Question 1

A fixed overhead volume variance is a noncontrollable variance.

Accepted Answer

A) True 
 B)False

Question 2

Fleetwood Company Fleetwood Company uses a standard cost system for its production process and applies overhead based on direct labor hours.The following information is available for May when Fleetwood produced 4,500 units:
$\begin{array}{ll}\text { Standard: }\
\text { DLH per unit } & 2.50 \
\text { Variable overhead per DLH } & \$ 1.75 \
\text { Fixed overhead per DLH } & \$ 3.10 \
\text { Budgeted variable overhead } & \$ 21,875 \
\text { Budgeted fixed overhead } & \$ 38,750\\\text { Actual: }\
\text {Direct labor hours }&10,000\
\text { Variable overhead}&\$26,250\
\text { Fixed overhead}&\$38,000\
\end{array}$ Refer to Fleetwood Company.Using the three-variance approach,what is the spending variance?

Accepted Answer

A) $ 4,375.00 U 
B) $ 3,625.00 F 
C) $ 8,000.00 U 
D) $15,750.00 U 
A) $ 4,375.00 U 
B) $ 3,625.00 F 
C) $ 8,000.00 U 
D) $15,750.00 U

Question 3

At the end of a period,a significant material quantity variance should be

Accepted Answer

A) closed to Cost of Goods Sold. 
B) allocated among Raw Material,Work in Process,Finished Goods,and Cost of Goods Sold. 
C) allocated among Work in Process,Finished Goods,and Cost of Goods Sold. 
D) carried forward as a balance sheet account to the next period. 
A) closed to Cost of Goods Sold. 
B) allocated among Raw Material,Work in Process,Finished Goods,and Cost of Goods Sold. 
C) allocated among Work in Process,Finished Goods,and Cost of Goods Sold. 
D) carried forward as a balance sheet account to the next period.

Question 4

The sum of the material price variance (calculated at point of purchase)and material quantity variance equals

Accepted Answer

A) the total cost variance. 
B) the material mix variance. 
C) the material yield variance. 
D) no meaningful number. 
A) the total cost variance. 
B) the material mix variance. 
C) the material yield variance. 
D) no meaningful number.

Question 5

A large labor efficiency variance is prorated to which of the following at year-end? $\begin{array}{lll}
&\text{WIP}&\text{FG}\
\underline{\text{Cost of GoodsSold}}&\underline{\text{Inventory}}&\underline{\text{Inventory}}
\end{array}$

Accepted Answer

A) no no no 
B) no yes yes 
C) yes no no 
D) yes yes yes 
A) no no no 
B) no yes yes 
C) yes no no 
D) yes yes yes

Question 6

Fleetwood Company Fleetwood Company uses a standard cost system for its production process and applies overhead based on direct labor hours.The following information is available for May when Fleetwood produced 4,500 units:
$\begin{array}{ll}\text { Standard: }\
\text { DLH per unit } & 2.50 \
\text { Variable overhead per DLH } & \$ 1.75 \
\text { Fixed overhead per DLH } & \$ 3.10 \
\text { Budgeted variable overhead } & \$ 21,875 \
\text { Budgeted fixed overhead } & \$ 38,750\\\text { Actual: }\
\text {Direct labor hours }&10,000\
\text { Variable overhead}&\$26,250\
\text { Fixed overhead}&\$38,000\
\end{array}$ Refer to Fleetwood Company.Using the four-variance approach,what is the fixed overhead spending variance?

Accepted Answer

A) $7,000.00 U 
B) $3,125.00 F 
C) $ 750.00 U 
D) $ 750.00 F 
A) $7,000.00 U 
B) $3,125.00 F 
C) $ 750.00 U 
D) $ 750.00 F

Question 7

An overhead efficiency variance is related entirely to variable overhead.

Accepted Answer

A) True 
 B)False

Question 8

Reichs Company The following information is for Reichs Company's September production:
$\begin{array}{ll}
\textbf { Standard: }\
\text { Material } & 4.0 \text { feet per unit } @ \$ 3.75 \text { per foot } \
\text { Labor } & 3.0 \text { hours per unit } @ \$ 8.25 \text { per hour }
\end{array}$

$\begin{array}{ll}
\textbf { Actual: }\
\text { Production } & 3,500 \text { units produced during the month } \
\text { Material } & 14,200 \text { feet used; } 14,700 \text { feet purchased @ } \$ 3.70\text { per foot } \
\text { Labor } & 10,400 \text { direct labor hours } \$ 8.35\text { per hour }
\end{array}$ (Round all answers to the nearest dollar.)
Refer to Reichs Company.What is the labor rate variance?

Accepted Answer

A) $1,040 U 
B) $1,040 F 
C) $1,420 U 
D) $1,420 F 
A) $1,040 U 
B) $1,040 F 
C) $1,420 U 
D) $1,420 F

Question 9

In a standard cost system,when production is greater than the estimated unit or denominator level of activity,there will be a(n)

Accepted Answer

A) unfavorable capacity variance. 
B) favorable material and labor usage variance. 
C) favorable volume variance. 
D) unfavorable manufacturing overhead variance. 
A) unfavorable capacity variance. 
B) favorable material and labor usage variance. 
C) favorable volume variance. 
D) unfavorable manufacturing overhead variance.

Question 10

The difference between actual and budgeted fixed factory overhead is referred to as a fixed overhead spending variance.

Accepted Answer

A) True 
 B)False

Question 11

In a totally automated organization,using theoretical capacity will generally provide the highest fixed overhead application rate.

Accepted Answer

A) True 
 B)False

Question 12

The difference between budgeted and applied fixed factory overhead is referred to as a fixed overhead volume variance.

Accepted Answer

A) True 
 B)False

Question 13

An unfavorable fixed overhead volume variance is most often caused by

Accepted Answer

A) actual fixed overhead incurred exceeding budgeted fixed overhead. 
B) an over-application of fixed overhead to production. 
C) an increase in the level of the finished inventory. 
D) normal capacity exceeding actual production levels. 
A) actual fixed overhead incurred exceeding budgeted fixed overhead. 
B) an over-application of fixed overhead to production. 
C) an increase in the level of the finished inventory. 
D) normal capacity exceeding actual production levels.

Question 14

The variance least significant for purposes of controlling costs is the

Accepted Answer

A) material quantity variance. 
B) variable overhead efficiency variance. 
C) fixed overhead spending variance. 
D) fixed overhead volume variance. 
A) material quantity variance. 
B) variable overhead efficiency variance. 
C) fixed overhead spending variance. 
D) fixed overhead volume variance.

Question 15

Hazelton Company Hazelton Company has the following information available for December when 3,500 units were produced (round answers to the nearest dollar).
  Refer to Hazelton Company.What is the labor efficiency variance?

Accepted Answer

A) $2,050 F 
B) $2,050 U 
C) $2,040 U 
D) $2,040 F 
A) $2,050 F 
B) $2,050 U 
C) $2,040 U 
D) $2,040 F

Question 16

Fleetwood Company Fleetwood Company uses a standard cost system for its production process and applies overhead based on direct labor hours.The following information is available for May when Fleetwood produced 4,500 units:
$\begin{array}{ll}\text { Standard: }\
\text { DLH per unit } & 2.50 \
\text { Variable overhead per DLH } & \$ 1.75 \
\text { Fixed overhead per DLH } & \$ 3.10 \
\text { Budgeted variable overhead } & \$ 21,875 \
\text { Budgeted fixed overhead } & \$ 38,750\\\text { Actual: }\
\text {Direct labor hours }&10,000\
\text { Variable overhead}&\$26,250\
\text { Fixed overhead}&\$38,000\
\end{array}$ Refer to Fleetwood Company.Using the two-variance approach,what is the noncontrollable variance?

Accepted Answer

A) $3,125.00 F 
B) $3,875.00 U 
C) $3,875.00 F 
D) $6,062.50 U 
A) $3,125.00 F 
B) $3,875.00 U 
C) $3,875.00 F 
D) $6,062.50 U

Question 17

The efficiency variance computed on a three-variance approach is

Accepted Answer

A) equal to the efficiency variance computed on the four-variance approach. 
B) equal to the variable overhead spending variance plus the efficiency variance computed on the four-variance approach. 
C) computed as the difference between applied variable overhead and actual variable overhead. 
D) computed as actual variable overhead minus the flexible budget for variable overhead based on actual hours worked. 
A) equal to the efficiency variance computed on the four-variance approach. 
B) equal to the variable overhead spending variance plus the efficiency variance computed on the four-variance approach. 
C) computed as the difference between applied variable overhead and actual variable overhead. 
D) computed as actual variable overhead minus the flexible budget for variable overhead based on actual hours worked.

Question 18

Standards that allow for waste and inefficiency are referred to as ______________________________.

Accepted Answer

The answer of Standards that allow for waste and inefficiency...

Question 19

A company may set predetermined overhead rates based on normal,expected annual,or theoretical capacity.At the end of a period,the fixed overhead spending variance would

Accepted Answer

A) be the same regardless of the capacity level selected. 
B) be the largest if theoretical capacity had been selected. 
C) be the smallest if theoretical capacity had been selected. 
D) not occur if actual capacity were the same as the capacity level selected. 
A) be the same regardless of the capacity level selected. 
B) be the largest if theoretical capacity had been selected. 
C) be the smallest if theoretical capacity had been selected. 
D) not occur if actual capacity were the same as the capacity level selected.

Question 20

When multiple labor categories are used,the financial effect of using a different mix of workers in a production process is referred to as a _________________________ variance.

Accepted Answer

The answer of When multiple labor categories are used,the financial...

A fixed overhead volume variance is a noncontrollable variance.

At the end of a period,a significant material quantity variance should be

The sum of the material price variance (calculated at point of purchase)and material quantity variance equals

A large labor efficiency variance is prorated to which of the following at year-end? WIP FG

An overhead efficiency variance is related entirely to variable overhead.

In a standard cost system,when production is greater than the estimated unit or denominator level of activity,there will be a(n)

The difference between actual and budgeted fixed factory overhead is referred to as a fixed overhead spending variance.

In a totally automated organization,using theoretical capacity will generally provide the highest fixed overhead application rate.

The difference between budgeted and applied fixed factory overhead is referred to as a fixed overhead volume variance.

An unfavorable fixed overhead volume variance is most often caused by

The variance least significant for purposes of controlling costs is the

Hazelton Company Hazelton Company has the following information available for December when 3,500 units were produced (round answers to the nearest dollar). Refer to Hazelton Company.What is the labor efficiency variance?

The efficiency variance computed on a three-variance approach is

Standards that allow for waste and inefficiency are referred to as ______________________________.

A company may set predetermined overhead rates based on normal,expected annual,or theoretical capacity.At the end of a period,the fixed overhead spending variance would

When multiple labor categories are used,the financial effect of using a different mix of workers in a production process is referred to as a _________________________ variance.

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting, support Department Allocations, and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters

Exam 7: Standard Costing and Variance Analysis

A fixed overhead volume variance is a noncontrollable variance.

At the end of a period,a significant material quantity variance should be

The sum of the material price variance (calculated at point of purchase)and material quantity variance equals

A large labor efficiency variance is prorated to which of the following at year-end? WIP FG

An overhead efficiency variance is related entirely to variable overhead.

In a standard cost system,when production is greater than the estimated unit or denominator level of activity,there will be a(n)

The difference between actual and budgeted fixed factory overhead is referred to as a fixed overhead spending variance.

In a totally automated organization,using theoretical capacity will generally provide the highest fixed overhead application rate.

The difference between budgeted and applied fixed factory overhead is referred to as a fixed overhead volume variance.

An unfavorable fixed overhead volume variance is most often caused by

The variance least significant for purposes of controlling costs is the

Hazelton Company Hazelton Company has the following information available for December when 3,500 units were produced (round answers to the nearest dollar). Refer to Hazelton Company.What is the labor efficiency variance?

The efficiency variance computed on a three-variance approach is

Standards that allow for waste and inefficiency are referred to as ______________________________.

A company may set predetermined overhead rates based on normal,expected annual,or theoretical capacity.At the end of a period,the fixed overhead spending variance would

When multiple labor categories are used,the financial effect of using a different mix of workers in a production process is referred to as a _________________________ variance.

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting, support Department Allocations, and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters