Question 1

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 2

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

Accepted Answer

materials

Question 3

Which of the following relationships is valid concerning fixed overhead budgeted at the beginning of the year?

Accepted Answer

A)  BFOH = SFOR × AH 
B)  BFOH = SFOR × SH for actual production 
C)  BFOH = SFOR × SH for planned production 
D)  BFOH = SFOR / SH for actual production 
E)  None of these. 
A)  BFOH = SFOR × AH 
B)  BFOH = SFOR × SH for actual production 
C)  BFOH = SFOR × SH for planned production 
D)  BFOH = SFOR / SH for actual production 
E)  None of these.

Question 4

Match the variance with its correct calculation.
-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 5

Match the variance with its correct calculation.
-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

Question 6

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 7

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 8

During April, a small roofing company purchased 500 bundles of a certain type of shingle at a price of $20 per bundle, $5 more than the standard price.The standard quantity of this type of shingle is 550 bundles. What is the journal entry to record the issuance and usage of materials assuming that the roofing company purchased and used 500 bundles?

Accepted Answer

A)  
  
B) 
  
C)

D)  
  
A)  
  
B) 
  
C)

D)

Question 9

During June, Zinc Company produced 10,000 chainsaw blades.The standard quantity of material allowed per unit was 2 pounds of steel per blade at a standard cost of $5 per pound.Zinc determined that it had a favorable materials usage variance of $1,500 for June.Calculate the actual quantity of materials used by Zinc Company in June.

Accepted Answer

A)  19,700 pounds 
B)  13,305 pounds 
C)  12,645 pounds 
D)  17,425 pounds 
A)  19,700 pounds 
B)  13,305 pounds 
C)  12,645 pounds 
D)  17,425 pounds

Question 10

Which of the following sources of quantitative standards should be used with caution because it can perpetuate inefficiencies?

Accepted Answer

A)  Historical experience 
B)  Engineering studies 
C)  Input from operating personnel 
D)  Statistical methods 
E)  None of these 
A)  Historical experience 
B)  Engineering studies 
C)  Input from operating personnel 
D)  Statistical methods 
E)  None of these

Question 11

Managers develop quantity standards when they decide what amount of input should be used per unit of output.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following formulas calculates the total fixed overhead (FOH) variance?

Accepted Answer

A)  Standard Fixed Overhead - Variable Fixed Overhead 
B)  Actual Fixed Overhead - (Standard Variable Overhead Rate × Standard Hours Allowed) 
C)  Actual Fixed Overhead - Applied Fixed Overhead 
D)  Actual Fixed Overhead - (Standard Fixed Overhead × Actual Direct Labor Hours Used) 
E)  (Total actual overhead - Standard Fixed Overhead) × Standard Hours Allowed 
A)  Standard Fixed Overhead - Variable Fixed Overhead 
B)  Actual Fixed Overhead - (Standard Variable Overhead Rate × Standard Hours Allowed) 
C)  Actual Fixed Overhead - Applied Fixed Overhead 
D)  Actual Fixed Overhead - (Standard Fixed Overhead × Actual Direct Labor Hours Used) 
E)  (Total actual overhead - Standard Fixed Overhead) × Standard Hours Allowed

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

Tetrene Fliers Company produces model airplanes.During the month of November, it produced 2,500 planes.The actual labor hours were 9 hours per plane.Its standard labor hours are 12 hours per plane.The standard labor rate is $8 per hour.At the end of November, Tetrene Fliers found that it had a favorable labor rate variance of $9,000. ​
What was Tetrene Fliers' total labor variance?

Accepted Answer

A)  $610,000 F 
B)  $69,000 F 
C)  $723,500 U 
D)  $41,500 U 
A)  $610,000 F 
B)  $69,000 F 
C)  $723,500 U 
D)  $41,500 U

Question 15

Fixed overhead was budgeted at $84,000 and 10,000 direct labor hours were budgeted.If the fixed overhead volume variance was $3,200 unfavorable and the fixed overhead spending variance was $1,200 favorable, fixed overhead applied must be

Accepted Answer

A)  $85,200. 
B)  $80,800. 
C)  $82,800. 
D)  $82,000. 
E)  $87,200. 
A)  $85,200. 
B)  $80,800. 
C)  $82,800. 
D)  $82,000. 
E)  $87,200.

Question 16

The total budget variance is the difference between the actual cost of the input and its planned cost.

