Question 1

All of the following are true regarding variance investigation except

Accepted Answer

A)  the investigation should be undertaken only if the anticipated benefits are greater than the expected costs. 
B)  managers must consider whether a variance will recur. 
C)  it is difficult to assess the costs and benefits of variance analysis on a case-by-case basis. 
D)  variances are not investigated unless they are large enough to be of a concern. 
E)  every variance is investigated. 
A)  the investigation should be undertaken only if the anticipated benefits are greater than the expected costs. 
B)  managers must consider whether a variance will recur. 
C)  it is difficult to assess the costs and benefits of variance analysis on a case-by-case basis. 
D)  variances are not investigated unless they are large enough to be of a concern. 
E)  every variance is investigated.

Question 2

Pontefract Company produced 2,500 widgets during November using 4,000 units of materials at a cost of $5.00 each. It also used 5,000 direct labor hours at a rate of $7.00. Its direct materials standard is 2 units per widget. Its direct labor standard is 2.5 hours per widget.
Its materials price variance was a favorable $8,000 and its labor rate variance was an unfavorable $1,000.

Accepted Answer

The answer of Pontefract Company produced 2,500 widgets during November...

Question 3

Claire Company uses a standard costing system. The following information pertains to direct labor costs for February:   What is the total labor budget variance for Claire Company?

Accepted Answer

A)  $18,000 F 
B)  $12,000 F 
C)  $18,000 U 
D)  $12,000 U 
A)  $18,000 F 
B)  $12,000 F 
C)  $18,000 U 
D)  $12,000 U

Question 4

The sum of the labor rate and labor efficiency variances will always add up to the total labor variance.

Accepted Answer

A) True 
 B)False

Question 5

Ideal standards can be achieved under efficient operating conditions.

Accepted Answer

A) True 
 B)False

Question 6

Crawford Corporation has the following information:

Accepted Answer

The answer of Crawford Corporation has the following information:
 ...

Question 7

Acme Company's standard cost is $500,000. The allowable deviation is $\pm$10%. Its actual costs for three months are   
The upper and lower control limits are, respectively,

Accepted Answer

A)  $550,000 and $450,000 
B)  $500,000 and $450,000 
C)  $550,000 and $500,000 
D)  $575,000 and $520,000 
A)  $550,000 and $450,000 
B)  $500,000 and $450,000 
C)  $550,000 and $500,000 
D)  $575,000 and $520,000

Question 8

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

Accepted Answer

A)  $100,000 F 
B)  $112,500 U 
C)  $135,000 F 
D)  $170,000 U 
A)  $100,000 F 
B)  $112,500 U 
C)  $135,000 F 
D)  $170,000 U

Question 9

During September, 40,000 units were produced. The standard quantity of material allowed per unit was 5 pounds at a standard cost of $2.50 per pound. If there was a favorable usage variance of $25,000 for September, the actual quantity of materials used must have been

Accepted Answer

A)  210,000 pounds. 
B)  190,000 pounds. 
C)  105,000 pounds. 
D)  95,000 pounds. 
A)  210,000 pounds. 
B)  190,000 pounds. 
C)  105,000 pounds. 
D)  95,000 pounds.

Question 10

Mover Company has developed the following standards for one of its products:   The following activity occurred during March:
  The company records materials price variances at the time of purchase. The variable standard cost per unit for materials and labor is

Accepted Answer

A)  $98. 
B)  $84. 
C)  $74. 
D)  $38. 
A)  $98. 
B)  $84. 
C)  $74. 
D)  $38.

Question 11

Match each item with the correct statement below.
-This is the standard plus the allowable deviation when determining whether variances are significant.

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 12

Top Notch Music Inc. produces car stereos. During the year Top Notch Music produced 7,000 stereos. Materials and labor standards for producing these units are as follows:

Accepted Answer

The answer of Top Notch Music Inc. produces car stereos....

Question 13

_______________ often means the difference between success and failure or between above-average profits and lesser profits.

Accepted Answer

The answer of _______________ often means the difference between success...

Question 14

During September, a small roofing company purchased 500 bundles of a certain type of shingle at a price of $35 per bundle, $5 less than the standard price. Its standard quantity of this type of shingle is 550 bundles. What is the journal entry to record the purchase of materials?

Accepted Answer

The answer of During September, a small roofing company purchased...

Question 15

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.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A)  the total budget variance. 
B)  the usage variance. 
C)  the price variance. 
D)  the efficiency variance. 
E)  the budget variance. 
A)  the total budget variance. 
B)  the usage variance. 
C)  the price variance. 
D)  the efficiency variance. 
E)  the budget variance.

Question 17

Total Direct Labor 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 18

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 close the variances of labor and materials?

Accepted Answer

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

Question 19

Leeds Company uses the following rule to determine whether labor efficiency variances should be investigated:
A labor efficiency variance will be investigated when the variance is greater than either $100 or 10% of the standard labor cost.
During September, the company used 500 direct labor hours at a rate of $15 per hour. Its standard rate is 475 direct labor hours at a rate of $14.50 per hour.

Accepted Answer

The answer of Leeds Company uses the following rule to...

Question 20

High Fliers Company produces model airplanes. During the month of November, it produced 2,000 planes. The actual labor hours were 7 hours per plane. Its standard labor hours are 10 hours per plane. The standard labor rate is $11 per hour. At the end of November, High Fliers found that it had a favorable labor rate variance of $10,500.
-Refer to Figure 10-4. What was High Fliers' actual cost per labor hour?

Accepted Answer

A)  $12.75 
B)  $11.50 
C)  $10.50 
D)  $10.25 
A)  $12.75 
B)  $11.50 
C)  $10.50 
D)  $10.25

All of the following are true regarding variance investigation except

Claire Company uses a standard costing system. The following information pertains to direct labor costs for February: What is the total labor budget variance for Claire Company?

The sum of the labor rate and labor efficiency variances will always add up to the total labor variance.

Ideal standards can be achieved under efficient operating conditions.

Crawford Corporation has the following information:

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

During September, 40,000 units were produced. The standard quantity of material allowed per unit was 5 pounds at a standard cost of $2.50 per pound. If there was a favorable usage variance of $25,000 for September, the actual quantity of materials used must have been

Mover Company has developed the following standards for one of its products: The following activity occurred during March: The company records materials price variances at the time of purchase. The variable standard cost per unit for materials and labor is

Match each item with the correct statement below. -This is the standard plus the allowable deviation when determining whether variances are significant.

Top Notch Music Inc. produces car stereos. During the year Top Notch Music produced 7,000 stereos. Materials and labor standards for producing these units are as follows:

_______________ often means the difference between success and failure or between above-average profits and lesser profits.

During September, a small roofing company purchased 500 bundles of a certain type of shingle at a price of $35 per bundle, $5 less than the standard price. Its standard quantity of this type of shingle is 550 bundles. What is the journal entry to record the purchase of materials?

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.

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

Total Direct Labor Variance

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 close the variances of labor and materials?

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

All of the following are true regarding variance investigation except

Claire Company uses a standard costing system. The following information pertains to direct labor costs for February: What is the total labor budget variance for Claire Company?

The sum of the labor rate and labor efficiency variances will always add up to the total labor variance.

Ideal standards can be achieved under efficient operating conditions.

Crawford Corporation has the following information:

Acme Company's standard cost is $500,000. The allowable deviation is ±\pm± 10%. Its actual costs for three months are The upper and lower control limits are, respectively,

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

During September, 40,000 units were produced. The standard quantity of material allowed per unit was 5 pounds at a standard cost of $2.50 per pound. If there was a favorable usage variance of $25,000 for September, the actual quantity of materials used must have been

Mover Company has developed the following standards for one of its products: The following activity occurred during March: The company records materials price variances at the time of purchase. The variable standard cost per unit for materials and labor is

Match each item with the correct statement below. -This is the standard plus the allowable deviation when determining whether variances are significant.

Top Notch Music Inc. produces car stereos. During the year Top Notch Music produced 7,000 stereos. Materials and labor standards for producing these units are as follows:

_______________ often means the difference between success and failure or between above-average profits and lesser profits.

During September, a small roofing company purchased 500 bundles of a certain type of shingle at a price of $35 per bundle, $5 less than the standard price. Its standard quantity of this type of shingle is 550 bundles. What is the journal entry to record the purchase of materials?

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.

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

Total Direct Labor Variance

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 close the variances of labor and materials?

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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