Question 1

It is possible that a company's financial statements may report inventories at

Accepted Answer

A)  budgeted costs. 
B)  standard costs. 
C)  both budgeted and standard costs. 
D)  none of these. 
A)  budgeted costs. 
B)  standard costs. 
C)  both budgeted and standard costs. 
D)  none of these.

Question 2

In developing a standard cost for direct materials used in making a product, consideration should be given to two factors: (1) __________________ per unit of direct materials and (2) the __________________ of direct materials to produce one unit of product.

Accepted Answer

The answer of In developing a standard cost for direct...

Question 3

The per-unit standards for direct materials are 2 gallons at $4 per gallon. Last month, 2,800 gallons of direct materials that actually cost $10,600 were used to produce 1,500 units of product. The direct materials quantity variance for last month was

Accepted Answer

A)  $800 favorable. 
B)  $600 favorable. 
C)  $800 unfavorable. 
D)  $1,400 unfavorable. 
A)  $800 favorable. 
B)  $600 favorable. 
C)  $800 unfavorable. 
D)  $1,400 unfavorable.

Question 4

Griffith Co. incurred direct labor costs of $48,000 for 6,000 hours. The standard labor cost was $48,600. During the month, Griffith assigned 6,000 direct labor hours costing $48,000 to production. The standard hours were 6,200.
Instructions
Journalize the transactions for Griffith Co. to account for this activity.

Accepted Answer

@#IMG-DLM& *$8.10 =

Question 5

A standard cost system may be used in

Accepted Answer

The answer of A standard cost system may be used...

Question 6

Finney Co. manufactures a product requiring two pounds of direct material. During 2011, Finney purchases 24,000 pounds of material for $74,400 when the standard price per pound is $3.00. During 2011, Finney uses 22,000 pounds to make 12,000 products. The standard direct material cost per unit of finished product is

Accepted Answer

A)  $6.20. 
B)  $6.76. 
C)  $6.00. 
D)  $6.40. 
A)  $6.20. 
B)  $6.76. 
C)  $6.00. 
D)  $6.40.

Question 7

In using variance reports, management looks for

Accepted Answer

A)  total assets invested. 
B)  significant variances. 
C)  competitors' costs in comparison to the company's costs. 
D)  more efficient ways of valuing inventories. 
A)  total assets invested. 
B)  significant variances. 
C)  competitors' costs in comparison to the company's costs. 
D)  more efficient ways of valuing inventories.

Question 8

Stumfoll Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product.   
During the month of April, the company manufactures 250 units and incurs the following actual costs.   
Instructions
Compute the total, price, and quantity variances for materials and labor.

Accepted Answer

Total materials variance:
(AQ * AP ) - (

Question 9

The overhead controllable variance is calculated as the difference between actual overhead costs incurred and the budgeted

Accepted Answer

A)  overhead costs for the standard hours allowed. 
B)  overhead costs applied to the product. 
C)  overhead costs at the normal level of activity. 
D)  fixed overhead costs. 
A)  overhead costs for the standard hours allowed. 
B)  overhead costs applied to the product. 
C)  overhead costs at the normal level of activity. 
D)  fixed overhead costs.

Question 10

The difference between actual quantity of materials times the standard price and standard quantity times the standard price is the materials ________________ variance.

Accepted Answer

The answer of The difference between actual quantity of materials...

Question 11

The investigation of materials price variance usually begins in the

Accepted Answer

A)  first production department. 
B)  purchasing department. 
C)  controller's office. 
D)  accounts payable department. 
A)  first production department. 
B)  purchasing department. 
C)  controller's office. 
D)  accounts payable department.

Question 12

The following direct materials data pertain to the operations of Osborn Manufacturing Company for the month of December.
Standard materials price $4.00 per pound
Actual quantity of materials purchased and used 16,500 pounds
The standard cost card shows that a finished product contains 4 pounds of materials. The 16,500 pounds were purchased in December at a discount of 5% from the standard price. In December, 4,000 units of finished product were manufactured.
Instructions
Prepare a matrix for materials and calculate the materials variances.

Accepted Answer

The answer of The following direct materials data pertain to...

Question 13

In reporting variances,

Accepted Answer

A)  promptness is relatively unimportant. 
B)  management normally investigates all variances. 
C)  the reports should facilitate management by exception. 
D)  the reports are not departmentalized. 
A)  promptness is relatively unimportant. 
B)  management normally investigates all variances. 
C)  the reports should facilitate management by exception. 
D)  the reports are not departmentalized.

Question 14

The formula for computing the overhead volume variance is

Accepted Answer

A)  fixed overhead rate times (actual hours less standard hours allowed). 
B)  variable overhead rate times (actual hours less standard hours allowed). 
C)  fixed overhead rate times (normal capacity hours less standard hours allowed). 
D)  variable overhead rate times (normal capacity hours less standard hours allowed). 
A)  fixed overhead rate times (actual hours less standard hours allowed). 
B)  variable overhead rate times (actual hours less standard hours allowed). 
C)  fixed overhead rate times (normal capacity hours less standard hours allowed). 
D)  variable overhead rate times (normal capacity hours less standard hours allowed).

Question 15

Standard costs

Accepted Answer

A)  may show past cost experience. 
B)  help establish expected future costs. 
C)  are the budgeted cost per unit in the present. 
D)  all of these. 
A)  may show past cost experience. 
B)  help establish expected future costs. 
C)  are the budgeted cost per unit in the present. 
D)  all of these.

Question 16

Which of the following statements is false?

Accepted Answer

A)  A standard cost is more accurate than a budgeted cost. 
B)  A standard is a unit amount. 
C)  In concept, standards and budgets are essentially the same. 
D)  The standard cost of a product is equivalent to the budgeted cost per unit of product. 
A)  A standard cost is more accurate than a budgeted cost. 
B)  A standard is a unit amount. 
C)  In concept, standards and budgets are essentially the same. 
D)  The standard cost of a product is equivalent to the budgeted cost per unit of product.

Question 17

Cinelli Company purchased 6,000 units of raw material on account for $11,700, when the standard cost was $12,000. Later in the month, Cinelli Company issued 5,600 units of raw materials for production, when the standard units were 5,800.
Instructions
Journalize the transactions for Cinelli Company to account for this activity.

Accepted Answer

@#IMG-DLM& *$2 = $12

Question 18

A manufacturing company would include setup and downtime in their direct

Accepted Answer

A)  materials price standard. 
B)  materials quantity standard. 
C)  labor price standard. 
D)  labor quantity standard. 
A)  materials price standard. 
B)  materials quantity standard. 
C)  labor price standard. 
D)  labor quantity standard.

Question 19

What does the controllable variance measure?

Accepted Answer

A)  Whether a company incurred more or less fixed overhead costs compared to the amount of overhead applied 
B)  Whether a company incurred more or less overhead costs than allowed 
C)  The efficiency of using variable overhead resources 
D)  Whether the production manager is able to control the production facility 
A)  Whether a company incurred more or less fixed overhead costs compared to the amount of overhead applied 
B)  Whether a company incurred more or less overhead costs than allowed 
C)  The efficiency of using variable overhead resources 
D)  Whether the production manager is able to control the production facility

Question 20

A standard is a unit amount, whereas a budget is a total amount.

Accepted Answer

A) True 
 B)False

Exam 25: Budgetary Control and Responsibility Accounting

It is possible that a company's financial statements may report inventories at

In developing a standard cost for direct materials used in making a product, consideration should be given to two factors: (1) __________________ per unit of direct materials and (2) the __________________ of direct materials to produce one unit of product.

The per-unit standards for direct materials are 2 gallons at $4 per gallon. Last month, 2,800 gallons of direct materials that actually cost $10,600 were used to produce 1,500 units of product. The direct materials quantity variance for last month was

A standard cost system may be used in

In using variance reports, management looks for

The overhead controllable variance is calculated as the difference between actual overhead costs incurred and the budgeted

The difference between actual quantity of materials times the standard price and standard quantity times the standard price is the materials ________________ variance.

The investigation of materials price variance usually begins in the

In reporting variances,

The formula for computing the overhead volume variance is

Standard costs

Which of the following statements is false?

A manufacturing company would include setup and downtime in their direct

What does the controllable variance measure?

A standard is a unit amount, whereas a budget is a total amount.

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 Analysis: the Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Standard Costs and Balanced Scorecard

Filters

In developing a standard cost for direct materials used in making a product, consideration should be given to two factors: (1) per unit of direct materials and (2) the of direct materials to produce one unit of product.