Question 1

A standard cost card shows what the company spent to produce each unit of product.

Accepted Answer

A) True 
 B)False

Question 2

A budget depends upon:

Accepted Answer

A) only the level of output. 
B) only the input standards. 
C) both the level of output and the input standards. 
D) neither the level of output nor the input standards. 
A) only the level of output. 
B) only the input standards. 
C) both the level of output and the input standards. 
D) neither the level of output nor the input standards.

Question 3

The fixed overhead volume variance is the difference between:

Accepted Answer

A) Actual fixed overhead and budgeted fixed overhead. 
B) Actual fixed overhead and applied fixed overhead. 
C) Applied fixed overhead and budgeted fixed overhead. 
D) Actual fixed overhead and the standard fixed overhead rate times the actual cost driver. 
A) Actual fixed overhead and budgeted fixed overhead. 
B) Actual fixed overhead and applied fixed overhead. 
C) Applied fixed overhead and budgeted fixed overhead. 
D) Actual fixed overhead and the standard fixed overhead rate times the actual cost driver.

Question 4

Raven applies overhead based on direct labor hours.The variable overhead standard is 2 hours at $11 per hour.During July,Raven spent $116,700 for variable overhead.8,890 labor hours were used to produce 4,700 units.What is the variable overhead rate variance?

Accepted Answer

A) $13,300 unfavorable 
B) $6,650 unfavorable 
C) $18,910 unfavorable 
D) $13,300 favorable 
A) $13,300 unfavorable 
B) $6,650 unfavorable 
C) $18,910 unfavorable 
D) $13,300 favorable

Question 5

Oxford Co.has a materials standard of 2.1 pounds per unit of output.Each pound has a standard price of $10 per pound.During February,Oxford Co.paid $57,220 for 4,840 pounds,which were used to produce 2,400 units.What is the direct materials quantity variance?

Accepted Answer

A) $2,000 unfavorable 
B) $2,000 favorable 
C) $6,820 favorable 
D) $6,820 unfavorable 
A) $2,000 unfavorable 
B) $2,000 favorable 
C) $6,820 favorable 
D) $6,820 unfavorable

Question 6

Fletcher has budgeted fixed overhead of $135,000 based on budgeted production of 9,000 units.During July,9,400 units were produced and $142,800 was spent on fixed overhead.What is the fixed overhead spending variance?

Accepted Answer

A) $7,800 unfavorable 
B) $1,800 unfavorable 
C) $1,800 favorable 
D) $6,000 favorable 
A) $7,800 unfavorable 
B) $1,800 unfavorable 
C) $1,800 favorable 
D) $6,000 favorable

Question 7

A standard cost system initially records manufacturing costs at the standard rather than the actual amount.

Accepted Answer

A) True 
 B)False

Question 8

Warner Co.has budgeted fixed overhead of $150,000.Practical capacity is 6,000 units,and budgeted production is 5,000 units.During February,4,800 units were produced and $155,600 was spent on fixed overhead.What is the expected (planned)capacity variance?

Accepted Answer

A) $5,600 unfavorable 
B) $25,000 unfavorable 
C) $30,000 unfavorable 
D) $35,600 unfavorable 
A) $5,600 unfavorable 
B) $25,000 unfavorable 
C) $30,000 unfavorable 
D) $35,600 unfavorable

Question 9

A price standard is the price that should be paid per output unit for the input.

Accepted Answer

A) True 
 B)False

Question 10

Wharton Tooling uses a standard cost system to account for the costs of its one product.Variable overhead standards are 14 hours of labor at a standard rate of $9.Fixed overhead is applied at a rate of $150 per unit,based on budgeted production of 650 units.During July,Wharton Tooling produced 600 units.Payroll totaled $112,930 for 8,770 hours worked.Overhead incurred was $77,490 variable and $98,750 fixed.Calculate the:
a.variable overhead rate variance.
b.variable overhead efficiency variance.
c.fixed overhead spending variance.

Accepted Answer

a.$1,440 favorable = $77,490 - (8,770 ×

Question 11

Jupiter Co.applies overhead based on direct labor hours.The variable overhead standard is 4 hours at $12 per hour.During February,Jupiter Co.spent $113,400 for variable overhead.9,150 labor hours were used to produce 2,400 units.How much is variable overhead on the flexible budget?

Accepted Answer

A) $28,800 
B) $109,800 
C) $113,400 
D) $115,200 
A) $28,800 
B) $109,800 
C) $113,400 
D) $115,200

Question 12

Swan Company has a direct labor standard of 15 hours per unit of output.Each employee has a standard wage rate of $14 per hour.During March,employees worked 13,100 hours.The direct labor rate variance was $9,170 favorable,and the direct labor efficiency variance was $15,400 unfavorable.How many units were produced?

