Question 1

Total overhead variance.
(b) Prepare the journal entries to record the transactions and events in 2016.

Accepted Answer

The answer of Total overhead variance.
(b) Prepare the journal entries...

Question 2

A managerial accountant
1) does not participate in the standard setting process.
2) provides knowledge of cost behaviors in the standard setting process.
3) provides input of historical costs to the standard setting process.

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  2 and 3 
A)  1 
B)  2 
C)  3 
D)  2 and 3

Question 3

A standard cost system may be used with a job order cost system but not with a process cost system.

Accepted Answer

A) True 
 B)False

Question 4

The overhead controllable variance relates primarily to fixed overhead costs.

Accepted Answer

A) True 
 B)False

Question 5

Pane Corp. manufactures and sells a nutrition drink for children. It wants to develop a standard cost per gallon. The following are required for production of a 100 gallon batch:
1960 ounces of lime Kool-Drink at $.12 per ounce
40 pounds of granulated sugar at $.60 per pound
63 kiwi fruit at $.50 each
100 protein tablets at $.90 each
4000 ounces of water at $.003 per ounce
Pane estimates that 2% of the lime Kool-Drink is wasted 20% of the sugar is lost and 10% of the kiwis cannot be used.
Instructions
Compute the standard cost of the ingredients for one gallon of the nutrition drink.

Accepted Answer

None

Question 6

The standard rate of pay is $20 per direct labor hour. If the actual direct labor payroll was $117600 for 6000 direct labor hours worked the direct labor price (rate) variance is

Accepted Answer

A)  $2400 unfavorable. 
B)  $2400 favorable. 
C)  $3000 unfavorable. 
D)  $3000 favorable. 
A)  $2400 unfavorable. 
B)  $2400 favorable. 
C)  $3000 unfavorable. 
D)  $3000 favorable.

Question 7

The standard predetermined overhead rate must be based on direct labor hours as the standard activity index.

Accepted Answer

A) True 
 B)False

Question 8

Denmark Corporation's variance report for the purchasing department reports 1000 units of material A purchased and 2400 units of material B purchased. It also reports standard prices of $2 for Material A and $3 for Material B. Actual prices reported are $2.10 for Material A and $2.80 for Material B. Denmark should report a total price variance of

Accepted Answer

A)  $380 F. 
B)  $340 F. 
C)  $340 U. 
D)  $380 U. 
A)  $380 F. 
B)  $340 F. 
C)  $340 U. 
D)  $380 U.

Question 9

Seacoast Company provided the following information about its standard costing system for 2016:   Instructions
Calculate the labor price variance and the labor quantity variance.

Accepted Answer

Labor price (rate) variance = (Actual ho

Question 10

The total overhead variance is the difference between actual overhead costs and overhead costs applied to work done.

Accepted Answer

A) True 
 B)False

Question 11

The labor time requirements for standards may be determined by the

Accepted Answer

A)  sales manager. 
B)  product manager. 
C)  industrial engineers. 
D)  payroll department manager. 
A)  sales manager. 
B)  product manager. 
C)  industrial engineers. 
D)  payroll department manager.

Question 12

Which of the following statements about standard costs is false?

Accepted Answer

A)  Properly set standards should promote efficiency. 
B)  Standard costs facilitate management planning. 
C)  Standards should not be used in "management by exception." 
D)  Standard costs can simplify the costing of inventories. 
A)  Properly set standards should promote efficiency. 
B)  Standard costs facilitate management planning. 
C)  Standards should not be used in "management by exception." 
D)  Standard costs can simplify the costing of inventories.

Question 13

Oxnard Industries produces a product that requires 2.6 pounds of materials per unit. The allowance for waste and spoilage per unit is .3 pounds and .1 pounds respectively. The purchase price is $2 per pound but a 2% discount is usually taken. Freight costs are $.10 per pound and receiving and handling costs are $.07 per pound. The hourly wage rate is $12.00 per hour but a raise which will average $.30 will go into effect soon. Payroll taxes are $1.20 per hour and fringe benefits average $2.40 per hour. Standard production time is 1 hour per unit and the allowance for rest periods and setup is .2 hours and .1 hours respectively. 
- The standard direct materials quantity per unit is

Accepted Answer

A)  2.6 pounds. 
B)  2.7 pounds. 
C)  2.9 pounds. 
D)  3.0 pounds. 
A)  2.6 pounds. 
B)  2.7 pounds. 
C)  2.9 pounds. 
D)  3.0 pounds.

Question 14

Standard costs may be used by

Accepted Answer

A)  universities. 
B)  governmental agencies. 
C)  charitable organizations. 
D)  All of these answers are correct. 
A)  universities. 
B)  governmental agencies. 
C)  charitable organizations. 
D)  All of these answers are correct.

