Question 1

Which of the following is true regarding the disposition of materials and labor variances?

Accepted Answer

A)  The variances for materials and labor are closed directly to Cost of Goods Sold regardless of materiality. 
B)  If the materials price variance is material, it is prorated among Materials Inventory, Materials Usage Variance, Work in Process, and Finished Goods. 
C)  The materials usage variance and the labor variances, if material, are prorated among Work in Process, Finished Goods, and Cost of Goods Sold. 
D)  The materials usage variance and the labor variances are always prorated among Work in Process, Finished Goods, and Cost of Goods Sold. 
E)  The materials usage variance and the labor variances are always closed to Cost of Goods Sold. 
A)  The variances for materials and labor are closed directly to Cost of Goods Sold regardless of materiality. 
B)  If the materials price variance is material, it is prorated among Materials Inventory, Materials Usage Variance, Work in Process, and Finished Goods. 
C)  The materials usage variance and the labor variances, if material, are prorated among Work in Process, Finished Goods, and Cost of Goods Sold. 
D)  The materials usage variance and the labor variances are always prorated among Work in Process, Finished Goods, and Cost of Goods Sold. 
E)  The materials usage variance and the labor variances are always closed to Cost of Goods Sold.

Question 2

The quantity of each input that should be used to produce one unit of output is documented on the standard cost sheet.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A)  The actual wage rate is almost always different from the standard rate. 
B)  Unexpected overtime can cause variation in the labor rate. 
C)  An average wage rate is chosen as the labor rate standard. 
D)  The production manager controls the use of labor. 
E)  The actual wage rate is used in determining the labor rate variance. 
A)  The actual wage rate is almost always different from the standard rate. 
B)  Unexpected overtime can cause variation in the labor rate. 
C)  An average wage rate is chosen as the labor rate standard. 
D)  The production manager controls the use of labor. 
E)  The actual wage rate is used in determining the labor rate variance.

Question 4

A kaizen standard reflects the realized improvements for the past periods and a search for more improvements for the future.

Accepted Answer

A) True 
 B)False

Question 5

Rhodes Corporation manufactures a product with the following standard costs:
   Standards are based on normal monthly production involving 2,000 direct labor hours (500 units of output).
The following information pertains to July:
   Required:

Accepted Answer

The answer of Rhodes Corporation manufactures a product with the...

Question 6

Grandma's Attic Company produces soft pillows made from goose down. The company uses a standard cost system and has set the following standards for materials and labor for each pillow:
   During the month, the company produced 1,000 goose down pillows. Actual geese purchased were 5,100, at $4 per goose. Actual fabric purchased was 2,900 yards at $2.10 per yard. There were no beginning or ending inventories of geese or fabric. Actual direct labor was 5,200 hours at $7.75 per hour.

Accepted Answer

The answer of Grandma's Attic Company produces soft pillows made...

Question 7

Favorable variances are credits and unfavorable variances are debits.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is true regarding currently attainable standards?

Accepted Answer

A)  They can be achieved under efficient operating conditions. 
B)  Allowance is made for normal breakdowns, interruptions, etc. 
C)  They are challenging but achievable. 
D)  They tend to achieve higher performance levels from personnel. 
E)  All of these. 
A)  They can be achieved under efficient operating conditions. 
B)  Allowance is made for normal breakdowns, interruptions, etc. 
C)  They are challenging but achievable. 
D)  They tend to achieve higher performance levels from personnel. 
E)  All of these.

Question 9

The ____________________ measures the difference between what should have been paid for raw materials and what was actually paid.

Accepted Answer

materials

Question 10

Allison Company adopted a standard cost system several years ago. The standard costs for the prime costs of its single product follow:
   The following operating data were taken from the records for November:
   Compute the following:

Accepted Answer

The answer of Allison Company adopted a standard cost system...

Question 11

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' total labor variance?

Accepted Answer

A)  $61,500 F 
B)  $76,500 F 
C)  $76,500 U 
D)  $61,500 U 
A)  $61,500 F 
B)  $76,500 F 
C)  $76,500 U 
D)  $61,500 U

Question 12

The unit standard quantity of inputs is vital to the computation of total amount of inputs allowed for the actual output and efficiency variances.

Accepted Answer

A) True 
 B)False

Question 13

Ideal standards can be achieved only if everything operates perfectly, meaning that they do not allow for any machine breakdowns, slack, etc.

Accepted Answer

A) True 
 B)False

Question 14

Refer to Figure 10-8. What is Perfect's labor rate variance?

