Question 1

Changes in technology, machinery, or production methods may make past cost data irrelevant when setting standards.

Accepted Answer

A) True 
 B)False

Question 2

Match each of the following descriptions with the term (a-e) it describes.
-Actual cost > standard cost at actual volumes

Accepted Answer

A) Ideal standard 
B) Nonfinancial performance measure 
C) Currently attainable standard 
D) Unfavorable cost variance 
E) Favorable cost variance 
A) Ideal standard 
B) Nonfinancial performance measure 
C) Currently attainable standard 
D) Unfavorable cost variance 
E) Favorable cost variance

Question 3

Standards are more widely used for nonmanufacturing activities than for manufacturing activities.

Accepted Answer

A) True 
 B)False

Question 4

The unfavorable volume variance may be due to all of the following factors except

Accepted Answer

A)  failure to maintain an even flow of work 
B)  machine breakdowns 
C)  unexpected increases in the cost of utilities 
D)  failure to obtain enough sales orders 
A)  failure to maintain an even flow of work 
B)  machine breakdowns 
C)  unexpected increases in the cost of utilities 
D)  failure to obtain enough sales orders

Question 5

Use this information for Stringer Company to answer the questions that follow.
​The following data are given for Stringer Company:
​
   Overhead is applied on standard labor hours.
-The direct materials quantity variance is

Accepted Answer

A)  $22,800 favorable 
B)  $22,800 unfavorable 
C)  $52,000 favorable 
D)  $52,000 unfavorable 
A)  $22,800 favorable 
B)  $22,800 unfavorable 
C)  $52,000 favorable 
D)  $52,000 unfavorable

Question 6

-The direct labor time variance is

Accepted Answer

A)  $6,000 favorable 
B)  $6,000 unfavorable 
C)  $33,000 unfavorable 
D)  $33,000 favorable 
A)  $6,000 favorable 
B)  $6,000 unfavorable 
C)  $33,000 unfavorable 
D)  $33,000 favorable

Question 7

Match each of the following descriptions with the term (a-e) it describes.
-An example is the number of customer complaints

Accepted Answer

A) Ideal standard 
B) Nonfinancial performance measure 
C) Currently attainable standard 
D) Unfavorable cost variance 
E) Favorable cost variance 
A) Ideal standard 
B) Nonfinancial performance measure 
C) Currently attainable standard 
D) Unfavorable cost variance 
E) Favorable cost variance

Question 8

Match each of the following descriptions with the term (a-e) it describes.
-Actual cost < standard cost at actual volumes

Accepted Answer

A) Ideal standard 
B) Nonfinancial performance measure 
C) Currently attainable standard 
D) Unfavorable cost variance 
E) Favorable cost variance 
A) Ideal standard 
B) Nonfinancial performance measure 
C) Currently attainable standard 
D) Unfavorable cost variance 
E) Favorable cost variance

Question 9

If the standard to produce a given amount of product is 500 direct labor hours at $15 and the actual is 600 hours at $17, the rate variance is $1,200 favorable.

Accepted Answer

A) True 
 B)False

Question 10

Favorable volume variances may be harmful when

Accepted Answer

A)  machine repairs cause work stoppages 
B)  supervisors fail to maintain an even flow of work 
C)  production in excess of normal capacity cannot be sold 
D)  All of these choices 
A)  machine repairs cause work stoppages 
B)  supervisors fail to maintain an even flow of work 
C)  production in excess of normal capacity cannot be sold 
D)  All of these choices

Question 11

The fact that workers are unable to meet a properly determined direct labor standard is sufficient cause to change the standard.

Accepted Answer

A) True 
 B)False

Question 12

Use this information to answer the questions that follow.
​
The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory overhead) based on 100% of normal capacity of 30,000 direct labor hours. The standard cost and the actual cost of factory overhead for the production of 5,000 units during May were as follows:
​​
  
-What is the fixed factory overhead volume variance?

Accepted Answer

A)  $12,500 favorable 
B)  $10,000 unfavorable 
C)  $12,500 unfavorable 
D)  $10,000 favorable 
A)  $12,500 favorable 
B)  $10,000 unfavorable 
C)  $12,500 unfavorable 
D)  $10,000 favorable

Question 13

Normal standards allow for normal production difficulties and mistakes.

Accepted Answer

A) True 
 B)False

Question 14

Compute the standard cost for one hat, based on the following standards for each hat:

Accepted Answer

The answer of Compute the standard cost for one hat,...

Question 15

Jaxson Corporation has the following data related to direct labor costs for September: actual costs are 10,200 hours at $15.75 per hour and standard costs are 10,800 hours at $15.50 per hour.​What is the direct labor time variance?

Accepted Answer

A)  $9,300 favorable 
B)  $9,300 unfavorable 
C)  $9,450 favorable 
D)  $9,450 unfavorable 
A)  $9,300 favorable 
B)  $9,300 unfavorable 
C)  $9,450 favorable 
D)  $9,450 unfavorable

Question 16

If the actual quantity of direct materials used in producing a commodity differs from the standard quantity, the variance is a

Accepted Answer

A)  controllable variance 
B)  price variance 
C)  quantity variance 
D)  rate variance 
A)  controllable variance 
B)  price variance 
C)  quantity variance 
D)  rate variance

Question 17

While setting standards, managers should never allow for spoilage or machine breakdowns in their calculations.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is not a reason for a direct materials quantity variance?

Accepted Answer

A)  malfunctioning equipment 
B)  purchasing of inferior raw materials 
C)  increased material cost per unit 
D)  spoilage of materials 
A)  malfunctioning equipment 
B)  purchasing of inferior raw materials 
C)  increased material cost per unit 
D)  spoilage of materials

Question 19

Which of the following would not lend itself to applying direct labor variances?

Accepted Answer

A)  help desk assistant 
B)  research and development scientist 
C)  customer service personnel 
D)  telemarketer 
A)  help desk assistant 
B)  research and development scientist 
C)  customer service personnel 
D)  telemarketer

Question 20

The principle of exceptions allows managers to focus on correcting variances between standard costs and actual costs.

Accepted Answer

A) True 
 B)False

Exam 22: Evaluating Variances From Standard Costs

Changes in technology, machinery, or production methods may make past cost data irrelevant when setting standards.

Match each of the following descriptions with the term (a-e) it describes. -Actual cost > standard cost at actual volumes

Standards are more widely used for nonmanufacturing activities than for manufacturing activities.

The unfavorable volume variance may be due to all of the following factors except

Use this information for Stringer Company to answer the questions that follow. ​The following data are given for Stringer Company: ​ Overhead is applied on standard labor hours. -The direct materials quantity variance is

-The direct labor time variance is

Match each of the following descriptions with the term (a-e) it describes. -An example is the number of customer complaints

Match each of the following descriptions with the term (a-e) it describes. -Actual cost < standard cost at actual volumes

If the standard to produce a given amount of product is 500 direct labor hours at $15 and the actual is 600 hours at $17, the rate variance is $1,200 favorable.

Favorable volume variances may be harmful when

The fact that workers are unable to meet a properly determined direct labor standard is sufficient cause to change the standard.

Normal standards allow for normal production difficulties and mistakes.

Compute the standard cost for one hat, based on the following standards for each hat:

Jaxson Corporation has the following data related to direct labor costs for September: actual costs are 10,200 hours at $15.75 per hour and standard costs are 10,800 hours at $15.50 per hour.​What is the direct labor time variance?

If the actual quantity of direct materials used in producing a commodity differs from the standard quantity, the variance is a

While setting standards, managers should never allow for spoilage or machine breakdowns in their calculations.

Which of the following is not a reason for a direct materials quantity variance?

Which of the following would not lend itself to applying direct labor variances?

The principle of exceptions allows managers to focus on correcting variances between standard costs and actual costs.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Cost-Volume-Profit Analysis

Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Filters

Use this information for Stringer Company to answer the questions that follow. The following data are given for Stringer Company: Overhead is applied on standard labor hours. -The direct materials quantity variance is

Jaxson Corporation has the following data related to direct labor costs for September: actual costs are 10,200 hours at $15.75 per hour and standard costs are 10,800 hours at $15.50 per hour.What is the direct labor time variance?