Exam 24: Standard Cost Systems

External auditors are often called upon to evaluate cost variances.

A material quantity variance is the standard price times standard quantity, less actual quantity.

The journal entry to record the cost of direct labor used in this period includes:

The materials price variance for Maple Company for June is:

Dawson Company has a union contract which calls for an 8% cost of living increase in the wages paid to all factory workers as of July 1 of the current year. This suggests that:

The overhead spending variance for the month in question was:

The presence of fixed costs in manufacturing overhead causes the actual amount of manufacturing overhead per unit of output to vary, depending on the actual production volume attained.

The cost-volume relationship used to prepare the flexible budget for this department includes:

The use of inexpensive, low quality, materials often results in:

Modern Art, Inc., produces handpainted mouse pads. The following budgeted and actual results are for a recent month in which actual production was equal to budgeted production: Which of the following is true? (There may be more than one response.)