Question 1

The usage variance is the difference between the actual and standard quantity of inputs

Accepted Answer

A)  multiplied by the standard unit price of the input. 
B)  budgeted multiplied by the standard unit price of the input. 
C)  multiplied by the actual unit price of the input. 
D)  purchased multiplied by the actual unit price of the input. 
E)  None of these. 
A)  multiplied by the standard unit price of the input. 
B)  budgeted multiplied by the standard unit price of the input. 
C)  multiplied by the actual unit price of the input. 
D)  purchased multiplied by the actual unit price of the input. 
E)  None of these.

Question 2

Gardener's Market manufactures hedgers. During the year, it manufactured 5,000 hedgers, using 4.2 hours of direct labor per hedger at a rate of $8. The materials and labor standards for manufacturing the hedgers are:
   Gardener's Market actually purchased and used 53,000 units of direct materials at a price of $2.25 per unit.
Required:

Accepted Answer

The answer of Gardener's Market manufactures hedgers. During the year,...

Question 3

Which of the following is true regarding direct labor variances?

Accepted Answer

A)  The labor efficiency variance measures the difference between what was paid to direct laborers and what should have been paid. 
B)  The labor rate and labor efficiency variances will always add up to the total labor variance. 
C)  The labor rate variance measures the difference between the labor hours that were actually used and the labor hours that should have been used. 
D)  The labor rate variance measures the difference between the labor hours that were originally budgeted and the labor hours that should have been used. 
E)  The labor rate variance measures the difference between the labor hours that were actually used and the labor hours that were originally budgeted. 
A)  The labor efficiency variance measures the difference between what was paid to direct laborers and what should have been paid. 
B)  The labor rate and labor efficiency variances will always add up to the total labor variance. 
C)  The labor rate variance measures the difference between the labor hours that were actually used and the labor hours that should have been used. 
D)  The labor rate variance measures the difference between the labor hours that were originally budgeted and the labor hours that should have been used. 
E)  The labor rate variance measures the difference between the labor hours that were actually used and the labor hours that were originally budgeted.

Question 4

The standard cost system differs from the actual cost system in the assignment of

Accepted Answer

A)  direct materials. 
B)  direct labor. 
C)  overhead. 
D)  all of the manufacturing inputs. 
E)  none of the manufacturing inputs. 
A)  direct materials. 
B)  direct labor. 
C)  overhead. 
D)  all of the manufacturing inputs. 
E)  none of the manufacturing inputs.

Question 5

Which of the following is not true regarding the use of materials variance information?

Accepted Answer

A)  The purchasing agent has the responsibility for controlling the materials price variance. 
B)  The production manager is generally responsible for materials usage. 
C)  The production manager is concerned with minimizing scrap, waste, and rework. 
D)  The purchasing department is responsible for acquiring quality materials. 
E)  All of these are true. 
A)  The purchasing agent has the responsibility for controlling the materials price variance. 
B)  The production manager is generally responsible for materials usage. 
C)  The production manager is concerned with minimizing scrap, waste, and rework. 
D)  The purchasing department is responsible for acquiring quality materials. 
E)  All of these are true.

Question 6

Price standards are based on

Accepted Answer

A)  the amount of input that should be used per unit of output. 
B)  the amount that should be paid for the total quantity of input to be used. 
C)  the amount that should be paid per unit of output. 
D)  the amount that should be paid per unit of input purchased. 
E)  None of these. 
A)  the amount of input that should be used per unit of output. 
B)  the amount that should be paid for the total quantity of input to be used. 
C)  the amount that should be paid per unit of output. 
D)  the amount that should be paid per unit of input purchased. 
E)  None of these.

Question 7

Eastminster Company has the following information:

Accepted Answer

The answer of Eastminster Company has the following information:
 ...

Question 8

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 upper and lower control limits are, respectively,

Accepted Answer

A)  $250,000 and $225,000 
B)  $305,000 and $195,000 
C)  $275,000 and $250,000 
D)  $275,000 and $225,000 
A)  $250,000 and $225,000 
B)  $305,000 and $195,000 
C)  $275,000 and $250,000 
D)  $275,000 and $225,000

Question 9

McDaniel Company manufactures 100-pound bags of fertilizer that have the following unit standard costs for direct materials and direct labor:
   The following activities were recorded for October:
   There were no beginning or ending work-in-process inventories.
Required:

Accepted Answer

The answer of McDaniel Company manufactures 100-pound bags of fertilizer...

Question 10

The Cat's Meow manufactures gourmet cat food. During the month, it manufactured 5,000 cans of tuna, using 0.10 hour of direct labor per can at a rate of $8.00 per hour. The materials and labor standards for manufacturing the cans of tuna are as follows:
   The company actually used 4,900 pounds of tuna at a price of $0.65 per pound. It also purchased 5,000 cans at a price of $0.45 per can.

Accepted Answer

The answer of The Cat's Meow manufactures gourmet cat food....

Question 11

An acceptable range is established in order to determine if whether variances are significant. The acceptable range is the standard, plus or minus an allowable deviation.

Accepted Answer

A) True 
 B)False

Question 12

PURE Inc. produces flavored waters, sold in gallons. Recently the company adopted the following materials standard for one gallon of its raspberry flavored water:

Accepted Answer

The answer of PURE Inc. produces flavored waters, sold in...

Question 13

Standards based on the amount of input that should be used per unit of output are called

Accepted Answer

A)  quantity standards. 
B)  price standards. 
C)  ideal standards. 
D)  currently attainable standards. 
E)  kaizen standards. 
A)  quantity standards. 
B)  price standards. 
C)  ideal standards. 
D)  currently attainable standards. 
E)  kaizen standards.

Question 14

DuRoss Company produces coats. The company uses a standard costing system and has set the following standards for materials and labor:
   During the year DuRoss produced 55,000 coats. Actual fabric purchased was 460,000 yards at $5.75 per yard. There were no beginning or ending inventories of fabric. Actual direct labor was 120,000 hours at $19.25 per hour.

Accepted Answer

The answer of DuRoss Company produces coats. The company uses...

Question 15

Which of the following is not true about Kaizen Standards?

Accepted Answer

A)  Kaizen standards are the standards used for continuous improvement. 
B)  Kaizen standards are a currently attainable standard that reflects planned improvement. 
C)  Kaizen standards are constantly changing. 
D)  Kaizen standards are the standards used in traditional costing systems. 
A)  Kaizen standards are the standards used for continuous improvement. 
B)  Kaizen standards are a currently attainable standard that reflects planned improvement. 
C)  Kaizen standards are constantly changing. 
D)  Kaizen standards are the standards used in traditional costing systems.

Question 16

Just Right Inc. produces jeans. The following standards have been established:
   During the year 25,000 pairs of jeans were produced. 150,000 yards of denim were purchased and used at $1.23 per yard. Actual direct labor hours were 36,800 at $9.25 per hour.

Accepted Answer

The answer of Just Right Inc. produces jeans. The following...

Question 17

Variances indicate

Accepted Answer

A)  that actual performance is not going according to plan. 
B)  the cause of the variance. 
C)  who is responsible for the variance. 
D)  when the variance should be investigated. 
E)  none of these. 
A)  that actual performance is not going according to plan. 
B)  the cause of the variance. 
C)  who is responsible for the variance. 
D)  when the variance should be investigated. 
E)  none of these.

Question 18

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 a favorable materials price variance of $500. The standard cost per pound must be

Accepted Answer

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

Question 19

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 James' materials price variance assuming that materials purchased equals materials used?

Accepted Answer

A)  $750,000 F 
B)  $700,000 F 
C)  $700,000 U 
D)  $750,00 U 
A)  $750,000 F 
B)  $700,000 F 
C)  $700,000 U 
D)  $750,00 U

Question 20

The sources of quantitative standards include

Accepted Answer

A)  historical experience. 
B)  engineering studies. 
C)  input from operating personnel. 
D)  historical experience, engineering studies, and input from operating personnel. 
E)  None of these. 
A)  historical experience. 
B)  engineering studies. 
C)  input from operating personnel. 
D)  historical experience, engineering studies, and input from operating personnel. 
E)  None of these.

The usage variance is the difference between the actual and standard quantity of inputs

Which of the following is true regarding direct labor variances?

The standard cost system differs from the actual cost system in the assignment of

Which of the following is not true regarding the use of materials variance information?

Price standards are based on

Eastminster Company has the following information:

McDaniel Company manufactures 100-pound bags of fertilizer that have the following unit standard costs for direct materials and direct labor: The following activities were recorded for October: There were no beginning or ending work-in-process inventories. Required:

An acceptable range is established in order to determine if whether variances are significant. The acceptable range is the standard, plus or minus an allowable deviation.

PURE Inc. produces flavored waters, sold in gallons. Recently the company adopted the following materials standard for one gallon of its raspberry flavored water:

Standards based on the amount of input that should be used per unit of output are called

Which of the following is not true about Kaizen Standards?

Just Right Inc. produces jeans. The following standards have been established: During the year 25,000 pairs of jeans were produced. 150,000 yards of denim were purchased and used at $1.23 per yard. Actual direct labor hours were 36,800 at $9.25 per hour.

Variances indicate

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 a favorable materials price variance of $500. The standard cost per pound must be

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 James' materials price variance assuming that materials purchased equals materials used?

The sources of quantitative standards include

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

The usage variance is the difference between the actual and standard quantity of inputs

Which of the following is true regarding direct labor variances?

The standard cost system differs from the actual cost system in the assignment of

Which of the following is not true regarding the use of materials variance information?

Price standards are based on

Eastminster Company has the following information:

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 upper and lower control limits are, respectively,

McDaniel Company manufactures 100-pound bags of fertilizer that have the following unit standard costs for direct materials and direct labor: The following activities were recorded for October: There were no beginning or ending work-in-process inventories. Required:

An acceptable range is established in order to determine if whether variances are significant. The acceptable range is the standard, plus or minus an allowable deviation.

PURE Inc. produces flavored waters, sold in gallons. Recently the company adopted the following materials standard for one gallon of its raspberry flavored water:

Standards based on the amount of input that should be used per unit of output are called

Which of the following is not true about Kaizen Standards?

Just Right Inc. produces jeans. The following standards have been established: During the year 25,000 pairs of jeans were produced. 150,000 yards of denim were purchased and used at $1.23 per yard. Actual direct labor hours were 36,800 at $9.25 per hour.

Variances indicate

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 a favorable materials price variance of $500. The standard cost per pound must be

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 James' materials price variance assuming that materials purchased equals materials used?

The sources of quantitative standards include

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