Question 1

Inventories cannot be valued at standard cost in financial statements.

Accepted Answer

A) True 
 B)False  False

Question 2

A company developed the following per-unit standards for its product: 2 pounds of direct materials at $4 per pound. Last month, 1,500 pounds of direct materials were purchased for $5,700. The direct materials price variance for last month was

Accepted Answer

A) $5,700 favorable. 
B) $300 favorable. 
C) $150 favorable. 
D) $300 unfavorable. 
A) $5,700 favorable. 
B) $300 favorable. 
C) $150 favorable. 
D) $300 unfavorable. B

Question 3

The total overhead variance is the difference between the

Accepted Answer

A) actual overhead costs and overhead costs applied based on standard hours allowed. 
B) actual overhead costs and overhead costs applied based on actual hours. 
C) overhead costs applied based on actual hours and overhead costs applied based on standard hours allowed. 
D) the actual overhead costs and the standard direct labor costs. 
A) actual overhead costs and overhead costs applied based on standard hours allowed. 
B) actual overhead costs and overhead costs applied based on actual hours. 
C) overhead costs applied based on actual hours and overhead costs applied based on standard hours allowed. 
D) the actual overhead costs and the standard direct labor costs. A

Question 4

Monster Company produces a product requiring 3 direct labor hours at $16.00 per hour. During January, 2,000 products are produced using 6,300 direct labor hours. Monster's actual payroll during January was $98,280. What is the labor quantity variance?

Accepted Answer

A) $2,280 U 
B) $4,800 F 
C) $2,520 F 
D) $4,800 U 
A) $2,280 U 
B) $4,800 F 
C) $2,520 F 
D) $4,800 U

Question 5

The starting point for determining the causes of an unfavorable materials price variance is the purchasing department.

Accepted Answer

A) True 
 B)False

Question 6

A direct labor price standard is frequently called the direct labor efficiency standard.

Accepted Answer

A) True 
 B)False

Question 7

The materials price variance is normally caused by the production department.

Accepted Answer

A) True 
 B)False

Question 8

A debit to the Overhead Volume Variance account indicates that the standard hours allowed for the output produced was greater than the standard hours at normal capacity.

Accepted Answer

A) True 
 B)False

Question 9

Allowance for spoilage is part of the direct

Accepted Answer

A) materials price standard. 
B) materials quantity standard. 
C) labor price standard. 
D) labor quantity standard. 
A) materials price standard. 
B) materials quantity standard. 
C) labor price standard. 
D) labor quantity standard.

Question 10

If production exceeds normal capacity, the overhead volume variance will be favorable.

Accepted Answer

A) True 
 B)False

Question 11

The perspectives included in the balanced scorecard approach include all of the following except the

Accepted Answer

A) internal process perspective. 
B) capacity utilization perspective. 
C) learning and growth perspective. 
D) customer perspective. 
A) internal process perspective. 
B) capacity utilization perspective. 
C) learning and growth perspective. 
D) customer perspective.

Question 12

Ideal standards will generally result in favorable variances for the company.

Accepted Answer

A) True 
 B)False

Question 13

Normal standards incorporate normal contingencies of production into the standards.

Accepted Answer

A) True 
 B)False

Question 14

A standard which represents an efficient level of performance that is attainable under expected operating conditions is called a(n)

Accepted Answer

A) ideal standard. 
B) loose standard. 
C) tight standard. 
D) normal standard. 
A) ideal standard. 
B) loose standard. 
C) tight standard. 
D) normal standard.

Question 15

Dillon has a standard of 1.5 pounds of materials per unit, at $6 per pound. In producing 2,000 units, Dillon used 3,100 pounds of materials at a total cost of $18,135. Dillon's materials price variance is

Accepted Answer

A) $135 U. 
B) $465 F. 
C) $600 F. 
D) $1,050 F. 
A) $135 U. 
B) $465 F. 
C) $600 F. 
D) $1,050 F.

Question 16

The standard number of hours that should have been worked for the output attained is 6,000 direct labor hours and the actual number of direct labor hours worked was 6,300. If the direct labor price variance was $3,150 unfavorable, and the standard rate of pay was $9 per direct labor hour, what was the actual rate of pay for direct labor?

Accepted Answer

A) $8.50 per direct labor hour 
B) $7.50 per direct labor hour 
C) $9.50 per direct labor hour 
D) $9.00 per direct labor hour 
A) $8.50 per direct labor hour 
B) $7.50 per direct labor hour 
C) $9.50 per direct labor hour 
D) $9.00 per direct labor hour

Question 17

The balanced scorecard

Accepted Answer

A) incorporates financial and nonfinancial measures in an integrated system. 
B) is based solely on financial measures. 
C) is based solely on nonfinancial measures. 
D) does not use financial or nonfinancial measures. 
A) incorporates financial and nonfinancial measures in an integrated system. 
B) is based solely on financial measures. 
C) is based solely on nonfinancial measures. 
D) does not use financial or nonfinancial measures.

Question 18

A variance is the difference between actual costs and standard costs.

Accepted Answer

A) True 
 B)False

Question 19

Marburg Co. expects direct materials cost of $6 per unit for 100,000 units (a total of $600,000 of direct materials costs). Marburg's standard direct materials cost and budgeted direct materials cost is

Accepted Answer

The answer of Marburg Co. expects direct materials cost of...

Question 20

Which department is usually responsible for a labor price variance attributable to misallocation of workers?

Accepted Answer

A) Quality control 
B) Purchasing 
C) Engineering 
D) Production 
A) Quality control 
B) Purchasing 
C) Engineering 
D) Production

Exam 22: Standard Costs and Balanced Scorecard

Inventories cannot be valued at standard cost in financial statements.

A company developed the following per-unit standards for its product: 2 pounds of direct materials at $4 per pound. Last month, 1,500 pounds of direct materials were purchased for $5,700. The direct materials price variance for last month was

The total overhead variance is the difference between the

Monster Company produces a product requiring 3 direct labor hours at $16.00 per hour. During January, 2,000 products are produced using 6,300 direct labor hours. Monster's actual payroll during January was $98,280. What is the labor quantity variance?

The starting point for determining the causes of an unfavorable materials price variance is the purchasing department.

A direct labor price standard is frequently called the direct labor efficiency standard.

The materials price variance is normally caused by the production department.

A debit to the Overhead Volume Variance account indicates that the standard hours allowed for the output produced was greater than the standard hours at normal capacity.

Allowance for spoilage is part of the direct

If production exceeds normal capacity, the overhead volume variance will be favorable.

The perspectives included in the balanced scorecard approach include all of the following except the

Ideal standards will generally result in favorable variances for the company.

Normal standards incorporate normal contingencies of production into the standards.

A standard which represents an efficient level of performance that is attainable under expected operating conditions is called a(n)

Dillon has a standard of 1.5 pounds of materials per unit, at $6 per pound. In producing 2,000 units, Dillon used 3,100 pounds of materials at a total cost of $18,135. Dillon's materials price variance is

The balanced scorecard

A variance is the difference between actual costs and standard costs.

Marburg Co. expects direct materials cost of $6 per unit for 100,000 units (a total of $600,000 of direct materials costs). Marburg's standard direct materials cost and budgeted direct materials cost is

Which department is usually responsible for a labor price variance attributable to misallocation of workers?

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Planning for Capital Investments

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