Question 15

The standard number of hours that should have been worked for the output attained is 6000 direct labor hours and the actual number of direct labor hours worked was 6300. If the direct labor price variance was $3150 unfavorable and the standard rate of pay was $9 per direct labor hour what was the actual rate of pay for direct labor?

Accepted Answer

A)  $8.50 per direct labor hour 
B)  $7.50 per direct labor hour 
C)  $9.50 per direct labor hour 
D)  $9.00 per direct labor hour 
A)  $8.50 per direct labor hour 
B)  $7.50 per direct labor hour 
C)  $9.50 per direct labor hour 
D)  $9.00 per direct labor hour

Question 16

Overhead data for Glazier Inc. are given in BE 195. In addition the flexible manufacturing overhead budget shows that budgeted costs are $3.80 variable per direct labor hour and $60000 fixed.
Instructions
Compute the manufacturing overhead controllable variance.

Accepted Answer

Actual overhead - Overhead Bud

Question 17

An unfavorable labor quantity variance indicates that the actual number of direct labor hours worked was greater than the number of direct labor hours that should have been worked for the output attained.

Accepted Answer

A) True 
 B)False

Question 18

The following information was taken from the annual manufacturing overhead cost budget of Fergie Manufacturing. $\begin{array}{lr}
\text { Variable manufacturing overhead costs } & \$ 92,400 \
\text { Fixed manufacturing overhead costs } & \$ 55,440 \
\text { Normal production level in labor hours } & 30,800 \
\text { Normal production level in units } & 5,775 \
\text { Standard labor hours per unit } & 4
\end{array}$ During the year 5600 units were produced 18340 hours were worked and the actual manufacturing overhead was $151200. Actual fixed manufacturing overhead costs equaled budgeted fixed manufacturing overhead costs. Overhead is applied on the basis of direct labor hours.
-Fergie's total overhead variance is

Accepted Answer

A)  $1680 U. 
B)  $6160 U. 
C)  $7840 U. 
D)  $22400 U. 
A)  $1680 U. 
B)  $6160 U. 
C)  $7840 U. 
D)  $22400 U.

Question 19

Which one of the following describes the total overhead variance?

Accepted Answer

A)  The difference between what was actually incurred and the flexible budget amount 
B)  The difference between what was actually incurred and overhead applied 
C)  The difference between the overhead applied and the flexible budget amount 
D)  The difference between what was actually incurred and the total production budget 
A)  The difference between what was actually incurred and the flexible budget amount 
B)  The difference between what was actually incurred and overhead applied 
C)  The difference between the overhead applied and the flexible budget amount 
D)  The difference between what was actually incurred and the total production budget

Question 20

Debit balances in variance accounts represent

Accepted Answer

A)  unfavorable variances. 
B)  favorable variances. 
C)  favorable for price variances; unfavorable for quantity variances. 
D)  favorable for quantity variances; unfavorable for price variances. 
A)  unfavorable variances. 
B)  favorable variances. 
C)  favorable for price variances; unfavorable for quantity variances. 
D)  favorable for quantity variances; unfavorable for price variances.

Exam 25: Standard Costs and Balanced Scorecard

Total overhead variance. (b) Prepare the journal entries to record the transactions and events in 2016.

A managerial accountant 1) does not participate in the standard setting process. 2) provides knowledge of cost behaviors in the standard setting process. 3) provides input of historical costs to the standard setting process.

A standard cost system may be used with a job order cost system but not with a process cost system.

The overhead controllable variance relates primarily to fixed overhead costs.

The standard rate of pay is $20 per direct labor hour. If the actual direct labor payroll was $117600 for 6000 direct labor hours worked the direct labor price (rate) variance is

The standard predetermined overhead rate must be based on direct labor hours as the standard activity index.

Seacoast Company provided the following information about its standard costing system for 2016: Instructions Calculate the labor price variance and the labor quantity variance.

The total overhead variance is the difference between actual overhead costs and overhead costs applied to work done.

The labor time requirements for standards may be determined by the

Which of the following statements about standard costs is false?

Standard costs may be used by

Overhead data for Glazier Inc. are given in BE 195. In addition the flexible manufacturing overhead budget shows that budgeted costs are $3.80 variable per direct labor hour and $60000 fixed. Instructions Compute the manufacturing overhead controllable variance.

An unfavorable labor quantity variance indicates that the actual number of direct labor hours worked was greater than the number of direct labor hours that should have been worked for the output attained.

Which one of the following describes the total overhead variance?

Debit balances in variance accounts represent

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Budgetary Planning

Budgetary Control and Responsibility Accounting

Incremental Analysis and Capital Budgeting

Time Value of Money

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