Question 1

The standard quantity of materials allowed is computed by the equation

Accepted Answer

A) unit quantity standard ´ standard output. 
B) unit quantity standard ´ actual input. 
C) unit quantity standard ´ standard input. 
D) unit quantity standard ´ actual output. 
E) not shown here. 
A) unit quantity standard ´ standard output. 
B) unit quantity standard ´ actual input. 
C) unit quantity standard ´ standard input. 
D) unit quantity standard ´ actual output. 
E) not shown here.

Question 2

Which of the following is not true regarding the use of materials variance information?

Accepted Answer

A) The purchasing agent has the responsibility for controlling the materials price variance. 
B) The production manager is generally responsible for materials usage. 
C) The production manager is concerned with minimizing scrap,waste,and rework. 
D) The purchasing department is responsible for acquiring quality materials. 
E) All of these are true. 
A) The purchasing agent has the responsibility for controlling the materials price variance. 
B) The production manager is generally responsible for materials usage. 
C) The production manager is concerned with minimizing scrap,waste,and rework. 
D) The purchasing department is responsible for acquiring quality materials. 
E) All of these are true.

Question 3

___________________ is calculated by multiplying the unit labor standard by the actual output.

Accepted Answer

Standard h

Question 4

Which of the following is not true regarding normal costing systems?

Accepted Answer

A) A normal costing system predetermines overhead costs. 
B) A normal costing system assigns direct materials and direct labor to products using a predetermined rate. 
C) In a normal costing system overhead is assigned using a budgeted rate and actual activity. 
D) A normal costing system has less capacity for control than a standard costing system. 
E) All of these statements are true. 
A) A normal costing system predetermines overhead costs. 
B) A normal costing system assigns direct materials and direct labor to products using a predetermined rate. 
C) In a normal costing system overhead is assigned using a budgeted rate and actual activity. 
D) A normal costing system has less capacity for control than a standard costing system. 
E) All of these statements are true.

Question 5

A kaizen standard reflects the realized improvements for the past periods and a search for more improvements for the future.

Accepted Answer

A) True 
 B)False

Question 6

During the month of March,Baker's Express purchased 10,000 pounds of flour at $1 per pound.At the end of March,Baker's Express found that it had a favorable materials price variance of $500.The standard cost per pound must be

Accepted Answer

A) $0.95 
B) $1.00 
C) $1.05 
D) $1.95 
A) $0.95 
B) $1.00 
C) $1.05 
D) $1.95

Question 7

In a ____________________,costs are assigned to products using quantity and price standards for all three manufacturing costs: direct materials,direct labor,and overhead.

Accepted Answer

standard c

Question 8

Which of the following is not true concerning direct materials variances?

Accepted Answer

A) The sum of the price and usage variances will add up to the total materials variance only if the materials purchased is equal to the materials used. 
B) The materials price variance uses the actual quantity of materials purchased rather than the actual quantity of materials used. 
C) The materials price variance always uses the actual quantity of materials used rather than the actual quantity of materials purchased. 
D) The materials usage variance uses the actual quantity of materials used. 
E) Separate materials variances can be computed for each type of material used. 
A) The sum of the price and usage variances will add up to the total materials variance only if the materials purchased is equal to the materials used. 
B) The materials price variance uses the actual quantity of materials purchased rather than the actual quantity of materials used. 
C) The materials price variance always uses the actual quantity of materials used rather than the actual quantity of materials purchased. 
D) The materials usage variance uses the actual quantity of materials used. 
E) Separate materials variances can be computed for each type of material used.

Question 9

Acme Company's standard cost is $500,000.The allowable deviation is $\pm$10%.Its actual costs for three months are   The upper and lower control limits are,respectively,

Accepted Answer

A) $550,000 and $450,000 
B) $500,000 and $450,000 
C) $550,000 and $500,000 
D) $575,000 and $520,000 
A) $550,000 and $450,000 
B) $500,000 and $450,000 
C) $550,000 and $500,000 
D) $575,000 and $520,000

Question 10

The unit standard quantity of inputs is vital to the computation of total amount of inputs allowed for the actual output and efficiency variances.

