Question 1

Inventories cannot be valued at standard cost in financial statements.

Accepted Answer

A) True 
 B)False

Question 2

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 3

If standard costs are incorporated into the accounting system,

Accepted Answer

A)  it may simplify the costing of inventories and reduce clerical costs. 
B)  it can eliminate the need for the budgeting process. 
C)  the accounting system will produce information which is less relevant than the historical cost accounting system. 
D)  approval of the shareholders is required. 
A)  it may simplify the costing of inventories and reduce clerical costs. 
B)  it can eliminate the need for the budgeting process. 
C)  the accounting system will produce information which is less relevant than the historical cost accounting system. 
D)  approval of the shareholders is required.

Question 4

Information on Jayhawk's direct labor costs for the month of August is as follows: $\begin{array}{lr}
\text { Actual rate } & \$ 10 \
\text { Standard hours } & 11,000 \
\text { Actual hours } & 10,000 \
\text { Direct labor price variance\_unfavorable } & \$ 4,000
\end{array}$ What was the standard rate for August?

Accepted Answer

A)  $9.96 
B)  $9.60 
C)  $10.40 
D)  $10.04 
A)  $9.96 
B)  $9.60 
C)  $10.40 
D)  $10.04

Question 5

The standard number of hours that should have been worked for the output attained is 10,000 direct labor hours and the actual number of direct labor hours worked was 10,500. If the direct labor price variance was $10,500 unfavorable, and the standard rate of pay was $12 per direct labor hour, what was the actual rate of pay for direct labor?

Accepted Answer

A)  $11 per direct labor hour 
B)  $9 per direct labor hour 
C)  $13 per direct labor hour 
D)  $12 per direct labor hour 
A)  $11 per direct labor hour 
B)  $9 per direct labor hour 
C)  $13 per direct labor hour 
D)  $12 per direct labor hour

Question 6

If the standard hours allowed are less than the standard hours at normal capacity, the volume variance

Accepted Answer

A)  cannot be calculated. 
B)  will be favorable. 
C)  will be unfavorable. 
D)  will be greater than the controllable variance. 
A)  cannot be calculated. 
B)  will be favorable. 
C)  will be unfavorable. 
D)  will be greater than the controllable variance.

Question 7

In Zero Company's income statement, they report actual gross profit of $52,500 and the following variances: $\begin{array}{lrr}
\text { Materials price } & 420 \mathrm{~F} \
\text { Materials quantity } & 600 \mathrm{~F} \
\text { Labor price } & 420 \mathrm{U} \
\text { Labor quantity } & 1,000 \mathrm{~F} \
\text { Overhead } & 900 \mathrm{~F}
\end{array}$ Zero would report gross profit at standard of

Accepted Answer

A)  $46,660. 
B)  $47,500. 
C)  $50,000. 
D)  $53,340. 
A)  $46,660. 
B)  $47,500. 
C)  $50,000. 
D)  $53,340.

Question 8

The direct labor quantity standard is sometimes called the direct labor

Accepted Answer

A)  volume standard. 
B)  effectiveness standard. 
C)  efficiency standard. 
D)  quality standard. 
A)  volume standard. 
B)  effectiveness standard. 
C)  efficiency standard. 
D)  quality standard.

Question 9

If a company issues raw materials to production at a cost of $18,900 when the standard cost is $18,300, it will

Accepted Answer

A)  debit Materials Price Variance for $600. 
B)  credit Materials Price Variance for $600. 
C)  debit Materials Quantity Variance for $600. 
D)  credit Material Quantity Variance for $600. 
A)  debit Materials Price Variance for $600. 
B)  credit Materials Price Variance for $600. 
C)  debit Materials Quantity Variance for $600. 
D)  credit Material Quantity Variance for $600.

Question 10

A company uses 8,400 pounds of materials and exceeds the standard by 300 pounds. The quantity variance is $1,800 unfavorable. What is the standard price?

Accepted Answer

A)  $2 
B)  $4 
C)  $6 
D)  Cannot be determined from the data provided. 
A)  $2 
B)  $4 
C)  $6 
D)  Cannot be determined from the data provided.

