Question 1

The effect of substituting a non-standard mix of materials during the production process is referred to as a material yield variance.

Accepted Answer

A) True 
 B)False

Question 2

When multiple labor categories are used,the monetary impact of using a higher or lower number of hours than a standard allows is referred to as a labor mix variance.

Accepted Answer

A) True 
 B)False

Question 3

Classic Cleaning Company Classic Cleaning Company manufactures a cleaning solvent.The company employs both skilled and unskilled workers.To produce one 55-gallon drum of solvent requires Materials A and B as well as skilled labor and unskilled labor.The standard and actual material and labor information is presented below:
Standard:
Material A: 30.25 gallons @ $1.25 per gallon
Material B: 24.75 gallons @ $2.00 per gallon
Skilled Labor: 4 hours @ $12 per hour
Unskilled Labor: 2 hours @ $ 7 per hour
Actual:
Material A: 10,716 gallons purchased and used @ $1.50 per gallon
Material B: 17,484 gallons purchased and used @ $1.90 per gallon
Skilled labor hours: 1,950 @ $11.90 per hour
Unskilled labor hours: 1,300 @ $7.15 per hour
During the current month Classic Cleaning Company manufactured 500 55-gallon drums.
Round all answers to the nearest whole dollar.
Refer to Classic Cleaning Company.What is the total material mix variance?

Accepted Answer

A) $3,596 F 
B) $3,596 U 
C) $4,864 F 
D) $4,864 U 
A) $3,596 F 
B) $3,596 U 
C) $4,864 F 
D) $4,864 U

Question 4

Crichton Company The following information is for Crichton Company's July production:
$\begin{array}{ll}
\textbf { Standard: }\
\text { Material } & 3.0 \text { feet per unit } @ \$ 4.20 \text { per foot } \
\text { Labor } & 2.5 \text { hours per unit } @ \$ 7.50 \text { per hour }
\end{array}$

$\begin{array}{ll}
\textbf { Actual: }\
\text { Production } & 2,750 \text { units produced during the month } \
\text { Material } & 8,700 \text { feet used; } 9,000 \text { feet purchased @ } \$ 4.50 \text { per foot } \
\text { Labor } & 7,000 \text { direct labor hours } \$ 7.90 \text { per hour }
\end{array}$ (Round all answers to the nearest dollar.)
Refer to Crichton Company.What is the labor rate variance?

Accepted Answer

A) $3,480 U 
B) $3,480 F 
C) $2,800 U 
D) $2,800 F 
A) $3,480 U 
B) $3,480 F 
C) $2,800 U 
D) $2,800 F

Question 5

A total variance is best defined as the difference between total

Accepted Answer

A) actual cost and total cost applied for the standard output of the period. 
B) standard cost and total cost applied to production. 
C) actual cost and total standard cost of the actual input of the period. 
D) actual cost and total cost applied for the actual output of the period. 
A) actual cost and total cost applied for the standard output of the period. 
B) standard cost and total cost applied to production. 
C) actual cost and total standard cost of the actual input of the period. 
D) actual cost and total cost applied for the actual output of the period.

Question 6

Genesis Company Genesis Company uses a standard cost system for its production process and applies overhead based on direct labor hours.The following information is available for September when Genesis produced 5,000 units:
$\begin{array}{ll}\text { Standard: }\
\text { DLH per unit } & 3.00\
\text { Variable overhead per DLH } & \$ 1.80 \
\text { Fixed overhead per DLH } & \$ 3.25 \
\text { Budgeted variable overhead } & \$ 27,250\
\text { Budgeted fixed overhead } & \$ 49,500\\\text { Actual: }\
\text {Direct labor hours }&16,000\
\text { Variable overhead}&\$31,325\
\text { Fixed overhead}&\$49,750\
\end{array}$ Refer to Genesis Company.Using the four-variance approach,what is the fixed overhead spending variance?

Accepted Answer

A) $ 250 U 
B) $ 250 F 
C) $1,000 U 
D) $2,250 F 
A) $ 250 U 
B) $ 250 F 
C) $1,000 U 
D) $2,250 F

Question 7

Sherman Corporation operates a factory.One of its departments has three kinds of employees on its direct labor payroll,classified as pay grades A,B,and
C.The employees work in 10-person crews in the following proportions:
   The work crews cannot work short-handed.To keep a unit operating when one of the regular crew members is absent,the head of the department first tries to reassign one of the department's other workers from indirect labor operations.
If no one in the department is able to step in,plant management will pull maintenance department workers off their regular work,if possible,and assign them temporarily to the department.These maintenance workers are all classified as Grade D employees,with a standard wage rate of $10 an hour.
The following data relate to the operations of the department during the month of May:
   Required: Compute labor rate,mix,and yield variances.

Accepted Answer

The answer of Sherman Corporation operates a factory.One of its...

Question 8

Explain the source of variable overhead spending and efficiency variances and how these variances are computed.

Accepted Answer

The variable overhead spending variance

Question 9

Hoover Company
Hoover Company applies overhead based on direct labor hours and has the following available for the current month:
   Refer to Hoover Company.Compute all the appropriate variances using the two-variance approach.

Accepted Answer

The answer of Hoover Company
Hoover Company applies overhead based on...

Question 10

Crichton Company The following information is for Crichton Company's July production:
$\begin{array}{ll}
\textbf { Standard: }\
\text { Material } & 3.0 \text { feet per unit } @ \$ 4.20 \text { per foot } \
\text { Labor } & 2.5 \text { hours per unit } @ \$ 7.50 \text { per hour }
\end{array}$

$\begin{array}{ll}
\textbf { Actual: }\
\text { Production } & 2,750 \text { units produced during the month } \
\text { Material } & 8,700 \text { feet used; } 9,000 \text { feet purchased @ } \$ 4.50 \text { per foot } \
\text { Labor } & 7,000 \text { direct labor hours } \$ 7.90 \text { per hour }
\end{array}$ (Round all answers to the nearest dollar.)
Refer to Crichton Company.What is the material quantity variance?

Accepted Answer

A) $3,105 F 
B) $1,050 F 
C) $3,105 U 
D) $1,890 U 
A) $3,105 F 
B) $1,050 F 
C) $3,105 U 
D) $1,890 U

Question 11

The usage variance reflects the difference between the price paid for inputs and the standard price for those inputs.

Accepted Answer

A) True 
 B)False

Question 12

In a standard cost system,Work in Process Inventory is ordinarily debited with

Accepted Answer

A) actual costs of material and labor and a predetermined overhead cost for overhead. 
B) standard costs based on the level of input activity (such as direct labor hours worked). 
C) standard costs based on production output. 
D) actual costs of material,labor,and overhead. 
A) actual costs of material and labor and a predetermined overhead cost for overhead. 
B) standard costs based on the level of input activity (such as direct labor hours worked). 
C) standard costs based on production output. 
D) actual costs of material,labor,and overhead.

Question 13

Moore Company
Moore Company has the following information available for the current year:
   Refer to Moore Company.Compute the labor rate and efficiency variances.

Accepted Answer

The answer of Moore Company
Moore Company has the following information...

Question 14

The difference between the standard hours worked for a specific level of production and the actual hours worked is the labor rate variance.

Accepted Answer

A) True 
 B)False

Question 15

Crichton Company The following information is for Crichton Company's July production:
$\begin{array}{ll}
\textbf { Standard: }\
\text { Material } & 3.0 \text { feet per unit } @ \$ 4.20 \text { per foot } \
\text { Labor } & 2.5 \text { hours per unit } @ \$ 7.50 \text { per hour }
\end{array}$

$\begin{array}{ll}
\textbf { Actual: }\
\text { Production } & 2,750 \text { units produced during the month } \
\text { Material } & 8,700 \text { feet used; } 9,000 \text { feet purchased @ } \$ 4.50 \text { per foot } \
\text { Labor } & 7,000 \text { direct labor hours } \$ 7.90 \text { per hour }
\end{array}$ (Round all answers to the nearest dollar.)
Refer to Crichton Company.What is the labor efficiency variance?

Accepted Answer

A) $1,875 U 
B) $938 U 
C) $1,875 F 
D) $1,125 U 
A) $1,875 U 
B) $938 U 
C) $1,875 F 
D) $1,125 U

Question 16

Classic Cleaning Company Classic Cleaning Company manufactures a cleaning solvent.The company employs both skilled and unskilled workers.To produce one 55-gallon drum of solvent requires Materials A and B as well as skilled labor and unskilled labor.The standard and actual material and labor information is presented below:
Standard:
Material A: 30.25 gallons @ $1.25 per gallon
Material B: 24.75 gallons @ $2.00 per gallon
Skilled Labor: 4 hours @ $12 per hour
Unskilled Labor: 2 hours @ $ 7 per hour
Actual:
Material A: 10,716 gallons purchased and used @ $1.50 per gallon
Material B: 17,484 gallons purchased and used @ $1.90 per gallon
Skilled labor hours: 1,950 @ $11.90 per hour
Unskilled labor hours: 1,300 @ $7.15 per hour
During the current month Classic Cleaning Company manufactured 500 55-gallon drums.
Round all answers to the nearest whole dollar.
Refer to Classic Cleaning Company.What is the labor rate variance?

Accepted Answer

A) $0 
B) $1,083 U 
C) $2,583 U 
D) $1,083 F 
A) $0 
B) $1,083 U 
C) $2,583 U 
D) $1,083 F

Question 17

Genesis Company Genesis Company uses a standard cost system for its production process and applies overhead based on direct labor hours.The following information is available for September when Genesis produced 5,000 units:
$\begin{array}{ll}\text { Standard: }\
\text { DLH per unit } & 3.00\
\text { Variable overhead per DLH } & \$ 1.80 \
\text { Fixed overhead per DLH } & \$ 3.25 \
\text { Budgeted variable overhead } & \$ 27,250\
\text { Budgeted fixed overhead } & \$ 49,500\\\text { Actual: }\
\text {Direct labor hours }&16,000\
\text { Variable overhead}&\$31,325\
\text { Fixed overhead}&\$49,750\
\end{array}$ Refer to Genesis Company.Using the two-variance approach,what is the controllable variance?

Accepted Answer

A) $4,075 U 
B) $4,075 F 
C) $4,575 U 
D) $4,575 F 
A) $4,075 U 
B) $4,075 F 
C) $4,575 U 
D) $4,575 F

Question 18

A company has a favorable variable overhead spending variance,an unfavorable variable overhead efficiency variance,and underapplied variable overhead at the end of a period.The journal entry to record these variances and close the variable overhead control account will show which of the following? $\begin{array}{lll}
\mathrm{VOH} \text { spending } & \text { VOH efficiency } &\
\underline{\text{variance }} &\underline{\text{variance }} & \underline{\text{VMOH }}
\end{array}$

Accepted Answer

A) debit credit credit 
B) credit debit credit 
C) debit credit debit 
D) credit debit debit 
A) debit credit credit 
B) credit debit credit 
C) debit credit debit 
D) credit debit debit

Question 19

Stonegate Company
The following information is available for Stonegate Company for the current year:
Standard:
Material X: 3.0 pounds per unit @ $4.20 per pound
Material Y: 4.5 pounds per unit @ $3.30 per pound
Class S labor: 3 hours per unit @ $10.50 per hour
Class US labor: 7 hours per unit @ $8.00 per hour
Actual:
Material X: 3.6 pounds per unit @ $4.00 per pound (purchased and used)
Material Y: 4.4 pounds per unit @ $3.25 per pound (purchased and used)
Class S labor: 3.8 hours per unit @ $10.60 per hour
Class US labor: 5.7 hours per unit @ $7.80 per hour
Stonegate Company produced a total of 45,750 units.
Refer to Stonegate Company.Compute the material price,mix,and yield variances (round to the nearest dollar).

Accepted Answer

@#IMG-DLM& *(45,750 ´ 8 = 366,

Question 20

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 controllable variance?

Accepted Answer

A) $5,812.50 U 
B) $5,812.50 F 
C) $4,375.00 U 
D) $4,375.00 F 
A) $5,812.50 U 
B) $5,812.50 F 
C) $4,375.00 U 
D) $4,375.00 F

The effect of substituting a non-standard mix of materials during the production process is referred to as a material yield variance.

When multiple labor categories are used,the monetary impact of using a higher or lower number of hours than a standard allows is referred to as a labor mix variance.

A total variance is best defined as the difference between total

Explain the source of variable overhead spending and efficiency variances and how these variances are computed.

Hoover Company Hoover Company applies overhead based on direct labor hours and has the following available for the current month: Refer to Hoover Company.Compute all the appropriate variances using the two-variance approach.

The usage variance reflects the difference between the price paid for inputs and the standard price for those inputs.

In a standard cost system,Work in Process Inventory is ordinarily debited with

Moore Company Moore Company has the following information available for the current year: Refer to Moore Company.Compute the labor rate and efficiency variances.

The difference between the standard hours worked for a specific level of production and the actual hours worked is the labor rate 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

The effect of substituting a non-standard mix of materials during the production process is referred to as a material yield variance.

When multiple labor categories are used,the monetary impact of using a higher or lower number of hours than a standard allows is referred to as a labor mix variance.

A total variance is best defined as the difference between total

Explain the source of variable overhead spending and efficiency variances and how these variances are computed.

Hoover Company Hoover Company applies overhead based on direct labor hours and has the following available for the current month: Refer to Hoover Company.Compute all the appropriate variances using the two-variance approach.

The usage variance reflects the difference between the price paid for inputs and the standard price for those inputs.

In a standard cost system,Work in Process Inventory is ordinarily debited with

Moore Company Moore Company has the following information available for the current year: Refer to Moore Company.Compute the labor rate and efficiency variances.

The difference between the standard hours worked for a specific level of production and the actual hours worked is the labor rate 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