Accepted Answer

A) True 
 B)False

Question 11

The usage variance is the difference between the actual and standard quantity of inputs

Accepted Answer

A) multiplied by the standard unit price of the input. 
B) budgeted multiplied by the standard unit price of the input. 
C) multiplied by the actual unit price of the input. 
D) purchased multiplied by the actual unit price of the input. 
E) none of these. 
A) multiplied by the standard unit price of the input. 
B) budgeted multiplied by the standard unit price of the input. 
C) multiplied by the actual unit price of the input. 
D) purchased multiplied by the actual unit price of the input. 
E) none of these.

Question 12

________________ demands maximum efficiency and can be achieved only if everything operates perfectly.

Accepted Answer

The answer of ________________ demands maximum efficiency and can be...

Question 13

Dog's Best Friend manufactures dog food.During the month,it manufactured 3,000 bags of kibble,using 0.25 hour of direct labor per bag at a rate of $9.00 per hour.The materials and labor standards for manufacturing the bags of kibble are:
   The company actually used 3,300 pounds of beef at a price of $1.10 per pound.It also purchased 3,000 bags at a price of $0.15 per bag.

Accepted Answer

The answer of Dog's Best Friend manufactures dog food.During the...

Question 14

Top Notch Music Inc.produces car stereos.During the year Top Notch Music produced 7,000 stereos.Materials and labor standards for producing these units are as follows:

Accepted Answer

The answer of Top Notch Music Inc.produces car stereos.During the...

Question 15

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

Accepted Answer

materials

Question 16

During June,Cisco Company produced 15,000 chainsaw blades.The standard quantity of material allowed per unit was 1.5 pounds of steel per blade at a standard cost of $5 per pound.The actual purchase price was $6.25 per pound.Cisco determined that it had a favorable materials usage variance of $2,500 for June.What is the journal entry to record the issuance and usage of materials?

Accepted Answer

A) Work in Process 112,500 Materials Usage Variance 2,500
Materials 110,000 
B) Work in Process 110,000 Materials Usage Variance 2,500
Materials 112,000 
C) Work in Process 112,500 Materials Usage Variance 2,500
Materials 115,000 
D) Work in Process 140,625 Materials Usage Variance 2,500
Materials 138,125 
A) Work in Process 112,500 Materials Usage Variance 2,500
Materials 110,000 
B) Work in Process 110,000 Materials Usage Variance 2,500
Materials 112,000 
C) Work in Process 112,500 Materials Usage Variance 2,500
Materials 115,000 
D) Work in Process 140,625 Materials Usage Variance 2,500
Materials 138,125

Question 17

Figure 10-9. 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.
Refer to Figure 10-9.What is the entry to close the variances of labor and materials?

Accepted Answer

A) Materials Price Variance 700,000 Materials Usage Variance 300,000
Labor Efficiency Variance 800,000
Cost of Goods Sold 1,800,000
Cost of Goods Sold 250,000
Labor Rate Variance 250,000 
B) Materials Price Variance 750,000 Materials Usage Variance 250,000
Labor Efficiency Variance 850,000
Cost of Goods Sold 1,850,000
Cost of Goods Sold 300,000
Labor Rate Variance 300,000 
C) Cost of Goods Sold 1,800,000 Materials Price Variance 700,000
Materials Usage Variance 300,000
Labor Efficiency Variance 800,000
Labor Rate Variance 250,000
Cost of Goods Sold 250,000 
D) Cost of Goods Sold 1,850,000 Materials Price Variance 750,000
Materials Usage Variance 250,000
Labor Efficiency Variance 850,000
Labor Rate Variance 300,000
Cost of Goods Sold 300,000 
A) Materials Price Variance 700,000 Materials Usage Variance 300,000
Labor Efficiency Variance 800,000
Cost of Goods Sold 1,800,000
Cost of Goods Sold 250,000
Labor Rate Variance 250,000 
B) Materials Price Variance 750,000 Materials Usage Variance 250,000
Labor Efficiency Variance 850,000
Cost of Goods Sold 1,850,000
Cost of Goods Sold 300,000
Labor Rate Variance 300,000 
C) Cost of Goods Sold 1,800,000 Materials Price Variance 700,000
Materials Usage Variance 300,000
Labor Efficiency Variance 800,000
Labor Rate Variance 250,000
Cost of Goods Sold 250,000 
D) Cost of Goods Sold 1,850,000 Materials Price Variance 750,000
Materials Usage Variance 250,000
Labor Efficiency Variance 850,000
Labor Rate Variance 300,000
Cost of Goods Sold 300,000

Question 18

During June,Cisco Company produced 12,000 chainsaw blades.The standard quantity of material allowed per unit was 1.5 pounds of steel per blade at a standard cost of $8 per pound.The actual cost was $7 per pound.The actual pounds of steel that Cisco purchased were 19,500 pounds.All materials purchased were used.Calculate Cisco's materials usage variance.

Accepted Answer

A) $10,500 U 
B) $12,000 F 
C) $12,000 U 
D) $10,500 F 
A) $10,500 U 
B) $12,000 F 
C) $12,000 U 
D) $10,500 F

Question 19

In setting price standards for materials and labor,

Accepted Answer

A) the purchasing department must consider discounts,freight,and quality. 
B) personnel must consider payroll taxes,fringe benefits,and qualifications. 
C) it is the joint responsibility of operations,purchasing,personnel,and accounting. 
D) All of these. 
E) None of these. 
A) the purchasing department must consider discounts,freight,and quality. 
B) personnel must consider payroll taxes,fringe benefits,and qualifications. 
C) it is the joint responsibility of operations,purchasing,personnel,and accounting. 
D) All of these. 
E) None of these.

Question 20

Figure 10-6. Extreme Builders constructs houses.The standard labor rate is $25 per hour and the standard number of hours is 15,000 hours per home.During the year,it constructed 12 homes using 18,000 labor hours per home and a rate of $28 per hour.
Refer to Figure 10-6.Calculate the labor efficiency variance.

Accepted Answer

A) $1,008,000 F 
B) $900,000 U 
C) $1,008,000 U 
D) $900,000 F 
A) $1,008,000 F 
B) $900,000 U 
C) $1,008,000 U 
D) $900,000 F

The standard quantity of materials allowed is computed by the equation

Which of the following is not true regarding the use of materials variance information?

___________________ is calculated by multiplying the unit labor standard by the actual output.

Which of the following is not true regarding normal costing systems?

A kaizen standard reflects the realized improvements for the past periods and a search for more improvements for the future.

During the month of March,Baker's Express purchased 10,000 pounds of flour at $1 per pound.At the end of March,Baker's Express found that it had a favorable materials price variance of $500.The standard cost per pound must be

In a ____________________,costs are assigned to products using quantity and price standards for all three manufacturing costs: direct materials,direct labor,and overhead.

Which of the following is not true concerning direct materials variances?

The unit standard quantity of inputs is vital to the computation of total amount of inputs allowed for the actual output and efficiency variances.

The usage variance is the difference between the actual and standard quantity of inputs

________________ demands maximum efficiency and can be achieved only if everything operates perfectly.

Top Notch Music Inc.produces car stereos.During the year Top Notch Music produced 7,000 stereos.Materials and labor standards for producing these units are as follows:

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

In setting price standards for materials and labor,

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Profit Planning

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

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Exam 10: Standard Costing: a Managerial Control Tool

The standard quantity of materials allowed is computed by the equation

Which of the following is not true regarding the use of materials variance information?

___________________ is calculated by multiplying the unit labor standard by the actual output.

Which of the following is not true regarding normal costing systems?

A kaizen standard reflects the realized improvements for the past periods and a search for more improvements for the future.

During the month of March,Baker's Express purchased 10,000 pounds of flour at $1 per pound.At the end of March,Baker's Express found that it had a favorable materials price variance of $500.The standard cost per pound must be

In a ____________________,costs are assigned to products using quantity and price standards for all three manufacturing costs: direct materials,direct labor,and overhead.

Which of the following is not true concerning direct materials variances?

Acme Company's standard cost is $500,000.The allowable deviation is ±\pm± 10%.Its actual costs for three months are The upper and lower control limits are,respectively,

The unit standard quantity of inputs is vital to the computation of total amount of inputs allowed for the actual output and efficiency variances.

The usage variance is the difference between the actual and standard quantity of inputs

________________ demands maximum efficiency and can be achieved only if everything operates perfectly.

Top Notch Music Inc.produces car stereos.During the year Top Notch Music produced 7,000 stereos.Materials and labor standards for producing these units are as follows:

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

In setting price standards for materials and labor,

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Profit Planning

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters