Question 1

The sum of the labor mix and labor yield variances equals

Accepted Answer

A) the labor efficiency variance. 
B) the total labor variance. 
C) the labor rate variance. 
D) nothing because these two variances cannot be added since they use different costs. 
A) the labor efficiency variance. 
B) the total labor variance. 
C) the labor rate variance. 
D) nothing because these two variances cannot be added since they use different costs.

Question 2

A variable overhead spending variance is caused by

Accepted Answer

A) using more or fewer actual hours than the standard hours allowed for the production achieved. 
B) paying a higher/lower average actual overhead price per unit of the activity base than the standard price allowed per unit of the activity base. 
C) larger/smaller waste and shrinkage associated with the resources involved than expected. 
D) both b and c are causes. 
A) using more or fewer actual hours than the standard hours allowed for the production achieved. 
B) paying a higher/lower average actual overhead price per unit of the activity base than the standard price allowed per unit of the activity base. 
C) larger/smaller waste and shrinkage associated with the resources involved than expected. 
D) both b and c are causes.

Question 3

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 volume variance?

Accepted Answer

A) $3,125.00 F 
B) $3,875.00 F 
C) $6,063.00 U 
D) $3,875.00 U 
A) $3,125.00 F 
B) $3,875.00 F 
C) $6,063.00 U 
D) $3,875.00 U

Question 4

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

Accepted Answer

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

Question 5

Ideal standards do not allow for normal operating delays or human limitations.

Accepted Answer

A) True 
 B)False

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 three-variance approach,what is the volume variance?

Accepted Answer

A) $ 750 F 
B) $ 750 U 
C) $1,000 U 
D) $1,000 F 
A) $ 750 F 
B) $ 750 U 
C) $1,000 U 
D) $1,000 F

Question 7

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 material quantity variance?

Accepted Answer

A) $2,250 F 
B) $2,250 U 
C) $225 F 
D) $2,475 U 
A) $2,250 F 
B) $2,250 U 
C) $225 F 
D) $2,475 U

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 material quantity variance?

Accepted Answer

A) $ 740 F 
B) $ 750 F 
C) $ 750 U 
D) $2,625 U 
A) $ 740 F 
B) $ 750 F 
C) $ 750 U 
D) $2,625 U

Question 9

Discuss briefly the type of information contained on (a)a bill of materials and (b)an operations flow document.

Accepted Answer

(a)A bill of materials contains the iden

Question 10

The difference between what was paid for inputs and what should have been paid for inputs is referred to as a _________________________.

Accepted Answer

The answer of The difference between what was paid for...

Question 11

Beethoven Company began business early in January using a standard costing for its single product.With standard capacity set at 10,000 standard productive hours per month,the following standard cost sheet was set up for one unit of product:
   Fixed costs are incurred evenly throughout the year.The following unfavorable variances from standard costs were recorded during the first month of operations:
 $\begin{array}{ll}
\text { Material price } & \$ 0 \
\text { Material usage } & 4,000 \
\text { Labor rate } & 800 \
\text { Labor efficiency } & 300 \
\text { Overhead volume } & 6,000 \
\text { Overhead budget (2 variance analysis) } & 1,000
\end{array}$ Required: Determine the following: (a)fixed overhead budgeted for a year; (b)the number of units completed during January assuming no work in process at January 31; (c)debits made to the Work in Process account for direct material,direct labor,and manufacturing overhead; (d)number of pieces of material issued during January; (e)total of direct labor payroll recorded for January; (f)total of manufacturing overhead recorded in January.

Accepted Answer

The answer of Beethoven Company began business early in January...

Question 12

Standard costs may be used for

Accepted Answer

A) product costing. 
B) planning. 
C) controlling. 
D) all of the above. 
A) product costing. 
B) planning. 
C) controlling. 
D) all of the above.

Question 13

A firm producing one product has a budgeted overhead of $100,000,of which $20,000 is variable.The budgeted direct labor is 10,000 hours.
Required: Fill in the blanks.

Accepted Answer

The answer of A firm producing one product has a...

Question 14

Ritchie Company Ritchie Company uses a standard cost system for its production process.Ritchie Company applies overhead based on direct labor hours.The following information is available for July:
  Refer to Ritchie Company Using the two-variance approach,what is the noncontrollable variance?

Accepted Answer

A) $26,040 F 
B) $0 
C) $6,930 U 
D) $13,260 U 
A) $26,040 F 
B) $0 
C) $6,930 U 
D) $13,260 U

Question 15

Actual fixed overhead is $33,300 (12,000 machine hours)and fixed overhead was estimated at $34,000 when the predetermined rate of $3.00 per machine hour was set.If 11,500 standard hours were allowed for actual production,applied fixed overhead is

Accepted Answer

A) $33,300. 
B) $34,000. 
C) $34,500. 
D) not determinable without knowing the actual number of units produced. 
A) $33,300. 
B) $34,000. 
C) $34,500. 
D) not determinable without knowing the actual number of units produced.

Question 16

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 three-variance approach,what is the spending variance?

Accepted Answer

A) $2,525 U 
B) $2,775 U 
C) $4,375 U 
D) $4,375 F 
A) $2,525 U 
B) $2,775 U 
C) $4,375 U 
D) $4,375 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 three-variance approach,what is the efficiency variance?

Accepted Answer

A) $1,800 F 
B) $1,800 U 
C) $2,050 U 
D) $2,550 F 
A) $1,800 F 
B) $1,800 U 
C) $2,050 U 
D) $2,550 F

Question 18

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 variable overhead spending variance?

Accepted Answer

A) $2,525U 
B) $4,075 F 
C) $4,075 U 
D) $4,325 U 
A) $2,525U 
B) $4,075 F 
C) $4,075 U 
D) $4,325 U

Question 19

Superior Fuel Company uses a standard cost system.Overhead cost information for January is as follows:   What is the total overhead variance?

Accepted Answer

A) $1,200 F 
B) $1,200 U 
C) $1,400 F 
D) $1,400 U 
A) $1,200 F 
B) $1,200 U 
C) $1,400 F 
D) $1,400 U

Question 20

The difference between actual variable overhead and budgeted variable overhead based upon actual hours is referred to as the variable overhead efficiency variance.

Accepted Answer

A) True 
 B)False

The sum of the labor mix and labor yield variances equals

A variable overhead spending variance is caused by

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

Ideal standards do not allow for normal operating delays or human limitations.

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 material quantity variance?

Discuss briefly the type of information contained on (a)a bill of materials and (b)an operations flow document.

The difference between what was paid for inputs and what should have been paid for inputs is referred to as a _________________________.

Standard costs may be used for

A firm producing one product has a budgeted overhead of $100,000,of which $20,000 is variable.The budgeted direct labor is 10,000 hours. Required: Fill in the blanks.

Ritchie Company Ritchie Company uses a standard cost system for its production process.Ritchie Company applies overhead based on direct labor hours.The following information is available for July: Refer to Ritchie Company Using the two-variance approach,what is the noncontrollable variance?

Actual fixed overhead is $33,300 (12,000 machine hours)and fixed overhead was estimated at $34,000 when the predetermined rate of $3.00 per machine hour was set.If 11,500 standard hours were allowed for actual production,applied fixed overhead is

Superior Fuel Company uses a standard cost system.Overhead cost information for January is as follows: What is the total overhead variance?

The difference between actual variable overhead and budgeted variable overhead based upon actual hours is referred to as the variable overhead efficiency 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 sum of the labor mix and labor yield variances equals

A variable overhead spending variance is caused by

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

Ideal standards do not allow for normal operating delays or human limitations.

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 material quantity variance?

Discuss briefly the type of information contained on (a)a bill of materials and (b)an operations flow document.

The difference between what was paid for inputs and what should have been paid for inputs is referred to as a _________________________.

Standard costs may be used for

A firm producing one product has a budgeted overhead of $100,000,of which $20,000 is variable.The budgeted direct labor is 10,000 hours. Required: Fill in the blanks.

Ritchie Company Ritchie Company uses a standard cost system for its production process.Ritchie Company applies overhead based on direct labor hours.The following information is available for July: Refer to Ritchie Company Using the two-variance approach,what is the noncontrollable variance?

Actual fixed overhead is $33,300 (12,000 machine hours)and fixed overhead was estimated at $34,000 when the predetermined rate of $3.00 per machine hour was set.If 11,500 standard hours were allowed for actual production,applied fixed overhead is

Superior Fuel Company uses a standard cost system.Overhead cost information for January is as follows: What is the total overhead variance?

The difference between actual variable overhead and budgeted variable overhead based upon actual hours is referred to as the variable overhead efficiency 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