Question 1

It is correct to rely exclusively on past cost data when establishing standards.

Accepted Answer

A) True 
 B)False

Question 2

Nonfinancial performance output measures are used to improve the input measures.

Accepted Answer

A) True 
 B)False

Question 3

The Finishing Department of Pinnacle Manufacturing Co. prepared the following factory overhead cost budget for October of the current year, during which it expected to operate at a 100% capacity of 10,000 machine hours.   
During October, the plant was operated for 9,000 machine hours and the factory overhead costs incurred were as follows: indirect factory wages, $16,400; power and light, $10,000; indirect materials, $3,000; supervisory salaries, $12,000; depreciation of plant and equipment, $8,800; insurance and property taxes, $3,200. 
Prepare a factory overhead cost variance report for October. (The budgeted amounts for actual amount produced should be based on 9,000 machine hours).

Accepted Answer

The answer of The Finishing Department of Pinnacle Manufacturing Co....

Question 4

Titus Company produced 8,900 units of a product that required 3.25 standard hours per unit. The standard fixed overhead cost per unit is $1.20 per hour at 29,000 hours, which is 100% of normal capacity. 
Determine the fixed factory overhead volume variance.

Accepted Answer

The fixed factory overhead vol

Question 5

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows:   The amount of the fixed factory overhead volume variance is

Accepted Answer

A)  $2,000 favorable 
B)  $2,000 unfavorable 
C)  $2,500 unfavorable 
D)  $0 
A)  $2,000 favorable 
B)  $2,000 unfavorable 
C)  $2,500 unfavorable 
D)  $0

Question 6

The following data is given for the Harry Company:   Overhead is applied on standard labor hours. (Round interim calculations to the nearest cent.)
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

Standard and actual costs for direct labor for the manufacture of 300 units of product were as follows: 
Actual costs: 125 hours @ $54.00 
Standard costs: 131 hours @ $53.00 
Determine the direct labor:
(a) time variance
(b) rate variance
(c) total cost variance.

Accepted Answer

The answer of Standard and actual costs for direct labor...

Question 8

Using the following information, prepare a factory overhead flexible budget for Andover Company where the total factory overhead cost is $75,500 at normal capacity (100%). Include capacity at 75%, 90%, 100%, and 110%. Total variable cost is $6.25 per unit and total fixed costs are $38,000. The information is for month ended August 31.  (Hint: Determine units produced at normal capacity.)

Accepted Answer

The answer of Using the following information, prepare a factory...

Question 9

A favorable cost variance occurs when the actual cost is less than the budgeted cost at actual volumes.

Accepted Answer

A) True 
 B)False

Question 10

Robin Company purchased and used 500 pounds of direct materials to produce a product with a 520 pound standard direct materials requirement. The standard materials price is $1.90 per pound. The actual materials price was $2.00 per pound. 
Prepare the journal entries to record: 
(1) the purchase of the materials
(2) the material entering production.

Accepted Answer

The answer of Robin Company purchased and used 500 pounds...

Question 11

Ruby Company produces a chair that requires 5 yards of material per unit. The standard price of one yard of material is $7.60. During the month, 8,500 chairs were manufactured, using 40,000 yards at a cost of $7.50. 
Determine:
(a) price variance
(b) quantity variance 
(c) total cost variance.

Accepted Answer

(a) Price variance = ($7.50 -

Question 12

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 rate variance was $1,200 favorable.

Accepted Answer

A) True 
 B)False

Question 13

If the standard to produce a given amount of product is 600 direct labor hours at $15 and the actual was 500 hours at $17, the time variance was $1,700 unfavorable.

Accepted Answer

A) True 
 B)False

Question 14

Standard costs are used in companies for a variety of reasons. Which of the following is not one of the benefits for using standard costs?

Accepted Answer

A)  used to indicate where changes in technology and machinery need to be made 
B)  used to estimate cost of inventory 
C)  used to plan direct materials, direct labor, and variable factory overhead 
D)  used to control costs 
A)  used to indicate where changes in technology and machinery need to be made 
B)  used to estimate cost of inventory 
C)  used to plan direct materials, direct labor, and variable factory overhead 
D)  used to control costs

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

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

Accepted Answer

A) True 
 B)False

Question 17

Myers Corporation has the following data related to direct materials costs for November: actual costs for 5,000 pounds of material, $4.50; and standard costs for 4,800 pounds of material at $5.10 per pound.
What is the direct materials price variance?

