Question 1

Which of the following are considered controllable variances?

Accepted Answer

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

Question 2

Expected standards generally yield favorable variances.

Accepted Answer

A) True 
 B)False

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:
  Refer to Fleetwood Company. Using the three-variance approach, what is the volume variance?

Accepted Answer

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

Question 4

Variance analysis for overhead normally focuses on

Accepted Answer

A)  efficiency variances for machinery and indirect production costs. 
B)  volume variances for fixed overhead costs. 
C)  the controllable variance as a lump-sum amount. 
D)  the difference between budgeted and applied variable overhead. 
A)  efficiency variances for machinery and indirect production costs. 
B)  volume variances for fixed overhead costs. 
C)  the controllable variance as a lump-sum amount. 
D)  the difference between budgeted and applied variable overhead.

Question 5

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:
  Refer to Genesis Company. Using the two-variance approach, what is the noncontrollable variance?

Accepted Answer

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

Question 6

Reichs Company The following information is for Reichs Company's September production:
  (Round all answers to the nearest dollar.)
Refer to Reichs Company. What is the material price variance (calculated at point of purchase)?

Accepted Answer

A)  $ 735 F 
B)  $ 735 U 
C)  $ 710 F 
D)  $ 710 U 
A)  $ 735 F 
B)  $ 735 U 
C)  $ 710 F 
D)  $ 710 U

Question 7

Total actual overhead minus total budgeted overhead at the actual input production level equals the

Accepted Answer

A)  variable overhead spending variance. 
B)  total overhead efficiency variance. 
C)  total overhead spending variance. 
D)  total overhead volume variance. 
A)  variable overhead spending variance. 
B)  total overhead efficiency variance. 
C)  total overhead spending variance. 
D)  total overhead volume variance.

Question 8

Weaver Corporation manufactures a certain product by mixing three kinds of materials in large batches. The blend master has the responsibility for maintaining the quality of the product, and this often requires altering the proportions of the various ingredients. Standard costs are used to provide material control information. The standard material inputs per batch are:
   The finished product is packed in 50-pound boxes; the standard material cost of each box is, therefore, $3.61.
During January, the following materials were put in process:
   Inventories in process totaled 5,000 pounds at the beginning of the month and 8,000 pounds at the end of the month. It is assumed that these inventories consisted of materials in their standard proportions. Finished output during January amounted to 4,100 boxes.
Required: Compute the total material quantity variance for the month and break it down into mix and yield components.

Accepted Answer

Material Q

Question 9

Why are fixed overhead variances considered noncontrollable?

Accepted Answer

Management has limited ability to contro

Question 10

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 mix variance?

Accepted Answer

A)  $1,083 U 
B)  $2,588 U 
C)  $1,083 F 
D)  $2,588 F 
A)  $1,083 U 
B)  $2,588 U 
C)  $1,083 F 
D)  $2,588 F

Question 11

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 12

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 13

Which of the following capacity levels has traditionally been used to compute the fixed overhead application rate?

Accepted Answer

A)  expected annual 
B)  normal 
C)  theoretical 
D)  prior year 
A)  expected annual 
B)  normal 
C)  theoretical 
D)  prior year

Question 14

Total quality management (TQM) and just-in-time (JIT) production systems are based on the premise of ideal production standards.

Accepted Answer

A) True 
 B)False

Question 15

Provide the correct term for each of the following definitions:

Accepted Answer

The answer of Provide the correct term for each of...

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:
  Refer to Genesis Company. Using the one-variance approach, what is the total overhead variance?

Accepted Answer

A)  $ 275 U 
B)  $ 1,000 U 
C)  $ 4,325 U 
D)  $ 5,325 U 
A)  $ 275 U 
B)  $ 1,000 U 
C)  $ 4,325 U 
D)  $ 5,325 U

Question 17

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 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:
  Refer to Genesis Company. Using the four-variance approach, what is the volume variance?

Accepted Answer

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

Question 19

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...

Question 20

An overhead efficiency variance is related entirely to variable overhead.

Accepted Answer

A) True 
 B)False

Which of the following are considered controllable variances?

Expected standards generally yield favorable variances.

Variance analysis for overhead normally focuses on

Reichs Company The following information is for Reichs Company's September production: (Round all answers to the nearest dollar.) Refer to Reichs Company. What is the material price variance (calculated at point of purchase)?

Total actual overhead minus total budgeted overhead at the actual input production level equals the

Why are fixed overhead variances considered noncontrollable?

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?

Which of the following capacity levels has traditionally been used to compute the fixed overhead application rate?

Total quality management (TQM) and just-in-time (JIT) production systems are based on the premise of ideal production standards.

Provide the correct term for each of the following definitions:

An unfavorable fixed overhead volume variance is most often caused by

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.

An overhead efficiency variance is related entirely to variable overhead.

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

Which of the following are considered controllable variances?

Expected standards generally yield favorable variances.

Variance analysis for overhead normally focuses on

Reichs Company The following information is for Reichs Company's September production: (Round all answers to the nearest dollar.) Refer to Reichs Company. What is the material price variance (calculated at point of purchase)?

Total actual overhead minus total budgeted overhead at the actual input production level equals the

Why are fixed overhead variances considered noncontrollable?

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?

Which of the following capacity levels has traditionally been used to compute the fixed overhead application rate?

Total quality management (TQM) and just-in-time (JIT) production systems are based on the premise of ideal production standards.

Provide the correct term for each of the following definitions:

An unfavorable fixed overhead volume variance is most often caused by

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.

An overhead efficiency variance is related entirely to variable overhead.

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