Question 1

Normally standard costs should be revised when labor rates change to incorporate new
union contracts.

Accepted Answer

A) True 
 B)False

Question 2

The formula to compute direct material quantity variance is to calculate the difference between

Accepted Answer

A) actual costs - standard costs. 
B) standard costs - actual costs. 
C) (actual quantity * standard price)- standard costs. 
D) actual costs - (standard price * standard costs). 
A) actual costs - standard costs. 
B) standard costs - actual costs. 
C) (actual quantity * standard price)- standard costs. 
D) actual costs - (standard price * standard costs).

Question 3

Ideal standards are developed under conditions that assume no idle time,no machine breakdowns,and no materials spoilage.

Accepted Answer

A) True 
 B)False

Question 4

The cash payments for manufacturing in the month of May are

Accepted Answer

A) $185,600. 
B) $156,800. 
C) $124,800. 
D) $146,400. 
A) $185,600. 
B) $156,800. 
C) $124,800. 
D) $146,400.

Question 5

The production budget is the starting point for preparation of the direct labor cost budget.

Accepted Answer

A) True 
 B)False

Question 6

The master budget of a small manufacturer would normally include all necessary component budgets EXCEPT the capital expenditures budget.

Accepted Answer

A) True 
 B)False

Question 7

If the expected sales volume for the current period is 7,000 units,the desired ending inventory is 400 units,and the beginning inventory is 300 units,the number of units set forth in the production budget,representing total production for the current period,is

Accepted Answer

A) 6,900. 
B) 7,000. 
C) 7,200. 
D) 7,100. 
A) 6,900. 
B) 7,000. 
C) 7,200. 
D) 7,100.

Question 8

The budgeted direct materials purchases are normally computed as the sum of (1)the materials for production and (2)the desired ending inventory.

Accepted Answer

A) True 
 B)False

Question 9

Financial reporting systems that are guided by the principle of exceptions concept focus attention on variances from standard costs.

Accepted Answer

A) True 
 B)False

Question 10

The standard costs and actual costs for direct labor for the manufacture of 2,500 actual units of product are as follows:
 
The amount of the direct labor rate variance is

Accepted Answer

A) $4,440 unfavorable. 
B) $4,500 favorable. 
C) $4,440 favorable. 
D) $4,500 unfavorable. 
A) $4,440 unfavorable. 
B) $4,500 favorable. 
C) $4,440 favorable. 
D) $4,500 unfavorable.

Question 11

The following data relate to direct labor costs for the current period:
 
What is the direct labor time variance?

Accepted Answer

A) $23,000 unfavorable 
B) $23,500 unfavorable 
C) $23,500 favorable 
D) $23,000 favorable 
A) $23,000 unfavorable 
B) $23,500 unfavorable 
C) $23,500 favorable 
D) $23,000 favorable

Question 12

Production estimates for August are as follows:
 
For each unit produced,the direct materials requirements are as follows:
 
The number of pounds of materials A and B required for August production is

Accepted Answer

A) 195,000 lbs.of A;39,000 lbs.of B. 
B) 200,000 lbs.of A;40,000 lbs.of B. 
C) 205,000 lbs.of A;41,000 lbs.of B. 
D) 210,000 lbs.of A;42,000 lbs.of B. 
A) 195,000 lbs.of A;39,000 lbs.of B. 
B) 200,000 lbs.of A;40,000 lbs.of B. 
C) 205,000 lbs.of A;41,000 lbs.of B. 
D) 210,000 lbs.of A;42,000 lbs.of B.

Question 13

The budget procedure that requires all levels of management to start from zero in estimating sales,production,and other operating data is called zero-based budgeting.

Accepted Answer

A) True 
 B)False

Question 14

In most businesses,cost standards are established principally by accountants.

Accepted Answer

A) True 
 B)False

Question 15

If the standard to produce a given amount of product is 500 direct labor hours at $15 and the actual was 600 hours at $17,the time variance was $1,500 favorable.

Accepted Answer

A) True 
 B)False

Question 16

If the standard to produce a given amount of product is 16,000 hours at a factory overhead rate of $5 ($3 fixed,$2 variable),actual variable factory overhead was $26,400,actual fixed factory overhead was $45,000,and 100% of productive capacity is 15,000 hours,the volume variance was $3,000 favorable.

Accepted Answer

A) True 
 B)False

Question 17

Standard and actual costs for direct materials for the manufacture of 1,000 units of product were as follows:
   
Determine the (a)quantity variance, (b)price variance,and (c)total direct materials cost variance.

Accepted Answer

The answer of Standard and actual costs for direct materials...

Question 18

As a device for measuring efficiency,standard cost systems enable management to determine the causes of differences between what a product should cost and how much it actually costs to produce.

Accepted Answer

A) True 
 B)False

Question 19

The cash payments for manufacturing in the month of April are

Accepted Answer

A) $128,000. 
B) $117,600. 
C) $156,800. 
D) $96,000. 
A) $128,000. 
B) $117,600. 
C) $156,800. 
D) $96,000.

Question 20

The first budget customarily prepared as part of an entity's master budget is the

Accepted Answer

A) production budget. 
B) cash budget. 
C) sales budget. 
D) direct materials purchases. 
A) production budget. 
B) cash budget. 
C) sales budget. 
D) direct materials purchases.

Normally standard costs should be revised when labor rates change to incorporate new union contracts.

The formula to compute direct material quantity variance is to calculate the difference between

Ideal standards are developed under conditions that assume no idle time,no machine breakdowns,and no materials spoilage.

The cash payments for manufacturing in the month of May are

The production budget is the starting point for preparation of the direct labor cost budget.

The master budget of a small manufacturer would normally include all necessary component budgets EXCEPT the capital expenditures budget.

If the expected sales volume for the current period is 7,000 units,the desired ending inventory is 400 units,and the beginning inventory is 300 units,the number of units set forth in the production budget,representing total production for the current period,is

The budgeted direct materials purchases are normally computed as the sum of (1)the materials for production and (2)the desired ending inventory.

Financial reporting systems that are guided by the principle of exceptions concept focus attention on variances from standard costs.

The standard costs and actual costs for direct labor for the manufacture of 2,500 actual units of product are as follows: The amount of the direct labor rate variance is

The following data relate to direct labor costs for the current period: What is the direct labor time variance?

Production estimates for August are as follows: For each unit produced,the direct materials requirements are as follows: The number of pounds of materials A and B required for August production is

The budget procedure that requires all levels of management to start from zero in estimating sales,production,and other operating data is called zero-based budgeting.

In most businesses,cost standards are established principally by accountants.

If the standard to produce a given amount of product is 500 direct labor hours at $15 and the actual was 600 hours at $17,the time variance was $1,500 favorable.

Standard and actual costs for direct materials for the manufacture of 1,000 units of product were as follows: Determine the (a)quantity variance, (b)price variance,and (c)total direct materials cost variance.

As a device for measuring efficiency,standard cost systems enable management to determine the causes of differences between what a product should cost and how much it actually costs to produce.

The cash payments for manufacturing in the month of April are

The first budget customarily prepared as part of an entity's master budget is the

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley,internal Control,and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

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Exam 13: Budgeting and Standard Cost Systems

Normally standard costs should be revised when labor rates change to incorporate new union contracts.

The formula to compute direct material quantity variance is to calculate the difference between

Ideal standards are developed under conditions that assume no idle time,no machine breakdowns,and no materials spoilage.

The cash payments for manufacturing in the month of May are

The production budget is the starting point for preparation of the direct labor cost budget.

The master budget of a small manufacturer would normally include all necessary component budgets EXCEPT the capital expenditures budget.

If the expected sales volume for the current period is 7,000 units,the desired ending inventory is 400 units,and the beginning inventory is 300 units,the number of units set forth in the production budget,representing total production for the current period,is

The budgeted direct materials purchases are normally computed as the sum of (1)the materials for production and (2)the desired ending inventory.

Financial reporting systems that are guided by the principle of exceptions concept focus attention on variances from standard costs.

The standard costs and actual costs for direct labor for the manufacture of 2,500 actual units of product are as follows: The amount of the direct labor rate variance is

The following data relate to direct labor costs for the current period: What is the direct labor time variance?

Production estimates for August are as follows: For each unit produced,the direct materials requirements are as follows: The number of pounds of materials A and B required for August production is

The budget procedure that requires all levels of management to start from zero in estimating sales,production,and other operating data is called zero-based budgeting.

In most businesses,cost standards are established principally by accountants.

If the standard to produce a given amount of product is 500 direct labor hours at $15 and the actual was 600 hours at $17,the time variance was $1,500 favorable.

Standard and actual costs for direct materials for the manufacture of 1,000 units of product were as follows: Determine the (a)quantity variance, (b)price variance,and (c)total direct materials cost variance.

As a device for measuring efficiency,standard cost systems enable management to determine the causes of differences between what a product should cost and how much it actually costs to produce.

The cash payments for manufacturing in the month of April are

The first budget customarily prepared as part of an entity's master budget is the

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley,internal Control,and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

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