Question 1

The general model for computing a price variance is:

Accepted Answer

A) (actual price - standard price)x standard quantity of inputs. 
B) (actual price - standard price)x actual quantity of inputs. 
C) (actual quantity of inputs - standard quantity of units)x standard price. 
D) (actual quantity - standard quantity)x actual price. 
A) (actual price - standard price)x standard quantity of inputs. 
B) (actual price - standard price)x actual quantity of inputs. 
C) (actual quantity of inputs - standard quantity of units)x standard price. 
D) (actual quantity - standard quantity)x actual price.

Question 2

An increase in the activity level will result in:

Accepted Answer

A) an increase in fixed unit cost. 
B) an increase in unit variable cost. 
C) a decrease in unit variable cost. 
D) decrease in fixed unit cost. 
A) an increase in fixed unit cost. 
B) an increase in unit variable cost. 
C) a decrease in unit variable cost. 
D) decrease in fixed unit cost.

Question 3

Better Blankets, Inc. makes a SnuggieBlank using flannel material and trim binding. They have instituted a successful JIT system and thus no longer have to stock inventory prior to their production need. The Standard Cost Card for The SnuggieBlank model is shown. 
STANDARD COST CARD
 
The company reported the following results concerning January:
 
-
The labor efficiency variance in January is:

Accepted Answer

A)  $3,050 favorable. 
B)  $1,600 unfavorable. 
C)  $1,600 favorable. 
D)  $3,050 unfavorable. 
A)  $3,050 favorable. 
B)  $1,600 unfavorable. 
C)  $1,600 favorable. 
D)  $3,050 unfavorable.

Question 4

The labor time (efficiency)variance and the labor------------ variance together make up the total labor variance.

Accepted Answer

The answer of The labor time (efficiency)variance and the labor------------...

Question 5

If the predetermined overhead application rate is a percentage of labor cost, then a favorable labor time variance will be accompanied by a favorable manufacturing overhead variance.

Accepted Answer

A) True 
 B)False

Question 6

To measure manufacturing efficiency, it is necessary to first identify costs behavior and separate cost into their behavioral components.

Accepted Answer

A) True 
 B)False

Question 7

Costs that tend to change in total directly with the volume of manufacturing activity are called------------costs.

Accepted Answer

The answer of Costs that tend to change in total...

Question 8

The labor standard for a product was 5.5 hours at a wage rate of $9 per hour. The firm produced 1,020 units of the item. Labor costs totaled $50,414 and 5,540 hours of labor were used. An analysis of labor costs would indicate

Accepted Answer

A) a $554 favorable labor rate variance. 
B) a $630 unfavorable labor time variance. 
C) a $554 unfavorable labor rate variance. 
D) a $630 favorable labor time variance. 
A) a $554 favorable labor rate variance. 
B) a $630 unfavorable labor time variance. 
C) a $554 unfavorable labor rate variance. 
D) a $630 favorable labor time variance.

Question 9

The production manager is accountable for all material quantity variances as defective product and scrap is a result of inexperienced workers.

Accepted Answer

A) True 
 B)False

Question 10

The difference between the total standard cost and the total actual cost is the

Accepted Answer

A) cost variance. 
B) labor rate variance. 
C) materials price variance. 
D) standard cost card amount. 
A) cost variance. 
B) labor rate variance. 
C) materials price variance. 
D) standard cost card amount.

Question 11

Prepare a budget for manufacturing costs for Nacelle Manufacturing for the month of July 2019 from the following information. Direct materials are estimated to be $480,000 for the year and direct labor is estimated to be $96,000. The direct labor per hour average is $13 and the budgeted level of activity for the month is 1,200 hours.

Accepted Answer

Nacelle Manufacturin

Question 12

The range of activity at which the factory is likely to operate is referred to as the--------- range of activity.

Accepted Answer

The answer of The range of activity at which the...

Question 13

Variance analysis is a tool used by management to pinpoint inefficiencies in the manufacturing process.

Accepted Answer

A) True 
 B)False

Question 14

WinterRec uses a standard cost system. The following data is available for November:
 
The actual direct labor rate for November is:

Accepted Answer

A) $9.25 per hour. 
B) $9.63 per hour. 
C) $9.40 per hour. 
D) $9.00 per hour. 
A) $9.25 per hour. 
B) $9.63 per hour. 
C) $9.40 per hour. 
D) $9.00 per hour.

Question 15

Better Blankets, Inc. makes a SnuggieBlank using flannel material and trim binding. They have instituted a successful JIT system and thus no longer have to stock inventory prior to their production need. The Standard Cost Card for The SnuggieBlank model is shown. 
STANDARD COST CARD
 
The company reported the following results concerning January:
 
-
The variable overhead efficiency variance in January is:

Accepted Answer

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

Question 16

The standard costs for a unit of product are shown below.
 $$\begin{array} { l l r } 
\text { Materials: } & 4 \text { pounds at } \$ 1.80 \text { per pound } & \$ 7.20 \
\text { Labor: } & 80 \text { hours at } \$ 13.00 \text { per hour } & 10.40 \
\text { Overhead: } & 65 \% \text { of direct labor } & 6.76
\end{array}$$ 
During July, Job N-5 for 200 units was completed. The actual costs of the job are shown below.
 $$\begin{array} { l l r } 
\text { Materials: } & 823 \text { pourds at } \$ 1.86 \text { per pound } & \$ 1,530.78 \
\text { Lubor: } & 157 \text { hours at } \$ 13.13 \text { per hour } & 2,061.41 \
\text { Overhead Applied: } & 65 \% \text { of direct labor } & 1,339.92
\end{array}$$ 
1. What is the total cost variance between actual cost and standard cost?
2. What is the total material variance?
3. What is the material quantity variance?
4. What is the material price variance?

Accepted Answer

1.$60.11 unfavorable

Question 17

The controllable overhead variance compares the actual overhead costs incurred with what the costs should have been for the units produced.

Accepted Answer

A) True 
 B)False

Question 18

The materials price variance for an item is the difference between its actual price and its standard cost

Accepted Answer

A) divided by the actual quantity. 
B) multiplied by the standard quantity allowed. 
C) multiplied by the difference between the actual quantity and the standard quantity. 
D) multiplied by the actual quantity used. 
A) divided by the actual quantity. 
B) multiplied by the standard quantity allowed. 
C) multiplied by the difference between the actual quantity and the standard quantity. 
D) multiplied by the actual quantity used.

Question 19

Semi-variable costs vary in direct proportion to the volume of activity or production.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following would NOT be considered a fixed manufacturing cost?

Accepted Answer

A) depreciation using straight-line. 
B) insurance. 
C) utilities. 
D) taxes. 
A) depreciation using straight-line. 
B) insurance. 
C) utilities. 
D) taxes.

Exam 29: Controlling Manufacturing Costs: Standard Costs

The general model for computing a price variance is:

An increase in the activity level will result in:

The labor time (efficiency)variance and the labor------------ variance together make up the total labor variance.

If the predetermined overhead application rate is a percentage of labor cost, then a favorable labor time variance will be accompanied by a favorable manufacturing overhead variance.

To measure manufacturing efficiency, it is necessary to first identify costs behavior and separate cost into their behavioral components.

Costs that tend to change in total directly with the volume of manufacturing activity are called------------costs.

The labor standard for a product was 5.5 hours at a wage rate of $9 per hour. The firm produced 1,020 units of the item. Labor costs totaled $50,414 and 5,540 hours of labor were used. An analysis of labor costs would indicate

The production manager is accountable for all material quantity variances as defective product and scrap is a result of inexperienced workers.

The difference between the total standard cost and the total actual cost is the

The range of activity at which the factory is likely to operate is referred to as the--------- range of activity.

Variance analysis is a tool used by management to pinpoint inefficiencies in the manufacturing process.

WinterRec uses a standard cost system. The following data is available for November: The actual direct labor rate for November is:

The controllable overhead variance compares the actual overhead costs incurred with what the costs should have been for the units produced.

The materials price variance for an item is the difference between its actual price and its standard cost

Semi-variable costs vary in direct proportion to the volume of activity or production.

Which of the following would NOT be considered a fixed manufacturing cost?

Accounting: The Language of Business

Analyzing Business Transactions

Analyzing Business Transactions Using T Accounts

The General Journal and the General Ledger

Adjustments and the Worksheet

Closing Entries and Teh Postclosing Trial Balance

Accounting for Sales and Accounts Receivable

Accounting for Purchases and Accounts Payable

Cash Receipts, Cash Payments, and Banking Procedures

Payroll Computations, Records, and Payment

Payroll Taxes, Deposits, and Reports

Accruals, Deferrals, and the Worksheet

Financial Statements and Closing Procedures

Accounting Principles and Reporting Standards

Accounts Receivable and Uncollectible Accounts

Notes Payable and Notes Receivable

Merchandise Inventory

Property, Plant, and Equipment

Accounting for Partnerships

Corporations: Formation and Capital Stock Transactions

Corporate Earnings and Capital Transactions

Long-Term Bonds

Financial Statement Analysis

The Statement of Cash Flows

Departmentalized Profit and Cost Centers

Accounting for Manufacturing Activities

Job Order Cost Accounting

Process Cost Accounting

Cost-Revenue Analysis for Decision Making

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