Accepted Answer

A) 873 units 
B) 655 units 
C) 1,100 units 
D) 800 units 
A) 873 units 
B) 655 units 
C) 1,100 units 
D) 800 units

Question 13

The difference between the actual volume and the budgeted volume,multiplied by the fixed overhead rate based on budgeted volume,is the:

Accepted Answer

A) fixed overhead spending variance. 
B) fixed overhead price variance. 
C) fixed overhead efficiency variance. 
D) fixed overhead volume variance. 
A) fixed overhead spending variance. 
B) fixed overhead price variance. 
C) fixed overhead efficiency variance. 
D) fixed overhead volume variance.

Question 14

Which of the following statements is true about variances?

Accepted Answer

A) Positive variances (i.e. ,those with a positive sign)are always favorable. 
B) Positive variances (i.e. ,those with a positive sign)are always unfavorable. 
C) Negative variances (i.e. ,those with a negative sign)are always favorable. 
D) There is not necessarily any correlation between the sign of the result (positive or negative)and whether the variance is positive or negative. 
A) Positive variances (i.e. ,those with a positive sign)are always favorable. 
B) Positive variances (i.e. ,those with a positive sign)are always unfavorable. 
C) Negative variances (i.e. ,those with a negative sign)are always favorable. 
D) There is not necessarily any correlation between the sign of the result (positive or negative)and whether the variance is positive or negative.

Question 15

A fixed overhead rate based on ________ highlights for management attention the cost of unutilized capacity.

Accepted Answer

A) budgeted production 
B) practical capacity 
C) utilized capacity 
D) actual production 
A) budgeted production 
B) practical capacity 
C) utilized capacity 
D) actual production

Question 16

Madrid Co.has a direct labor standard of 4 hours per unit of output.Each employee has a standard wage rate of $11 per hour.During February,Madrid Co.paid $99,500 to employees for 9,150 hours worked.2,400 units were produced during February.What is the direct labor efficiency variance?

Accepted Answer

A) $1,150 favorable 
B) $4,950 favorable 
C) $6,100 favorable 
D) $302 favorable 
A) $1,150 favorable 
B) $4,950 favorable 
C) $6,100 favorable 
D) $302 favorable

Question 17

Madrid Co.has a direct labor standard of 4 hours per unit of output.Each employee has a standard wage rate of $11 per hour.During February,Madrid Co.paid $99,500 to employees for 9,150 hours worked.2,400 units were produced during February.What is the direct labor rate variance?

Accepted Answer

A) $1,150 favorable 
B) $4,950 favorable 
C) $6,100 favorable 
D) $302 favorable 
A) $1,150 favorable 
B) $4,950 favorable 
C) $6,100 favorable 
D) $302 favorable

Question 18

Pearl Co.produces pearl necklaces and uses a standard cost system.Fixed overhead is applied to production at a rate of $34 per unit,based on budgeted production of 3,000 per month.During December,Pearl produced 3,100 pearl necklaces.Fixed overhead incurred totaled $114,940.Calculate the:
a.fixed overhead spending variance.
b.fixed overhead volume variance.
c.over- or underapplied fixed overhead.

Accepted Answer

a.$12,940 unfavorable = $114,940 - (3,00

Question 19

The price variance for direct labor is called the:

Accepted Answer

A) direct labor rate variance. 
B) direct labor price variance. 
C) indirect labor variance. 
D) direct labor quantity variance. 
A) direct labor rate variance. 
B) direct labor price variance. 
C) indirect labor variance. 
D) direct labor quantity variance.

Question 20

The formula SR × (SH − AH)is the:

Accepted Answer

A) direct labor spending variance. 
B) direct labor volume variance. 
C) direct labor rate variance. 
D) direct labor efficiency variance. 
A) direct labor spending variance. 
B) direct labor volume variance. 
C) direct labor rate variance. 
D) direct labor efficiency variance.

A standard cost card shows what the company spent to produce each unit of product.

A budget depends upon:

The fixed overhead volume variance is the difference between:

Raven applies overhead based on direct labor hours.The variable overhead standard is 2 hours at $11 per hour.During July,Raven spent $116,700 for variable overhead.8,890 labor hours were used to produce 4,700 units.What is the variable overhead rate variance?

