Question 1

The production data needed to calculate the standard unit cost as well as the underlying details for the standard cost per unit are provided in

Accepted Answer

A)  the standard cost sheet. 
B)  the standard production budget. 
C)  the balance sheet. 
D)  the standard work-in-process account. 
E)  None of these. 
A)  the standard cost sheet. 
B)  the standard production budget. 
C)  the balance sheet. 
D)  the standard work-in-process account. 
E)  None of these. A

Question 2

During August, 10,000 units were produced. The standard quantity of material allowed per unit was 10 pounds at a standard cost of $3 per pound. If there was an unfavorable usage variance of $18,750 for August, the actual quantity of materials used must be

Accepted Answer

A)  106,250 pounds. 
B)  93,750 pounds. 
C)  31,875 pounds. 
D)  23,438 pounds. 
A)  106,250 pounds. 
B)  93,750 pounds. 
C)  31,875 pounds. 
D)  23,438 pounds. A

Question 3

The ____________________ is the difference between the actual cost of the input and its planned cost.

Accepted Answer

total budget variance

Question 4

Figure 10-2Highland Company's standard cost is $250,000. The allowable deviation is $\pm$10%. Its actual costs for six months are
  
-Refer to Figure 10-2. The variance that is higher than the upper control limit is

Accepted Answer

A)  $220,000 
B)  $280,000 
C)  $265,000 
D)  $235,000 
A)  $220,000 
B)  $280,000 
C)  $265,000 
D)  $235,000

Question 5

________________ demands maximum efficiency and can be achieved only if everything operates perfectly.

Accepted Answer

The answer of ________________ demands maximum efficiency and can be...

Question 6

Managers develop quantity standards when they decide what amount of input should be used per unit of output.

Accepted Answer

A) True 
 B)False

Question 7

During April, Rain Gear Unlimited produced 5,500 umbrellas from nylon that costs $0.45 per yard, which is $0.05 cheaper than the standard cost. It also used 3,000 direct labor hours at a rate of $6.50. Its direct materials standard is 1 yard per umbrella. Its direct labor standard is 0.5 hour per umbrella.
Its materials usage variance was a favorable $500 and its labor rate variance was a favorable $900.

Accepted Answer

The answer of During April, Rain Gear Unlimited produced 5,500...

Question 8

Figure 10-3Bortello Corporation produces high-quality leather boots. The company has a standard cost system and has set the following standards for materials and labor:
   During the year Bortello produced 125 boots. Actual leather purchased was 1,700 strips, at $16 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 1,500 hours at $15 per hour.
-Refer to Figure 10-3. Compute the materials price variance and the materials usage variance, respectively.

Accepted Answer

A)  $9,000 F and $1,200 U 
B)  $9,300 U and $1,500 F 
C)  $6,800 F and $4,000 U 
D)  $6,800 U and $4,000 F 
A)  $9,000 F and $1,200 U 
B)  $9,300 U and $1,500 F 
C)  $6,800 F and $4,000 U 
D)  $6,800 U and $4,000 F

Question 9

Which of the following is true regarding variances?

Accepted Answer

A)  Unfavorable variances occur whenever actual prices or actual usage of inputs are greater than standard prices or standard usage. 
B)  Favorable variances occur whenever actual prices or actual usage of inputs are greater than standard prices or standard usage. 
C)  Unfavorable variances are always credits. 
D)  Favorable variances are always debits. 
E)  None of these. 
A)  Unfavorable variances occur whenever actual prices or actual usage of inputs are greater than standard prices or standard usage. 
B)  Favorable variances occur whenever actual prices or actual usage of inputs are greater than standard prices or standard usage. 
C)  Unfavorable variances are always credits. 
D)  Favorable variances are always debits. 
E)  None of these.

Question 10

Anderson Company has the following information concerning its direct labor:
   A. Determine the labor rate variance and whether it is favorable or unfavorable.
B. Determine the labor efficiency variance and whether it is favorable or unfavorable.
C. Provide the journal entry for the labor variances.

Accepted Answer

The answer of Anderson Company has the following information concerning...

Question 11

The ___________________ measures the difference between the labor hours that were actually used and the labor hours that should have been used.

Accepted Answer

labor effi

Question 12

In setting standards, historical experience should be used with caution because it can perpetuate operating inefficiencies.

Accepted Answer

A) True 
 B)False

Question 13

The total budget variance is the difference between the actual cost of the input and its planned cost.

Accepted Answer

A) True 
 B)False

Question 14

It took James 1,400,000 yards at $2.50 per yard to make the 250,000 t-shirts.
-Refer to Figure 10-9. What is the entry to record the purchase of materials?

Accepted Answer

The answer of   It took James 1,400,000 yards...

Question 15

During June, Cisco Company produced 12,000 chainsaw blades. The standard quantity of material allowed per unit was 1.5 pounds of steel per blade at a standard cost of $8 per pound. Cisco determined that it had a favorable materials usage variance of $1,000 for June. Calculate the actual quantity of materials Cisco used.

Accepted Answer

A)  17,875 pounds 
B)  12,125 pounds 
C)  11,875 pounds 
D)  18,125 pounds 
A)  17,875 pounds 
B)  12,125 pounds 
C)  11,875 pounds 
D)  18,125 pounds

Question 16

All of the following are true except

Accepted Answer

A)  A favorable labor efficiency variance could result from using higher quality materials that result in fewer inspections. 
B)  A favorable labor rate variance could result from lower wage workers quitting. 
C)  A favorable materials price variance could result from purchasing identical materials from another supplier at a lower price. 
D)  An unfavorable materials usage variance could result from not efficiently utilizing raw materials, thus causing waste. 
E)  An unfavorable labor efficiency variance can be caused by machine downtime, and poor quality materials. 
A)  A favorable labor efficiency variance could result from using higher quality materials that result in fewer inspections. 
B)  A favorable labor rate variance could result from lower wage workers quitting. 
C)  A favorable materials price variance could result from purchasing identical materials from another supplier at a lower price. 
D)  An unfavorable materials usage variance could result from not efficiently utilizing raw materials, thus causing waste. 
E)  An unfavorable labor efficiency variance can be caused by machine downtime, and poor quality materials.

Question 17

The ____________________ measures the difference between the actual costs of materials and their budgeted costs for actual level of activity.

Accepted Answer

total vari

Question 18

Materials Price Variance

Accepted Answer

A) Actual Quantity * Actual Price 
B) (Actual Hours * Actual Rate) - (Standard Hours * Standard Rate) 
C) (Actual Quantity * Actual Price) - (Standard Quantity * Standard Price) 
D) (Actual Hours - Standard Hours) * Standard Rate 
E) (Actual Price - Standard Price) * Actual Quantity
F)Standard Quantity* Standard Price
G)(Actual Rate - Standard Rate) * Actual Hours
H)(Actual Quantity - Standard Quantity) * Standard Price 
A) Actual Quantity * Actual Price 
B) (Actual Hours * Actual Rate) - (Standard Hours * Standard Rate) 
C) (Actual Quantity * Actual Price) - (Standard Quantity * Standard Price) 
D) (Actual Hours - Standard Hours) * Standard Rate 
E) (Actual Price - Standard Price) * Actual Quantity
F)Standard Quantity* Standard Price
G)(Actual Rate - Standard Rate) * Actual Hours
H)(Actual Quantity - Standard Quantity) * Standard Price

Question 19

Standard hours allowed are computed using the equation

Accepted Answer

A)  unit labor standard * actual output. 
B)  unit labor standard *standard output. 
C)  unit labor standard * actual input. 
D)  unit labor standard *standard input. 
E)  not shown here. 
A)  unit labor standard * actual output. 
B)  unit labor standard *standard output. 
C)  unit labor standard * actual input. 
D)  unit labor standard *standard input. 
E)  not shown here.

Question 20

The standard unit cost is developed before the standard costs for direct materials, direct labor, and overhead can be set.

Accepted Answer

A) True 
 B)False

The production data needed to calculate the standard unit cost as well as the underlying details for the standard cost per unit are provided in

During August, 10,000 units were produced. The standard quantity of material allowed per unit was 10 pounds at a standard cost of $3 per pound. If there was an unfavorable usage variance of $18,750 for August, the actual quantity of materials used must be

The ____________________ is the difference between the actual cost of the input and its planned cost.

________________ demands maximum efficiency and can be achieved only if everything operates perfectly.

Managers develop quantity standards when they decide what amount of input should be used per unit of output.

Which of the following is true regarding variances?

Anderson Company has the following information concerning its direct labor: A. Determine the labor rate variance and whether it is favorable or unfavorable. B. Determine the labor efficiency variance and whether it is favorable or unfavorable. C. Provide the journal entry for the labor variances.

The ___________________ measures the difference between the labor hours that were actually used and the labor hours that should have been used.

In setting standards, historical experience should be used with caution because it can perpetuate operating inefficiencies.

The total budget variance is the difference between the actual cost of the input and its planned cost.

It took James 1,400,000 yards at $2.50 per yard to make the 250,000 t-shirts. -Refer to Figure 10-9. What is the entry to record the purchase of materials?

All of the following are true except

The ____________________ measures the difference between the actual costs of materials and their budgeted costs for actual level of activity.

Materials Price Variance

Standard hours allowed are computed using the equation

The standard unit cost is developed before the standard costs for direct materials, direct labor, and overhead can be set.

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Profit Planning

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

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Exam 10: Standard Costing: a Managerial Control Tool

The production data needed to calculate the standard unit cost as well as the underlying details for the standard cost per unit are provided in

During August, 10,000 units were produced. The standard quantity of material allowed per unit was 10 pounds at a standard cost of $3 per pound. If there was an unfavorable usage variance of $18,750 for August, the actual quantity of materials used must be

The ____________________ is the difference between the actual cost of the input and its planned cost.

Figure 10-2Highland Company's standard cost is $250,000. The allowable deviation is ±\pm± 10%. Its actual costs for six months are -Refer to Figure 10-2. The variance that is higher than the upper control limit is

________________ demands maximum efficiency and can be achieved only if everything operates perfectly.

Managers develop quantity standards when they decide what amount of input should be used per unit of output.

Which of the following is true regarding variances?

Anderson Company has the following information concerning its direct labor: A. Determine the labor rate variance and whether it is favorable or unfavorable. B. Determine the labor efficiency variance and whether it is favorable or unfavorable. C. Provide the journal entry for the labor variances.

The ___________________ measures the difference between the labor hours that were actually used and the labor hours that should have been used.

In setting standards, historical experience should be used with caution because it can perpetuate operating inefficiencies.

The total budget variance is the difference between the actual cost of the input and its planned cost.

It took James 1,400,000 yards at $2.50 per yard to make the 250,000 t-shirts. -Refer to Figure 10-9. What is the entry to record the purchase of materials?

All of the following are true except

The ____________________ measures the difference between the actual costs of materials and their budgeted costs for actual level of activity.

Materials Price Variance

Standard hours allowed are computed using the equation

The standard unit cost is developed before the standard costs for direct materials, direct labor, and overhead can be set.

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Profit Planning

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters