Question 1

Which of the following is not an advantage of standard costing over normal costing and actual costing?

Accepted Answer

A)  A greater capacity for control. 
B)  Ability to easily distinguish the FIFO and weighted average methods of accounting for beginning inventory costs. 
C)  Computing a unit cost for each equivalent unit cost category is not necessary. 
D)  Providing for readily available unit cost information. 
E)  All of these are advantages of standard costing. 
A)  A greater capacity for control. 
B)  Ability to easily distinguish the FIFO and weighted average methods of accounting for beginning inventory costs. 
C)  Computing a unit cost for each equivalent unit cost category is not necessary. 
D)  Providing for readily available unit cost information. 
E)  All of these are advantages of standard costing.

Question 2

During the month of March, Baker's Express purchased 10,000 pounds of flour at $1 per pound. At the end of March, Baker's Express found that it had an unfavorable materials price variance of $500. The standard cost per pound must be

Accepted Answer

A)  $1.95 
B)  $1.00 
C)  $1.05 
D)  $0.95 
A)  $1.95 
B)  $1.00 
C)  $1.05 
D)  $0.95

Question 3

Budgeted Costs

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 4

Figure 10-1Flying High Company manufactures model airplanes. During the month, it manufactured 10,000 airplanes. Each one used an average of 6.5 direct labor hours and an average of 1.5 sheets of aluminum. It normally manufactures 7,500 airplanes. Materials and labor standards for making the airplanes are:
  
-Refer to Figure 10-1. Compute the standard number of sheets of aluminum allowed for a volume of 10,000 airplanes.

Accepted Answer

A)  15,000 sheets 
B)  10,000 sheets 
C)  7,500 sheets 
D)  11,250 sheets 
A)  15,000 sheets 
B)  10,000 sheets 
C)  7,500 sheets 
D)  11,250 sheets

Question 5

Match each item with the correct statement below.
-This reflects the planned improvement that is set, which will help reduce nonvalue-added costs.

Accepted Answer

A) Quantity Standards 
B) Ideal Standards 
C) Price Standards 
D) Standard Cost Sheet 
E) Upper Control Limit
F)Currently Attainable Standards
G)Kaizen Standards 
A) Quantity Standards 
B) Ideal Standards 
C) Price Standards 
D) Standard Cost Sheet 
E) Upper Control Limit
F)Currently Attainable Standards
G)Kaizen Standards

Question 6

Wiltshire Limited produces woolen blankets and clothing. During Year 1, Wiltshire produced 10,000 items of blankets and clothing using 4,250 bundles of wool at a price of $10 per bundle.
   The difference between the actual quantity of materials and the standard quantity of materials is due to waste. At the end of Year 1, Wiltshire developed a new process that would cut down on the waste by 60%. By the end of Year 2, the company had actually cut down its waste by 50%.

Accepted Answer

The answer of Wiltshire Limited produces woolen blankets and clothing....

Question 7

The labor efficiency variance is calculated by the equation

Accepted Answer

A)  (Standard Hours * Actual Hours) - (Actual Hours * Standard Rate). 
B)  (Actual Rate * Actual Hours) - (Standard Rate * Actual Hours). 
C)  (Actual Hours * Standard Rate) - (Standard Hours * Standard Rate). 
D)  (Standard Hours* Actual Rate) - (Actual Hours * Actual Rate). 
E)  None of these. 
A)  (Standard Hours * Actual Hours) - (Actual Hours * Standard Rate). 
B)  (Actual Rate * Actual Hours) - (Standard Rate * Actual Hours). 
C)  (Actual Hours * Standard Rate) - (Standard Hours * Standard Rate). 
D)  (Standard Hours* Actual Rate) - (Actual Hours * Actual Rate). 
E)  None of these.

Question 8

Standards are set by using historical experiences, ___________________, and input from operating personnel, marketing, and accounting.

Accepted Answer

The answer of Standards are set by using historical experiences,...

Question 9

The amount of input that should be used per unit of output is known as the _______________.

Accepted Answer

quantity d

Question 10

The standard cost sheet provides the input standards needed to compute the total amount of inputs allowed for the actual output, an essential component in computing efficiency variances.

Accepted Answer

A) True 
 B)False

Question 11

In setting price standards for materials and labor,

Accepted Answer

A)  the purchasing department must consider discounts, freight, and quality. 
B)  personnel must consider payroll taxes, fringe benefits, and qualifications. 
C)  it is the joint responsibility of operations, purchasing, personnel, and accounting. 
D)  All of these. 
E)  None of these. 
A)  the purchasing department must consider discounts, freight, and quality. 
B)  personnel must consider payroll taxes, fringe benefits, and qualifications. 
C)  it is the joint responsibility of operations, purchasing, personnel, and accounting. 
D)  All of these. 
E)  None of these.

Question 12

Stratford Company inspects every steam iron it manufactures for safety issues. The standard labor cost is $12 per hour. The maintenance standard at the beginning of the first quarter is 20 minutes per iron. Stratford is implementing a new production process that will aid in reducing any potential electrical defects in the irons. This will decrease the inspection time to 15 minutes per iron. After the end of the first quarter, the new process had reduced the inspection time per iron from 20 minutes to 14 minutes.

Accepted Answer

The answer of Stratford Company inspects every steam iron it...

Question 13

Currently attainable standards offer the most behavioral benefits because higher performance levels are attained through challenging, yet achievable, standards.

Accepted Answer

A) True 
 B)False

Question 14

____________________ is the difference between the actual and standard unit price of an input multiplied by the number of inputs used.

Accepted Answer

Price vari

Question 15

Figure 10-5  
-Refer to Figure 10-5. What is the materials usage variance?

Accepted Answer

A)  $112,500 F 
B)  $112,500 U 
C)  $45,000 F 
D)  $45,000 U 
A)  $112,500 F 
B)  $112,500 U 
C)  $45,000 F 
D)  $45,000 U

Question 16

The materials usage variance is calculated by the equation

Accepted Answer

A)  (Standard Price * Actual Quantity) -(Standard Price * Standard Quantity). 
B)  (Standard Price * Standard Quantity) - (Standard Price * Actual Quantity). 
C)  (Actual Price * Actual Quantity) - (Standard Price * Actual Quantity). 
D)  (Actual Price * Standard Quantity) + (Actual Quantity * Standard Price). 
E)  None of these. 
A)  (Standard Price * Actual Quantity) -(Standard Price * Standard Quantity). 
B)  (Standard Price * Standard Quantity) - (Standard Price * Actual Quantity). 
C)  (Actual Price * Actual Quantity) - (Standard Price * Actual Quantity). 
D)  (Actual Price * Standard Quantity) + (Actual Quantity * Standard Price). 
E)  None of these.

Question 17

Refer to Figure 10-8. What is Perfect's standard hours allowed for a volume of 80,000 blades?

Accepted Answer

A)  210,000 hours 
B)  189,000 hours 
C)  115,000 hours 
D)  125,000 hours 
A)  210,000 hours 
B)  189,000 hours 
C)  115,000 hours 
D)  125,000 hours

Question 18

Which of the following is not true regarding normal costing systems?

Accepted Answer

A)  A normal costing system predetermines overhead costs. 
B)  A normal costing system assigns direct materials and direct labor to products using a predetermined rate. 
C)  In a normal costing system overhead is assigned using a budgeted rate and actual activity. 
D)  A normal costing system has less capacity for control than a standard costing system. 
E)  All of these statements are true. 
A)  A normal costing system predetermines overhead costs. 
B)  A normal costing system assigns direct materials and direct labor to products using a predetermined rate. 
C)  In a normal costing system overhead is assigned using a budgeted rate and actual activity. 
D)  A normal costing system has less capacity for control than a standard costing system. 
E)  All of these statements are true.

Question 19

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. The actual cost was $7 per pound. The actual pounds of steel that Cisco purchased were 19,500 pounds. All materials purchased were used. Calculate Cisco's materials usage variance.

Accepted Answer

A)  $10,500 U 
B)  $12,000 F 
C)  $12,000 U 
D)  $10,500 F 
A)  $10,500 U 
B)  $12,000 F 
C)  $12,000 U 
D)  $10,500 F

Question 20

Kaizen costing provides fixed standards which reflect continuous improvement efforts.

Accepted Answer

A) True 
 B)False

Which of the following is not an advantage of standard costing over normal costing and actual costing?

During the month of March, Baker's Express purchased 10,000 pounds of flour at $1 per pound. At the end of March, Baker's Express found that it had an unfavorable materials price variance of $500. The standard cost per pound must be

Budgeted Costs

Match each item with the correct statement below. -This reflects the planned improvement that is set, which will help reduce nonvalue-added costs.

The labor efficiency variance is calculated by the equation

Standards are set by using historical experiences, ___________________, and input from operating personnel, marketing, and accounting.

The amount of input that should be used per unit of output is known as the _______________.

The standard cost sheet provides the input standards needed to compute the total amount of inputs allowed for the actual output, an essential component in computing efficiency variances.

In setting price standards for materials and labor,

Currently attainable standards offer the most behavioral benefits because higher performance levels are attained through challenging, yet achievable, standards.

____________________ is the difference between the actual and standard unit price of an input multiplied by the number of inputs used.

Figure 10-5 -Refer to Figure 10-5. What is the materials usage variance?

The materials usage variance is calculated by the equation

Refer to Figure 10-8. What is Perfect's standard hours allowed for a volume of 80,000 blades?

Which of the following is not true regarding normal costing systems?

Kaizen costing provides fixed standards which reflect continuous improvement efforts.

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

Exam 10: Standard Costing: a Managerial Control Tool

Which of the following is not an advantage of standard costing over normal costing and actual costing?

During the month of March, Baker's Express purchased 10,000 pounds of flour at $1 per pound. At the end of March, Baker's Express found that it had an unfavorable materials price variance of $500. The standard cost per pound must be

Budgeted Costs

Match each item with the correct statement below. -This reflects the planned improvement that is set, which will help reduce nonvalue-added costs.

The labor efficiency variance is calculated by the equation

Standards are set by using historical experiences, ___________________, and input from operating personnel, marketing, and accounting.

The amount of input that should be used per unit of output is known as the _______________.

The standard cost sheet provides the input standards needed to compute the total amount of inputs allowed for the actual output, an essential component in computing efficiency variances.

In setting price standards for materials and labor,

Currently attainable standards offer the most behavioral benefits because higher performance levels are attained through challenging, yet achievable, standards.

____________________ is the difference between the actual and standard unit price of an input multiplied by the number of inputs used.

Figure 10-5 -Refer to Figure 10-5. What is the materials usage variance?

The materials usage variance is calculated by the equation

Refer to Figure 10-8. What is Perfect's standard hours allowed for a volume of 80,000 blades?

Which of the following is not true regarding normal costing systems?

Kaizen costing provides fixed standards which reflect continuous improvement efforts.

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