Question 1

Match each item with the correct statement below.
-These reflect the amount that should be paid for the quantity of input to be used.

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 2

Match each item with the correct statement below.
-These reflect the amount of input that should be used per unit of output.

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 3

Which of the following is not true concerning direct materials variances?

Accepted Answer

A)  The sum of the price and usage variances will add up to the total materials variance only if the materials purchased is equal to the materials used. 
B)  The materials price variance uses the actual quantity of materials purchased rather than the actual quantity of materials used. 
C)  The materials price variance always uses the actual quantity of materials used rather than the actual quantity of materials purchased. 
D)  The materials usage variance uses the actual quantity of materials used. 
E)  Separate materials variances can be computed for each type of material used. 
A)  The sum of the price and usage variances will add up to the total materials variance only if the materials purchased is equal to the materials used. 
B)  The materials price variance uses the actual quantity of materials purchased rather than the actual quantity of materials used. 
C)  The materials price variance always uses the actual quantity of materials used rather than the actual quantity of materials purchased. 
D)  The materials usage variance uses the actual quantity of materials used. 
E)  Separate materials variances can be computed for each type of material used.

Question 4

The standard cost per unit of output for a particular input is calculated by multiplying the standard input price by the standard input allowed per unit of output produced.

Accepted Answer

A) True 
 B)False

Question 5

The ______________________ can be used to compute the total amount of inputs allowed for the actual output.

Accepted Answer

unit quant

Question 6

Ideal standards

Accepted Answer

A)  do not allow for machine breakdowns, slack, or lack of skill (even momentarily). 
B)  demand maximum efficiency. 
C)  can be achieved only if everything operates perfectly. 
D)  All of these. 
E)  None of these. 
A)  do not allow for machine breakdowns, slack, or lack of skill (even momentarily). 
B)  demand maximum efficiency. 
C)  can be achieved only if everything operates perfectly. 
D)  All of these. 
E)  None of these.

Question 7

Labor Rate 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 8

Overland Automotive Company is considering on manufacturing a new brand of car. Given the current product and process designs, the cost data are:
  The company expects the selling price to be $20,000 and has set a target profit of $5,000.
A supplier told Overland that it could purchase a couple of similar components under a different brand name at a lower price. This would result in cost savings of $2,000 per car. Furthermore, the company found that it could redesign its manufacturing process to cut down on both inspection labor and worker labor, which would result in cost savings of $1,000 per car.

Accepted Answer

The answer of Overland Automotive Company is considering on manufacturing...

Question 9

Max Company has developed the following standards for one of its products.   The following activity occurred during the month of October:
  The company records materials price variances at the time of purchase. The direct materials price variance is

Accepted Answer

A)  $50,000 F. 
B)  $50,000 U. 
C)  $10,000 U. 
D)  $10,000 F. 
A)  $50,000 F. 
B)  $50,000 U. 
C)  $10,000 U. 
D)  $10,000 F.

Question 10

Match each item with the correct statement below.
-Standards that are rigorous but achievable and reflect reasonable efficiency.

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 11

Extreme Builders constructs houses. The standard labor rate is $25 per hour and the standard number of hours is 15,000 hours per home. During the year, it constructed 12 homes using 18,000 labor hours per home and a rate of $28 per hour.
-Refer to Figure 10-6. Calculate the labor efficiency variance.

Accepted Answer

A)  $1,008,000 F 
B)  $900,000 U 
C)  $1,008,000 U 
D)  $900,000 F 
A)  $1,008,000 F 
B)  $900,000 U 
C)  $1,008,000 U 
D)  $900,000 F

Question 12

___________________ can provide an initial guideline for setting standards, but should be used with caution because they can perpetuate existing inefficiencies.

Accepted Answer

Historical

Question 13

Eider Company has the following information:

Accepted Answer

@#IMG-DLM& Since the materials price var

Question 14

An unfavorable price variance occurs whenever the actual prices are greater than the standard prices.

Accepted Answer

A) True 
 B)False

Question 15

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 hours allowed for a volume of 10,000 airplanes.

Accepted Answer

A)  60,000 hours 
B)  420,000 hours 
C)  70,000 hours 
D)  65,000 hours 
A)  60,000 hours 
B)  420,000 hours 
C)  70,000 hours 
D)  65,000 hours

Question 16

During January, 7,000 direct labor hours were worked at a standard cost of $20 per hour. If the direct labor rate variance for January was $17,500 favorable, the actual cost per direct labor hour must be

Accepted Answer

A)  $17.50. 
B)  $20.00. 
C)  $22.50. 
D)  $25.00. 
A)  $17.50. 
B)  $20.00. 
C)  $22.50. 
D)  $25.00.