Question 11

In using variance reports, top management normally looks carefully at every variance.

Accepted Answer

A) True 
 B)False

Question 12

The predetermined overhead rate for Zane Company is $5, comprised of a variable overhead rate of $3 and a fixed rate of $2. The amount of budgeted overhead costs at normal capacity of $150,000 was divided by normal capacity of 30,000 direct labor hours, to arrive at the predetermined overhead rate of $5. Actual overhead for June was $8,900 variable and $5,400 fixed, and 1,500 units were produced. The direct labor standard is 2 hours per unit produced. The total overhead variance is

Accepted Answer

A)  $1,800 F. 
B)  $700 F. 
C)  $700 U. 
D)  $1,800 U. 
A)  $1,800 F. 
B)  $700 F. 
C)  $700 U. 
D)  $1,800 U.

Question 13

A standard differs from a budget because a standard

Accepted Answer

A)  is a predetermined cost. 
B)  contributes to management planning and control. 
C)  is a unit amount. 
D)  none of these; a standard does not differ from a budget. 
A)  is a predetermined cost. 
B)  contributes to management planning and control. 
C)  is a unit amount. 
D)  none of these; a standard does not differ from a budget.

Question 14

Edgar, Inc. has a materials price standard of $2.00 per pound. Six thousand pounds of materials were purchased at $2.20 a pound. The actual quantity of materials used was 6,000 pounds, although the standard quantity allowed for the output was 5,400 pounds. Edgar, Inc.'s total materials variance is

Accepted Answer

A)  $2,400 U. 
B)  $2,400 F. 
C)  $2,520 U. 
D)  $2,520 F. 
A)  $2,400 U. 
B)  $2,400 F. 
C)  $2,520 U. 
D)  $2,520 F.

Question 15

Using standard costs

Accepted Answer

A)  makes employees less "cost-conscious." 
B)  provides a basis for evaluating cost control. 
C)  makes management by exception more difficult. 
D)  increases clerical costs. 
A)  makes employees less "cost-conscious." 
B)  provides a basis for evaluating cost control. 
C)  makes management by exception more difficult. 
D)  increases clerical costs.

Question 16

The two levels that standards may be set at are

Accepted Answer

A)  normal and fully efficient. 
B)  normal and ideal. 
C)  ideal and less efficient. 
D)  fully efficient and fully effective. 
A)  normal and fully efficient. 
B)  normal and ideal. 
C)  ideal and less efficient. 
D)  fully efficient and fully effective.

Question 17

Scorpion Production Company planned to use 1 yard of plastic per unit budgeted at $81 a yard. However, the plastic actually cost $80 per yard. The company actually made 3,900 units, although it had planned to make only 3,300 units. Total yards used for production were 3,960. How much is the total materials variance?

Accepted Answer

A)  $48,600 U 
B)  $4,860 U 
C)  $3,960 F 
D)  $900 U 
A)  $48,600 U 
B)  $4,860 U 
C)  $3,960 F 
D)  $900 U

Question 18

Dillon has a standard of 2 hours of labor per unit, at $12 per hour. In producing 2,000 units, Dillon used 3,850 hours of labor at a total cost of $46,970. Dillon's labor price variance is

Accepted Answer

A)  $770 U. 
B)  $800 U. 
C)  $1,030 F. 
D)  $1,930 F. 
A)  $770 U. 
B)  $800 U. 
C)  $1,030 F. 
D)  $1,930 F.

Question 19

The direct materials price standard should include an amount for all of the following except

Accepted Answer

A)  receiving costs. 
B)  storing costs. 
C)  handling costs. 
D)  normal spoilage costs. 
A)  receiving costs. 
B)  storing costs. 
C)  handling costs. 
D)  normal spoilage costs.

Question 20

A company developed the following per-unit standards for its product: 2 gallons of direct materials at $8 per gallon. Last month, 3,000 gallons of direct materials were purchased for $22,800. The direct materials price variance for last month was

Accepted Answer

A)  $22,800 favorable. 
B)  $600 favorable. 
C)  $1,200 favorable. 
D)  $1,200 unfavorable. 
A)  $22,800 favorable. 
B)  $600 favorable. 
C)  $1,200 favorable. 
D)  $1,200 unfavorable.

Inventories cannot be valued at standard cost in financial statements.

The labor time requirements for standards may be determined by the

If standard costs are incorporated into the accounting system,

Information on Jayhawk's direct labor costs for the month of August is as follows: Actual rate \ 10 Standard hours 11,000 Actual hours 10,000 Direct labor price variance\_unfavorable \ 4,000 What was the standard rate for August?

If the standard hours allowed are less than the standard hours at normal capacity, the volume variance

In Zero Company's income statement, they report actual gross profit of $52,500 and the following variances: Materials price 420 Materials quantity 600 Labor price 420 Labor quantity 1,000 Overhead 900 Zero would report gross profit at standard of

The direct labor quantity standard is sometimes called the direct labor

If a company issues raw materials to production at a cost of $18,900 when the standard cost is $18,300, it will

A company uses 8,400 pounds of materials and exceeds the standard by 300 pounds. The quantity variance is $1,800 unfavorable. What is the standard price?

In using variance reports, top management normally looks carefully at every variance.

A standard differs from a budget because a standard

Edgar, Inc. has a materials price standard of $2.00 per pound. Six thousand pounds of materials were purchased at $2.20 a pound. The actual quantity of materials used was 6,000 pounds, although the standard quantity allowed for the output was 5,400 pounds. Edgar, Inc.'s total materials variance is

Using standard costs

The two levels that standards may be set at are

Dillon has a standard of 2 hours of labor per unit, at $12 per hour. In producing 2,000 units, Dillon used 3,850 hours of labor at a total cost of $46,970. Dillon's labor price variance is

The direct materials price standard should include an amount for all of the following except

A company developed the following per-unit standards for its product: 2 gallons of direct materials at $8 per gallon. Last month, 3,000 gallons of direct materials were purchased for $22,800. The direct materials price variance for last month was

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Planning for Capital Investments

Statement of Cash Flows

Financial Statement Analysis

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Exam 11: Standard Costs and Balanced Scorecard

Inventories cannot be valued at standard cost in financial statements.

The labor time requirements for standards may be determined by the

If standard costs are incorporated into the accounting system,

Information on Jayhawk's direct labor costs for the month of August is as follows: Actual rate \ 10 Standard hours 11,000 Actual hours 10,000 Direct labor price variance\_unfavorable \ 4,000 What was the standard rate for August?

If the standard hours allowed are less than the standard hours at normal capacity, the volume variance

In Zero Company's income statement, they report actual gross profit of $52,500 and the following variances: Materials price 420 Materials quantity 600 Labor price 420 Labor quantity 1,000 Overhead 900 Zero would report gross profit at standard of

The direct labor quantity standard is sometimes called the direct labor

If a company issues raw materials to production at a cost of $18,900 when the standard cost is $18,300, it will

A company uses 8,400 pounds of materials and exceeds the standard by 300 pounds. The quantity variance is $1,800 unfavorable. What is the standard price?

In using variance reports, top management normally looks carefully at every variance.

A standard differs from a budget because a standard

Edgar, Inc. has a materials price standard of $2.00 per pound. Six thousand pounds of materials were purchased at $2.20 a pound. The actual quantity of materials used was 6,000 pounds, although the standard quantity allowed for the output was 5,400 pounds. Edgar, Inc.'s total materials variance is

Using standard costs

The two levels that standards may be set at are

Dillon has a standard of 2 hours of labor per unit, at $12 per hour. In producing 2,000 units, Dillon used 3,850 hours of labor at a total cost of $46,970. Dillon's labor price variance is

The direct materials price standard should include an amount for all of the following except

A company developed the following per-unit standards for its product: 2 gallons of direct materials at $8 per gallon. Last month, 3,000 gallons of direct materials were purchased for $22,800. The direct materials price variance for last month was

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Planning for Capital Investments

Statement of Cash Flows

Financial Statement Analysis

Filters