Question 1

Why do fixed manufacturing cost variances occur?

Accepted Answer

A) Managers do not correctly anticipate changes in wage rates. 
B) Poor materials are used in production. 
C) Supervisors encounter scheduling problems. 
D) Actual fixed costs differ from budgeted fixed costs. 
A) Managers do not correctly anticipate changes in wage rates. 
B) Poor materials are used in production. 
C) Supervisors encounter scheduling problems. 
D) Actual fixed costs differ from budgeted fixed costs.

Question 2

Activity-based costing is commonly used with standard costing.Using activity-based costing,a company has

Accepted Answer

A) a single cost driver 
B) multiple cost drivers. 
C) no cost drivers. 
D) the same cost drivers as standard costing. 
A) a single cost driver 
B) multiple cost drivers. 
C) no cost drivers. 
D) the same cost drivers as standard costing.

Question 3

Solving for materials and labor.Howard Company makes screen doors.Under the flexible budget,when the firm uses 85,000 direct labor hours,budgeted variable overhead is $85,000,whereas budgeted direct labor costs are $573,750.The company applies variable overhead to production units on the basis of direct labor hours.All data apply to the month of February.The following are some of the variances for February (F denotes favorable;U denotes unfavorable):
   
During February,the firm incurred $600,000 of direct labor costs.According to the standards,each screen door uses one pound of materials at a standard price of $5.00 per pound.The firm produced 100,000 screen doors in February.The materials price variance was $0.40 per pound,whereas the average wage rate exceeded the standard average rate by $0.50 per hour.
Required:
Compute the following for February,assuming there are beginning inventories but no ending inventories of materials:
a.pounds of materials purchased
b.pounds of material usage over standard
c.standard hourly wage rate
d.standard direct labor hours for the total February production
(Howard Company;solving for materials and labor. )

Accepted Answer

a.$60,000 / $0.40 = 150,000 pounds [from

Question 4

ABC Company
ABC Company reports the following information for the most recent period when 2,750 units were produced.
 
Refer to ABC Company.Calculate the total direct labor variance.

Accepted Answer

A) $70 F 
B) $200 U 
C) $270 U 
D) $130 U 
A) $70 F 
B) $200 U 
C) $270 U 
D) $130 U

Question 5

Fred's Fine Roasted Coffee
Fred's Fine Roasted Coffee reports the following data for April 2010 where 500,000 pounds of roasted gourmet coffee beans were actually produced (note: standard costs do not allow for any wastage),
 
Refer to Fred's Fine Roasted Coffee.Calculate the direct labor efficiency variance.

Accepted Answer

A) $48,000 F 
B) $20,000 F 
C) $68,000 F 
D) $28,000 F 
A) $48,000 F 
B) $20,000 F 
C) $68,000 F 
D) $28,000 F

Question 6

Most companies report which of the following variances?

Accepted Answer

A) Each type of material. 
B) Each category of labor. 
C) Major cost components of variable overhead. 
D) All of the above. 
A) Each type of material. 
B) Each category of labor. 
C) Major cost components of variable overhead. 
D) All of the above.

Question 7

Ben's Delivery Company
Ben's Delivery Company reports the following information for 2010:
Actual:
 
Standard:
 
Refer to Ben's Delivery Company.What is the variable overhead variance for fuel costs?

Accepted Answer

A) $12.00 U 
B) $12.00 F 
C) $6.00 U 
D) $6.00 F 
A) $12.00 U 
B) $12.00 F 
C) $6.00 U 
D) $6.00 F

Question 8

To help managers in their efforts to control overhead costs,managers and accountants analyze overhead variances using the variable cost variance model by separating variable overhead variances into

Accepted Answer

A) price and quality components. 
B) economy and efficiency components. 
C) price and efficiency components. 
D) economy and effectiveness components. 
A) price and quality components. 
B) economy and efficiency components. 
C) price and efficiency components. 
D) economy and effectiveness components.

Question 9

Ben's Delivery Company
Ben's Delivery Company reports the following information for 2010:
Actual:
 
Standard:
 
Refer to Ben's Delivery Company.What is the actual fuel cost for March 2010?

Accepted Answer

A) $374.00 
B) $352.00 
C) $340.00 
D) $320.00 
A) $374.00 
B) $352.00 
C) $340.00 
D) $320.00

Question 10

KF Company
KF Company uses standard costing.The company reported the following information for the current period:
 
Refer to KF Company.Calculate the variable overhead efficiency variance.

Accepted Answer

A) $1,000 U 
B) $ 500 F 
C) $1,000 F 
D) $ 500 U 
A) $1,000 U 
B) $ 500 F 
C) $1,000 F 
D) $ 500 U

Question 11

For financial reporting purposes,how are fixed manufacturing costs treated?

Accepted Answer

A) Included in the value of inventory. 
B) Not included in the value of inventory. 
C) Treated the same as in managerial accounting. 
D) Not reported. 
A) Included in the value of inventory. 
B) Not included in the value of inventory. 
C) Treated the same as in managerial accounting. 
D) Not reported.

Question 12

Estimating flexible selling expense budget and computing variances.Georgia Peaches estimates the following selling expenses next period:
   
Required:
a.Derive the cost equation (y = a + bx)for selling expenses.(Hint: y = a + bx + cy. )
b.Assume that Georgia actually sells 50,000 units during the period at an average price of $6 per unit.The company had budgeted sales for the period to be: volume,65,000 units;price,$5.50.Calculate the sales price and volume variance.
c.The actual selling expenses incurred during the period were $80,000 fixed and $30,000 variable.Prepare a profit variance analysis for sales revenue and selling expenses.

Accepted Answer

(Georgia Peaches;estimating flexible sel

Question 13

Solving for labor hours.Bill's Engineering Consulting reports the following direct labor information for clerical staff:
   
Required:
What are the actual hours worked,rounded to the nearest hour?
(Bill's Engineering Consulting;solving for labor hours. )

Accepted Answer

@#IMG-DLM&_TB2144_00 $15 X AQ

Question 14

How are fixed manufacturing costs treated for managerial and external reporting purposes?

Accepted Answer

For managerial accounting purposes,fixed

Question 15

Java Gourmet Coffee
Java Gourmet Coffee reports the following data for April 2010 where 200,000 pounds of roasted gourmet coffee beans were actually produced (note: standard costs do not allow for any wastage),
Actual:
 
Standard:
 
Refer to Java Gourmet Coffee.Calculate the actual amount paid for coffee.

Accepted Answer

A) $115,500 
B) $105,000 
C) $100,000 
D) $ 95,500 
A) $115,500 
B) $105,000 
C) $100,000 
D) $ 95,500

Question 16

Overhead variances.Trevor,Inc. ,uses standard costing.The company reported the following overhead information for the current period:
   
Required:
Calculate the variable and fixed overhead variances.
(Trevor Inc. ;overhead variances. )

Accepted Answer

The answer of Overhead variances.Trevor,Inc. ,uses standard costing.The company reported...

Question 17

Java Gourmet Coffee
Java Gourmet Coffee reports the following data for April 2010 where 200,000 pounds of roasted gourmet coffee beans were actually produced (note: standard costs do not allow for any wastage),
Actual:
 
Standard:
 
Refer to Java Gourmet Coffee.Calculate the total direct labor variance.

Accepted Answer

A) $11,000 F 
B) $9,000 U 
C) $20,000 U 
D) $9,500 U 
A) $11,000 F 
B) $9,000 U 
C) $20,000 U 
D) $9,500 U

Question 18

Fred's Fine Roasted Coffee
Fred's Fine Roasted Coffee reports the following data for April 2010 where 500,000 pounds of roasted gourmet coffee beans were actually produced (note: standard costs do not allow for any wastage),
 
Refer to Fred's Fine Roasted Coffee.Calculate the direct materials efficiency variance.

Accepted Answer

A) $51,000 U 
B) $56,000 U 
C) $5,000 U 
D) $40,500 U 
A) $51,000 U 
B) $56,000 U 
C) $5,000 U 
D) $40,500 U

Question 19

Which statement is true concerning the fixed overhead production efficiency variance?

Accepted Answer

A) The production efficiency variance exists as fixed costs are assumed to vary inversely with volume. 
B) The production efficiency variance exists as fixed costs are assumed to vary along with volume. 
C) The production efficiency variance exists as fixed costs are assumed to vary exponentially with volume. 
D) The production efficiency variance does not exist as fixed costs are assumed not to vary with volume. 
A) The production efficiency variance exists as fixed costs are assumed to vary inversely with volume. 
B) The production efficiency variance exists as fixed costs are assumed to vary along with volume. 
C) The production efficiency variance exists as fixed costs are assumed to vary exponentially with volume. 
D) The production efficiency variance does not exist as fixed costs are assumed not to vary with volume.

Question 20

Ben's Delivery Company
Ben's Delivery Company reports the following information for 2010:
Actual:
 
Standard:
 
Refer to Ben's Delivery Company.What is the variable overhead flexible budget for March 2010?

Accepted Answer

A) $374.00 
B) $352.00 
C) $340.00 
D) $320.00 
A) $374.00 
B) $352.00 
C) $340.00 
D) $320.00

Why do fixed manufacturing cost variances occur?

Activity-based costing is commonly used with standard costing.Using activity-based costing,a company has

ABC Company ABC Company reports the following information for the most recent period when 2,750 units were produced. Refer to ABC Company.Calculate the total direct labor variance.

Most companies report which of the following variances?

Ben's Delivery Company Ben's Delivery Company reports the following information for 2010: Actual: Standard: Refer to Ben's Delivery Company.What is the variable overhead variance for fuel costs?

To help managers in their efforts to control overhead costs,managers and accountants analyze overhead variances using the variable cost variance model by separating variable overhead variances into

Ben's Delivery Company Ben's Delivery Company reports the following information for 2010: Actual: Standard: Refer to Ben's Delivery Company.What is the actual fuel cost for March 2010?

KF Company KF Company uses standard costing.The company reported the following information for the current period: Refer to KF Company.Calculate the variable overhead efficiency variance.

For financial reporting purposes,how are fixed manufacturing costs treated?

Solving for labor hours.Bill's Engineering Consulting reports the following direct labor information for clerical staff: Required: What are the actual hours worked,rounded to the nearest hour? (Bill's Engineering Consulting;solving for labor hours. )

How are fixed manufacturing costs treated for managerial and external reporting purposes?

Overhead variances.Trevor,Inc. ,uses standard costing.The company reported the following overhead information for the current period: Required: Calculate the variable and fixed overhead variances. (Trevor Inc. ;overhead variances. )

Java Gourmet Coffee Java Gourmet Coffee reports the following data for April 2010 where 200,000 pounds of roasted gourmet coffee beans were actually produced (note: standard costs do not allow for any wastage), Actual: Standard: Refer to Java Gourmet Coffee.Calculate the total direct labor variance.

Which statement is true concerning the fixed overhead production efficiency variance?

Ben's Delivery Company Ben's Delivery Company reports the following information for 2010: Actual: Standard: Refer to Ben's Delivery Company.What is the variable overhead flexible budget for March 2010?

Fundamental Concepts

Measuring Product Costs

Activity-Based Management

Strategic Management of Costs,quality,and Time

Cost Drivers and Cost Behavior

Financial Modeling for Short-Term Decision Making

Differential Cost Analysis for Operating Decisions

Capital Expenditure Decisions

Profit Planning and Budgeting

Investment Center Performance Evaluation

Incentive Issues

Allocating Costs to Responsibility Centers

Filters

Exam 10: Profit and Cost Center Performance Evaluation

Why do fixed manufacturing cost variances occur?

Activity-based costing is commonly used with standard costing.Using activity-based costing,a company has

ABC Company ABC Company reports the following information for the most recent period when 2,750 units were produced. Refer to ABC Company.Calculate the total direct labor variance.

Most companies report which of the following variances?

Ben's Delivery Company Ben's Delivery Company reports the following information for 2010: Actual: Standard: Refer to Ben's Delivery Company.What is the variable overhead variance for fuel costs?

To help managers in their efforts to control overhead costs,managers and accountants analyze overhead variances using the variable cost variance model by separating variable overhead variances into

Ben's Delivery Company Ben's Delivery Company reports the following information for 2010: Actual: Standard: Refer to Ben's Delivery Company.What is the actual fuel cost for March 2010?

KF Company KF Company uses standard costing.The company reported the following information for the current period: Refer to KF Company.Calculate the variable overhead efficiency variance.

For financial reporting purposes,how are fixed manufacturing costs treated?

Solving for labor hours.Bill's Engineering Consulting reports the following direct labor information for clerical staff: Required: What are the actual hours worked,rounded to the nearest hour? (Bill's Engineering Consulting;solving for labor hours. )

How are fixed manufacturing costs treated for managerial and external reporting purposes?

Overhead variances.Trevor,Inc. ,uses standard costing.The company reported the following overhead information for the current period: Required: Calculate the variable and fixed overhead variances. (Trevor Inc. ;overhead variances. )

Which statement is true concerning the fixed overhead production efficiency variance?

Ben's Delivery Company Ben's Delivery Company reports the following information for 2010: Actual: Standard: Refer to Ben's Delivery Company.What is the variable overhead flexible budget for March 2010?

Fundamental Concepts

Measuring Product Costs

Activity-Based Management

Strategic Management of Costs,quality,and Time

Cost Drivers and Cost Behavior

Financial Modeling for Short-Term Decision Making

Differential Cost Analysis for Operating Decisions

Capital Expenditure Decisions

Profit Planning and Budgeting

Investment Center Performance Evaluation

Incentive Issues

Allocating Costs to Responsibility Centers

Filters