Accepted Answer

A)  $57,500 U 
B)  $57,500 F 
C)  $60,000 U 
D)  $60,000 F 
A)  $57,500 U 
B)  $57,500 F 
C)  $60,000 U 
D)  $60,000 F

Question 15

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 Extreme Builders' labor rate variance.

Accepted Answer

A)  $540,000 U 
B)  $540,000 F 
C)  $648,000 U 
D)  $648,000 F 
A)  $540,000 U 
B)  $540,000 F 
C)  $648,000 U 
D)  $648,000 F

Question 16

The labor rate variance is computed by

Accepted Answer

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

Question 17

Roberts Company uses a standard costing system. The following information pertains to direct materials for the July:   Roberts Company reports its material price variances at the time of purchase. What is the material usage variance for Roberts Company?

Accepted Answer

A)  $900 F 
B)  $1,950 F 
C)  $2,850 F 
D)  $900 U 
A)  $900 F 
B)  $1,950 F 
C)  $2,850 F 
D)  $900 U

Question 18

Which of the following is not true regarding engineering studies?

Accepted Answer

A)  They can determine the most efficient way to operate. 
B)  They are often achievable by operating personnel. 
C)  They provide very rigorous guidelines. 
D)  All of these statements are true. 
E)  More than two of these statements are true. 
A)  They can determine the most efficient way to operate. 
B)  They are often achievable by operating personnel. 
C)  They provide very rigorous guidelines. 
D)  All of these statements are true. 
E)  More than two of these statements are true.

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' labor rate variance?

Accepted Answer

A)  $190,625 F 
B)  $250,000 F 
C)  $250,000 U 
D)  $193,750 U 
A)  $190,625 F 
B)  $250,000 F 
C)  $250,000 U 
D)  $193,750 U

Question 20

Materials Usage 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

Which of the following is true regarding the disposition of materials and labor variances?

The quantity of each input that should be used to produce one unit of output is documented on the standard cost sheet.

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

A kaizen standard reflects the realized improvements for the past periods and a search for more improvements for the future.

Rhodes Corporation manufactures a product with the following standard costs: Standards are based on normal monthly production involving 2,000 direct labor hours (500 units of output). The following information pertains to July: Required:

Favorable variances are credits and unfavorable variances are debits.

Which of the following is true regarding currently attainable standards?

The ____________________ measures the difference between what should have been paid for raw materials and what was actually paid.

Allison Company adopted a standard cost system several years ago. The standard costs for the prime costs of its single product follow: The following operating data were taken from the records for November: Compute the following:

The unit standard quantity of inputs is vital to the computation of total amount of inputs allowed for the actual output and efficiency variances.

Ideal standards can be achieved only if everything operates perfectly, meaning that they do not allow for any machine breakdowns, slack, etc.

Refer to Figure 10-8. What is Perfect's labor rate variance?

The labor rate variance is computed by

Roberts Company uses a standard costing system. The following information pertains to direct materials for the July: Roberts Company reports its material price variances at the time of purchase. What is the material usage variance for Roberts Company?

Which of the following is not true regarding engineering studies?

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' labor rate variance?

Materials Usage Variance

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

Which of the following is true regarding the disposition of materials and labor variances?

The quantity of each input that should be used to produce one unit of output is documented on the standard cost sheet.

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

A kaizen standard reflects the realized improvements for the past periods and a search for more improvements for the future.

Rhodes Corporation manufactures a product with the following standard costs: Standards are based on normal monthly production involving 2,000 direct labor hours (500 units of output). The following information pertains to July: Required:

Favorable variances are credits and unfavorable variances are debits.

Which of the following is true regarding currently attainable standards?

The ____________________ measures the difference between what should have been paid for raw materials and what was actually paid.

Allison Company adopted a standard cost system several years ago. The standard costs for the prime costs of its single product follow: The following operating data were taken from the records for November: Compute the following:

The unit standard quantity of inputs is vital to the computation of total amount of inputs allowed for the actual output and efficiency variances.

Ideal standards can be achieved only if everything operates perfectly, meaning that they do not allow for any machine breakdowns, slack, etc.

Refer to Figure 10-8. What is Perfect's labor rate variance?

The labor rate variance is computed by

Roberts Company uses a standard costing system. The following information pertains to direct materials for the July: Roberts Company reports its material price variances at the time of purchase. What is the material usage variance for Roberts Company?

Which of the following is not true regarding engineering studies?

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' labor rate variance?

Materials Usage Variance

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