Oxford Co.has a materials standard of 2.1 pounds per unit of output.Each pound has a standard price of $10 per pound.During February,Oxford Co.paid $57,220 for 4,840 pounds,which were used to produce 2,400 units.What is the direct materials quantity variance?

Fletcher has budgeted fixed overhead of $135,000 based on budgeted production of 9,000 units.During July,9,400 units were produced and $142,800 was spent on fixed overhead.What is the fixed overhead spending variance?

A standard cost system initially records manufacturing costs at the standard rather than the actual amount.

Warner Co.has budgeted fixed overhead of $150,000.Practical capacity is 6,000 units,and budgeted production is 5,000 units.During February,4,800 units were produced and $155,600 was spent on fixed overhead.What is the expected (planned)capacity variance?

A price standard is the price that should be paid per output unit for the input.

Jupiter Co.applies overhead based on direct labor hours.The variable overhead standard is 4 hours at $12 per hour.During February,Jupiter Co.spent $113,400 for variable overhead.9,150 labor hours were used to produce 2,400 units.How much is variable overhead on the flexible budget?

The difference between the actual volume and the budgeted volume,multiplied by the fixed overhead rate based on budgeted volume,is the:

Which of the following statements is true about variances?

A fixed overhead rate based on ________ highlights for management attention the cost of unutilized capacity.

Madrid Co.has a direct labor standard of 4 hours per unit of output.Each employee has a standard wage rate of $11 per hour.During February,Madrid Co.paid $99,500 to employees for 9,150 hours worked.2,400 units were produced during February.What is the direct labor efficiency variance?

Madrid Co.has a direct labor standard of 4 hours per unit of output.Each employee has a standard wage rate of $11 per hour.During February,Madrid Co.paid $99,500 to employees for 9,150 hours worked.2,400 units were produced during February.What is the direct labor rate variance?

The price variance for direct labor is called the:

The formula SR × (SH − AH)is the:

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing and Cost Management

Cost Behavior

Cost-Volume-Profit Analysis

Incremental Analysis for Short-Term Decision Making

Budgetary Planning

Decentralized Performance Evaluation

Capital Budgeting

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 9: Standard Costing and Variance Analysis

A standard cost card shows what the company spent to produce each unit of product.

A budget depends upon:

The fixed overhead volume variance is the difference between:

Raven applies overhead based on direct labor hours.The variable overhead standard is 2 hours at $11 per hour.During July,Raven spent $116,700 for variable overhead.8,890 labor hours were used to produce 4,700 units.What is the variable overhead rate variance?

Oxford Co.has a materials standard of 2.1 pounds per unit of output.Each pound has a standard price of $10 per pound.During February,Oxford Co.paid $57,220 for 4,840 pounds,which were used to produce 2,400 units.What is the direct materials quantity variance?

Fletcher has budgeted fixed overhead of $135,000 based on budgeted production of 9,000 units.During July,9,400 units were produced and $142,800 was spent on fixed overhead.What is the fixed overhead spending variance?

A standard cost system initially records manufacturing costs at the standard rather than the actual amount.

Warner Co.has budgeted fixed overhead of $150,000.Practical capacity is 6,000 units,and budgeted production is 5,000 units.During February,4,800 units were produced and $155,600 was spent on fixed overhead.What is the expected (planned)capacity variance?

A price standard is the price that should be paid per output unit for the input.

Jupiter Co.applies overhead based on direct labor hours.The variable overhead standard is 4 hours at $12 per hour.During February,Jupiter Co.spent $113,400 for variable overhead.9,150 labor hours were used to produce 2,400 units.How much is variable overhead on the flexible budget?

The difference between the actual volume and the budgeted volume,multiplied by the fixed overhead rate based on budgeted volume,is the:

Which of the following statements is true about variances?

A fixed overhead rate based on ________ highlights for management attention the cost of unutilized capacity.

Madrid Co.has a direct labor standard of 4 hours per unit of output.Each employee has a standard wage rate of $11 per hour.During February,Madrid Co.paid $99,500 to employees for 9,150 hours worked.2,400 units were produced during February.What is the direct labor efficiency variance?

Madrid Co.has a direct labor standard of 4 hours per unit of output.Each employee has a standard wage rate of $11 per hour.During February,Madrid Co.paid $99,500 to employees for 9,150 hours worked.2,400 units were produced during February.What is the direct labor rate variance?

The price variance for direct labor is called the:

The formula SR × (SH − AH)is the:

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing and Cost Management

Cost Behavior

Cost-Volume-Profit Analysis

Incremental Analysis for Short-Term Decision Making

Budgetary Planning

Decentralized Performance Evaluation

Capital Budgeting

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters