangible Assets

Liabilities and Stockholders Equity

Metric Analysis of Financial Statements

Accounting for Manufacturing Operations

Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters

Exam 13: Budgeting and Standard Costs

Lack of enough sales orders to keep a factory operating at normal capacity results in an unfavorable:

In a production budget, if the number of units expected to be sold during the year is 8,000, the number of units desired in ending inventory is 470 units, and the number of units in beginning inventory is 510 units, the total production for the year is:

The _____ is the difference between the actual variable overhead costs and the budgeted variable overhead for actual production.

The following data relate to direct labor costs for the current period: Standard costs 8,850 hours at \ 6.50 Actual costs 7,500 hours at \ 6.25 ? What is the direct labor rate variance?

Based on the following information, calculate the direct labor rate variance. ? Actual rate 2,500 hours at \ 15.00 Standard rate 2,650 hours at \ 15.50

​The following information is given for a company: ​ Process A Process B Units passing inspection 8,800 units 3,000 units Units entering process 10,000 units 5,000 units Calculate the (a) process yield for Process A, (b) process yield for Process B, and (c) overall process yield.

An unfavorable time variance is caused by:

The _____ is held responsible for an unfavorable quantity variance caused by low-quality direct materials.

A budget performance report compares actual results with the budgeted amounts and reports differences for possible investigation.

If the standard to produce a given amount of product is 500 direct labor hours at $15 and the actual was 600 hours at $17, the time variance was $1,500 favorable.

Which of the following formulas is used to compute utilization rate?​

Production and sales estimates for June are as follows: Estimated inventory (units), June 1 8,000 Desired inventory (units), June 30 9,000 Expected sal es volume (units): Area X 3,000 Area Y 4,000 Area Z 5,500 Unit sales price \ 25 ? The budgeted total sales for June is:

If skilled, highly paid employees are used in jobs that are normally performed by unskilled, lower-paid employees, it will result in:

The Role of Accounting in Business

Basic Accounting Systems: Cash Basis

Basic Accounting Systems: Accrual Basis

Accounting for Merchandising Businesses

Internal Control and Cash

Receivables and Inventories

Fixed Assets, Natural Resources, and Intangible Assets

Liabilities and Stockholders Equity

Metric Analysis of Financial Statements

Accounting for Manufacturing Operations

Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters

The following information is given for a company: Process A Process B Units passing inspection 8,800 units 3,000 units Units entering process 10,000 units 5,000 units Calculate the (a) process yield for Process A, (b) process yield for Process B, and (c) overall process yield.

Which of the following formulas is used to compute utilization rate?