Question 17

Which of the following is true regarding standard cost systems in manufacturing environments that emphasize continuous improvement and just-in-time manufacturing and purchasing?

Accepted Answer

A)  The standard cost system enhances the operational control. 
B)  The materials price variance may encourage the purchasing department to buy in smaller quantities to reduce inventories. 
C)  Variances can be computed and presented in reports to higher-level managers. 
D)  The operational level will benefit from the detailed computation of variances. 
E)  None of these. 
A)  The standard cost system enhances the operational control. 
B)  The materials price variance may encourage the purchasing department to buy in smaller quantities to reduce inventories. 
C)  Variances can be computed and presented in reports to higher-level managers. 
D)  The operational level will benefit from the detailed computation of variances. 
E)  None of these.

Question 18

Figure 10-5  
-Refer to Figure 10-5. What is Seaside's total labor variance?

Accepted Answer

A)  $20,000 F 
B)  $20,000 U 
C)  $112,500 F 
D)  $120,000 U 
A)  $20,000 F 
B)  $20,000 U 
C)  $112,500 F 
D)  $120,000 U

Question 19

Standard cost systems can enhance operational control through the use of

Accepted Answer

A)  efficiency variances which indicate the need for corrective action. 
B)  price variances which indicate the need for better spending control. 
C)  standard costs which indicate the desired cost of a unit of input. 
D)  actual costs which indicate the price received for units sold. 
E)  All of these. 
A)  efficiency variances which indicate the need for corrective action. 
B)  price variances which indicate the need for better spending control. 
C)  standard costs which indicate the desired cost of a unit of input. 
D)  actual costs which indicate the price received for units sold. 
E)  All of these.

Question 20

One reason for adopting a standard cost system is to make product costing easier.

Accepted Answer

A) True 
 B)False

Match each item with the correct statement below. -These reflect the amount that should be paid for the quantity of input to be used.

Match each item with the correct statement below. -These reflect the amount of input that should be used per unit of output.

Which of the following is not true concerning direct materials variances?

The standard cost per unit of output for a particular input is calculated by multiplying the standard input price by the standard input allowed per unit of output produced.

The ______________________ can be used to compute the total amount of inputs allowed for the actual output.

Ideal standards

Labor Rate Variance

Max Company has developed the following standards for one of its products. The following activity occurred during the month of October: The company records materials price variances at the time of purchase. The direct materials price variance is

Match each item with the correct statement below. -Standards that are rigorous but achievable and reflect reasonable efficiency.

___________________ can provide an initial guideline for setting standards, but should be used with caution because they can perpetuate existing inefficiencies.

Eider Company has the following information:

An unfavorable price variance occurs whenever the actual prices are greater than the standard prices.

During January, 7,000 direct labor hours were worked at a standard cost of $20 per hour. If the direct labor rate variance for January was $17,500 favorable, the actual cost per direct labor hour must be

Which of the following is true regarding standard cost systems in manufacturing environments that emphasize continuous improvement and just-in-time manufacturing and purchasing?

Figure 10-5 -Refer to Figure 10-5. What is Seaside's total labor variance?

Standard cost systems can enhance operational control through the use of

One reason for adopting a standard cost system is to make product costing easier.

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

Match each item with the correct statement below. -These reflect the amount that should be paid for the quantity of input to be used.

Match each item with the correct statement below. -These reflect the amount of input that should be used per unit of output.

Which of the following is not true concerning direct materials variances?

The standard cost per unit of output for a particular input is calculated by multiplying the standard input price by the standard input allowed per unit of output produced.

The ______________________ can be used to compute the total amount of inputs allowed for the actual output.

Ideal standards

Labor Rate Variance

Max Company has developed the following standards for one of its products. The following activity occurred during the month of October: The company records materials price variances at the time of purchase. The direct materials price variance is

Match each item with the correct statement below. -Standards that are rigorous but achievable and reflect reasonable efficiency.

___________________ can provide an initial guideline for setting standards, but should be used with caution because they can perpetuate existing inefficiencies.

Eider Company has the following information:

An unfavorable price variance occurs whenever the actual prices are greater than the standard prices.

During January, 7,000 direct labor hours were worked at a standard cost of $20 per hour. If the direct labor rate variance for January was $17,500 favorable, the actual cost per direct labor hour must be

Which of the following is true regarding standard cost systems in manufacturing environments that emphasize continuous improvement and just-in-time manufacturing and purchasing?

Figure 10-5 -Refer to Figure 10-5. What is Seaside's total labor variance?

Standard cost systems can enhance operational control through the use of

One reason for adopting a standard cost system is to make product costing easier.

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