Accepted Answer

A)  $3,000 favorable 
B)  $3,000 unfavorable 
C)  $2,880 favorable 
D)  $2,880 unfavorable 
A)  $3,000 favorable 
B)  $3,000 unfavorable 
C)  $2,880 favorable 
D)  $2,880 unfavorable

Question 18

Define ideal and currently attainable standards.  Which type of standard should be used and why?

Accepted Answer

Ideal standards are standards that are o

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows:   The amount of the total factory overhead cost variance is

Accepted Answer

A)  $2,000 favorable 
B)  $5,000 unfavorable 
C)  $2,500 unfavorable 
D)  $5,000 favorable 
A)  $2,000 favorable 
B)  $5,000 unfavorable 
C)  $2,500 unfavorable 
D)  $5,000 favorable

It is correct to rely exclusively on past cost data when establishing standards.

Nonfinancial performance output measures are used to improve the input measures.

Titus Company produced 8,900 units of a product that required 3.25 standard hours per unit. The standard fixed overhead cost per unit is $1.20 per hour at 29,000 hours, which is 100% of normal capacity. Determine the fixed factory overhead volume variance.

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows: The amount of the fixed factory overhead volume variance is

The following data is given for the Harry Company: Overhead is applied on standard labor hours. (Round interim calculations to the nearest cent.) The direct labor time variance is

Standard and actual costs for direct labor for the manufacture of 300 units of product were as follows: Actual costs: 125 hours @ $54.00 Standard costs: 131 hours @ $53.00 Determine the direct labor: (a) time variance (b) rate variance (c) total cost variance.

A favorable cost variance occurs when the actual cost is less than the budgeted cost at actual volumes.

Ruby Company produces a chair that requires 5 yards of material per unit. The standard price of one yard of material is $7.60. During the month, 8,500 chairs were manufactured, using 40,000 yards at a cost of $7.50. Determine: (a) price variance (b) quantity variance (c) total cost variance.

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 rate variance was $1,200 favorable.

If the standard to produce a given amount of product is 600 direct labor hours at $15 and the actual was 500 hours at $17, the time variance was $1,700 unfavorable.

Standard costs are used in companies for a variety of reasons. Which of the following is not one of the benefits for using standard costs?

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?

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

Myers Corporation has the following data related to direct materials costs for November: actual costs for 5,000 pounds of material, $4.50; and standard costs for 4,800 pounds of material at $5.10 per pound. What is the direct materials price variance?

Define ideal and currently attainable standards. Which type of standard should be used and why?

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

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows: The amount of the total factory overhead cost variance is

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity Based Costing

Cost Volume Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 8: Evaluating Variances From Standard Costs

It is correct to rely exclusively on past cost data when establishing standards.

Nonfinancial performance output measures are used to improve the input measures.

Titus Company produced 8,900 units of a product that required 3.25 standard hours per unit. The standard fixed overhead cost per unit is $1.20 per hour at 29,000 hours, which is 100% of normal capacity. Determine the fixed factory overhead volume variance.

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows: The amount of the fixed factory overhead volume variance is

The following data is given for the Harry Company: Overhead is applied on standard labor hours. (Round interim calculations to the nearest cent.) The direct labor time variance is

Standard and actual costs for direct labor for the manufacture of 300 units of product were as follows: Actual costs: 125 hours @ $54.00 Standard costs: 131 hours @ $53.00 Determine the direct labor: (a) time variance (b) rate variance (c) total cost variance.

A favorable cost variance occurs when the actual cost is less than the budgeted cost at actual volumes.

Ruby Company produces a chair that requires 5 yards of material per unit. The standard price of one yard of material is $7.60. During the month, 8,500 chairs were manufactured, using 40,000 yards at a cost of $7.50. Determine: (a) price variance (b) quantity variance (c) total cost variance.

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 rate variance was $1,200 favorable.

If the standard to produce a given amount of product is 600 direct labor hours at $15 and the actual was 500 hours at $17, the time variance was $1,700 unfavorable.

Standard costs are used in companies for a variety of reasons. Which of the following is not one of the benefits for using standard costs?

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?

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

Myers Corporation has the following data related to direct materials costs for November: actual costs for 5,000 pounds of material, $4.50; and standard costs for 4,800 pounds of material at $5.10 per pound. What is the direct materials price variance?

Define ideal and currently attainable standards. Which type of standard should be used and why?

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

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows: The amount of the total factory overhead cost variance is

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity Based Costing

Cost Volume Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

Statement of Cash Flows

Financial Statement Analysis

Filters