Question 1

Candy Stores Inc.gives you the following information: The standard material cost is $7 per pound for a 15 pound bag of chocolate.The following is the actual cost and usage data:
 Using the above information provided for Candy Stores.
-Compute the direct materials quantity variance for Candy Stores.

Accepted Answer

A) $42,000 (F) 
B) $42,000 (U) 
C) $186,000 (F) 
D) $186,000 (U)

Question 2

The direct materials standards for the main product of Duchess Company are 8 grams of direct materials per product at a cost of $3 per gram.During April,969 grams of direct materials were used to produce 120 products at a direct materials cost of $2,900.The direct materials quantity variance for April was

Accepted Answer

A) $57 (U). 
B) $77 (U). 
C) $27 (U). 
D) $97 (F).

Question 3

Which of the following is a drawback of using standard costing system?

Accepted Answer

A) It can be expensive and time-consuming to implement. 
B) It distorts actual cost information. 
C) It is often inaccurate. 
D) It is applicable only to manufacturing businesses,not service businesses.

Question 4

Which of the following is indicated by a favorable fixed overhead volume variance of a manufacturing company?

Accepted Answer

A) The creation of excess inventory 
B) The actual overhead exceeded the budgeted overhead 
C) Sales exceeded production 
D) Variable overhead costs were less than fixed overhead costs

Question 5

The total overhead cost variance is equal to the difference between

Accepted Answer

A) fixed overhead costs and variable overhead costs. 
B) estimated overhead rate and applied overhead rate. 
C) actual overhead costs and variable overhead costs. 
D) actual overhead costs and standard overhead costs.

Question 6

The direct materials price standard is a carefully derived estimate of what a particular type of direct material will cost when purchased during the next accounting period.

Accepted Answer

A) True 
 B)False

Question 7

"The difference between actual hours worked and standard hours allowed for the good units produced,multiplied by the standard labor rate" is a description of the

Accepted Answer

A) direct labor rate variance. 
B) direct labor efficiency variance. 
C) total direct labor cost variance. 
D) direct labor quantity variance.

Question 8

Underfoot Products uses standard costing.The following information about overhead was generated during May:  
-Using the above information provided for Underfoot Products,compute the variable overhead variance.

Accepted Answer

A) $42,000 (F) 
B) $42,000 (U) 
C) $30,000 (U) 
D) $32,000 (F)

Question 9

The total variable overhead variance is comprised of the

Accepted Answer

A) variable overhead efficiency and fixed variances. 
B) fixed overhead budget and volume variances. 
C) variable overhead spending and efficiency variances. 
D) labor efficiency and rate variances.

Question 10

If the actual amount of direct materials used equals the standard amount of direct materials that should have been used,the difference between the standard cost and actual cost of direct materials is called the

Accepted Answer

A) price variance. 
B) rate variance. 
C) quantity variance. 
D) efficiency variance.

Question 11

The standard fixed overhead rate is usually based on the expected number of standard labor hours.

Accepted Answer

A) True 
 B)False

Question 12

Golf Pro Inc.makes wood drivers for the professional golfer.Because of the clientele of users,only the finest materials can be used,and the quality of craftsmanship must be high.The following cost,quantity,and time standards have been set for 2014:
Direct materials: 2 board-feet of wood @ $20 per board-foot and 2 feet of leather strip @ $5 per foot
Direct labor: Cutting Department,0.6 hour per driver at $10 per hour;Shaping/Finishing Department,1.4 hours per driver at $15 per hour
Overhead: variable,$5 per direct labor hour;fixed,$8 per direct labor hour
The wood is added at the beginning of the cutting process and the leather strip at the beginning of the shaping/finishing process.
Compute the standard cost per driver.

Accepted Answer

The answer of Golf Pro Inc.makes wood drivers for the...

Question 13

Underfoot Products uses standard costing.The following information about overhead was generated during May:  
-Using the above information provided for Underfoot Products,compute the fixed overhead volume variance.

Accepted Answer

A) $5,000 (U) 
B) $10,000 (U) 
C) $10,000 (F) 
D) $15,000 (F)

Question 14

A purpose of standard costing is to

Accepted Answer

A) control costs. 
B) allocate costs more accurately. 
C) replace subjective decision making. 
D) compute the breakeven point.

Question 15

Good Sleep Inc.manufactures soft pillows.Its records revealed the following data:  
-Using the above information provided for Good Sleep,the total overhead cost variance is

Accepted Answer

A) $4,000 (F). 
B) $5,000 (U). 
C) $4,500 (U). 
D) $500 (F).

Question 16

Standard costing can be used only with a process costing system.

Accepted Answer

A) True 
 B)False

Question 17

Flexible budgets are also called static budgets.

Accepted Answer

A) True 
 B)False

Question 18

Candy Stores Inc.gives you the following information: The standard material cost is $7 per pound for a 15 pound bag of chocolate.The following is the actual cost and usage data:
 Using the above information provided for Candy Stores.
-Compute the direct materials variance for Candy Stores.

Accepted Answer

A) $186,000 (U) 
B) $144,000 (F) 
C) $186,000 (F) 
D) $42,000 (U)

Question 19

A variance is the difference between standard costs and actual costs.

Accepted Answer

A) True 
 B)False

Question 20

The responsibility of a production manager is limited to direct materials used.

Accepted Answer

A) True 
 B)False

Exam 22: Standard Costing and Variance Analysis

Candy Stores Inc.gives you the following information: The standard material cost is $7 per pound for a 15 pound bag of chocolate.The following is the actual cost and usage data: Using the above information provided for Candy Stores. -Compute the direct materials quantity variance for Candy Stores.

Which of the following is a drawback of using standard costing system?

Which of the following is indicated by a favorable fixed overhead volume variance of a manufacturing company?

The total overhead cost variance is equal to the difference between

The direct materials price standard is a carefully derived estimate of what a particular type of direct material will cost when purchased during the next accounting period.

"The difference between actual hours worked and standard hours allowed for the good units produced,multiplied by the standard labor rate" is a description of the

Underfoot Products uses standard costing.The following information about overhead was generated during May: -Using the above information provided for Underfoot Products,compute the variable overhead variance.

The total variable overhead variance is comprised of the

If the actual amount of direct materials used equals the standard amount of direct materials that should have been used,the difference between the standard cost and actual cost of direct materials is called the

The standard fixed overhead rate is usually based on the expected number of standard labor hours.

Underfoot Products uses standard costing.The following information about overhead was generated during May: -Using the above information provided for Underfoot Products,compute the fixed overhead volume variance.

A purpose of standard costing is to

Good Sleep Inc.manufactures soft pillows.Its records revealed the following data: -Using the above information provided for Good Sleep,the total overhead cost variance is

Standard costing can be used only with a process costing system.

Flexible budgets are also called static budgets.

Candy Stores Inc.gives you the following information: The standard material cost is $7 per pound for a 15 pound bag of chocolate.The following is the actual cost and usage data: Using the above information provided for Candy Stores. -Compute the direct materials variance for Candy Stores.

A variance is the difference between standard costs and actual costs.

The responsibility of a production manager is limited to direct materials used.