Accepted Answer

A) True 
 B)False

Question 17

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 18

Kris Company calculates its predetermined rates using practical volume, which is 325,000 units.The standard cost system allows 3 direct labor hours per unit produced.Overhead is applied using direct labor hours.The total budgeted overhead is $4,260,000, of which $994,000 is fixed overhead.The actual results for the year are as follows:  
 
-  Calculate the fixed overhead spending variance.

Accepted Answer

A)  $32,000 F 
B)  $0 
C)  $4,000 U 
D)  $12,000 U 
E)  $4,000 F 
A)  $32,000 F 
B)  $0 
C)  $4,000 U 
D)  $12,000 U 
E)  $4,000 F

Question 19

James Company manufactures t-shirts.During the year, it manufactured 250,000 t-shirts, using 2 hours of direct labor at a rate of $8.50 per hour.The materials and labor standards for manufacturing the t-shirts are:  
  
-  It took James 1,400,000 yards at $2.50 per yard to make the 250,000 t-shirts.
What is the entry to record the purchase of materials?

Accepted Answer

A)  
  
B)  
  
C)  
  
D)  
  
A)  
  
B)  
  
C)  
  
D)

Question 20

Anemone Company manufactures model airplanes.During the month, it manufactured 20,000 airplanes.Each one used an average of 8 direct labor hours and an average of 2 sheets of aluminum.It normally manufactures 8,000 airplanes.Materials and labor standards for making the airplanes are as follows: 
  Compute the standard hours allowed for a volume of 20,000 airplanes.

Accepted Answer

A)  100,000 hours 
B)  420,000 hours 
C)  70,000 hours 
D)  65,000 hours 
A)  100,000 hours 
B)  420,000 hours 
C)  70,000 hours 
D)  65,000 hours

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

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

Which of the following relationships is valid concerning fixed overhead budgeted at the beginning of the year?

Match the variance with its correct calculation. -Budgeted Costs

Match the variance with its correct calculation. -Materials Usage Variance

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 true regarding the disposition of materials and labor variances?

Which of the following sources of quantitative standards should be used with caution because it can perpetuate inefficiencies?

Managers develop quantity standards when they decide what amount of input should be used per unit of output.

Which of the following formulas calculates the total fixed overhead (FOH) variance?

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

Fixed overhead was budgeted at $84,000 and 10,000 direct labor hours were budgeted.If the fixed overhead volume variance was $3,200 unfavorable and the fixed overhead spending variance was $1,200 favorable, fixed overhead applied must be

The total budget variance is the difference between the actual cost of the input and its planned cost.

All of the following are true regarding variance investigation except

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior, Cost Forecasting, and Segmented Income Statements

Job-Order Costing and Normal Cost Overhead Application

Activity-Based Costing and Management

Process Costing

Cost-Volume-Profit Analysis

Tactical Decision-Making and Relevant Costing

Profit Planning and Flexible Budgets

Performance Evaluation and Decentralization

Capital Investment Decisions

Emerging Topics in Managerial Accounting: Sustainability, Quality Cost, Lean Accounting, International Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting

Statement of Cash Flows

Financial Statement Analysis

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Exam 10: Standard Costing and Variance Analysis

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

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

Which of the following relationships is valid concerning fixed overhead budgeted at the beginning of the year?

Match the variance with its correct calculation. -Budgeted Costs

Match the variance with its correct calculation. -Materials Usage Variance

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 true regarding the disposition of materials and labor variances?

Which of the following sources of quantitative standards should be used with caution because it can perpetuate inefficiencies?

Managers develop quantity standards when they decide what amount of input should be used per unit of output.

Which of the following formulas calculates the total fixed overhead (FOH) variance?

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

Fixed overhead was budgeted at $84,000 and 10,000 direct labor hours were budgeted.If the fixed overhead volume variance was $3,200 unfavorable and the fixed overhead spending variance was $1,200 favorable, fixed overhead applied must be

The total budget variance is the difference between the actual cost of the input and its planned cost.

All of the following are true regarding variance investigation except

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior, Cost Forecasting, and Segmented Income Statements

Job-Order Costing and Normal Cost Overhead Application

Activity-Based Costing and Management

Process Costing

Cost-Volume-Profit Analysis

Tactical Decision-Making and Relevant Costing

Profit Planning and Flexible Budgets

Performance Evaluation and Decentralization

Capital Investment Decisions

Emerging Topics in Managerial Accounting: Sustainability, Quality Cost, Lean Accounting, International Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters