Question 1

Accounting systems that use standards for product costs are called budgeted cost systems.

Accepted Answer

A) True 
 B)False

Question 2

Nonfinancial performance output measures are used to improve the input measures.

Accepted Answer

A) True 
 B)False

Question 3

Ruby Company produces a chair that requires 5 yards of material per unit. The standard price of one yard of material is $7.60. During the month, 8,500 chairs were manufactured, using 40,000 yards at a cost of $7.50.
Determine the a) price variance, b) quantity variance, and c) total cost variance.

Accepted Answer

a) Price variance = $7.50 - $7

Question 4

The formula to compute the direct labor rate variance is to calculate the difference between

Accepted Answer

A)  Actual costs + Actual hours × Standard rate) 
B)  Actual costs - Standard cost 
C)  Actual hours × Standard rate) - Standard costs 
D)  Actual costs - Actual hours × Standard rate) 
A)  Actual costs + Actual hours × Standard rate) 
B)  Actual costs - Standard cost 
C)  Actual hours × Standard rate) - Standard costs 
D)  Actual costs - Actual hours × Standard rate)

Question 5

The direct labor rate variance is

Accepted Answer

A)  $5,490 unfavorable 
B)  $5,490 favorable 
C)  $33,000 favorable 
D)  $33,000 unfavorable 
A)  $5,490 unfavorable 
B)  $5,490 favorable 
C)  $33,000 favorable 
D)  $33,000 unfavorable

Question 6

Which of the following conditions normally would not indicate that standard costs should be revised?

Accepted Answer

A)  The engineering department has revised product specifications in responding to customer suggestions. 
B)  The company has signed a new union contract that increases the factory wages on average by $3.50 an hour. 
C)  Actual costs differed from standard costs for the preceding week. 
D)  The average price of raw materials increased from $4.68 per pound to $4.82 per pound. 
A)  The engineering department has revised product specifications in responding to customer suggestions. 
B)  The company has signed a new union contract that increases the factory wages on average by $3.50 an hour. 
C)  Actual costs differed from standard costs for the preceding week. 
D)  The average price of raw materials increased from $4.68 per pound to $4.82 per pound.

Question 7

Compute the standard cost for one pair of boots, based on the following standards for each pair of boots:
Standard material quantity: 1.25 yards of leather at $35.00 per yard
Standard labor: 9 hours at $25.75 per hour
Factory overhead: $1.75 per direct labor hour

Accepted Answer

The answer of Compute the standard cost for one pair...

Question 8

Ruby Company produces a chair that requires 5 yards of material per unit. The standard price of one yard of material is $7.50. During the month, 8,400 chairs were manufactured, using 43,700 yards at a cost of $7.30 per yard.
Determine the a) price variance, b) quantity variance, and c) total cost variance.

Accepted Answer

a) Price variance = $7.30 - $7

Question 9

Standard and actual costs for direct labor for the manufacture of 300 units of product were as follows:   Determine the direct labor a) time variance, b) rate variance, and c) total cost variance.

Accepted Answer

The answer of Standard and actual costs for direct labor...

Question 10

The following data is given for the Taylor Company:   Overhead is applied based on standard labor hours.
-Compute the direct labor rate and time variances for Taylor Company.

Accepted Answer

Direct labor rate variance: $6

Question 11

At the end of the fiscal year, the variances from standard are usually transferred to the finished goods account.

Accepted Answer

A) True 
 B)False

Question 12

Non-financial measures are often linked to the inputs or outputs of an activity or process.

Accepted Answer

A) True 
 B)False

Question 13

The standard factory overhead rate is $7.50 per machine hour $6.20 for variable factory overhead and $1.30 for fixed factory overhead) based on 100% of normal capacity of 80,000 machine hours. The standard cost and the actual cost of factory overhead for the production of 15,000 units during August were as follows:  
-What is the amount of the variable factory overhead controllable variance?

Accepted Answer

A)  $12,000 unfavorable 
B)  $12,000 favorable 
C)  $14,000 unfavorable 
D)  $26,000 unfavorable 
A)  $12,000 unfavorable 
B)  $12,000 favorable 
C)  $14,000 unfavorable 
D)  $26,000 unfavorable

Question 14

*Actual hours are equal to standard hours for units produced.
-The total factory overhead cost variance is

Accepted Answer

A)  $4,866.75 unfavorable 
B)  $4,866.75 favorable 
C)  $8,981.75 favorable 
D)  $8,981.75 unfavorable 
A)  $4,866.75 unfavorable 
B)  $4,866.75 favorable 
C)  $8,981.75 favorable 
D)  $8,981.75 unfavorable

Question 15

?If the actual quantity of direct materials used in producing a commodity differs from the standard quantity, the variance is a

Accepted Answer

A)  controllable variance 
B)  price variance 
C)  quantity variance 
D)  rate variance 
A)  controllable variance 
B)  price variance 
C)  quantity variance 
D)  rate variance

Question 16

Calculate the direct labor rate variance.

Accepted Answer

A)  $4,488.75 unfavorable 
B)  $6,851.25 favorable 
C)  $4,488.75 favorable 
D)  $6,851.25 unfavorable 
A)  $4,488.75 unfavorable 
B)  $6,851.25 favorable 
C)  $4,488.75 favorable 
D)  $6,851.25 unfavorable

Question 17

The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are Standard Costs
Direct materials
2,500 kilograms @ $8.50
Actual Costs
Direct materials
2,600 kilograms @ $8.75
The amount of the direct materials quantity variance is

Accepted Answer

A)  $875 favorable variance 
B)  $850 unfavorable variance 
C)  $850 favorable variance 
D)  $875 unfavorable variance 
A)  $875 favorable variance 
B)  $850 unfavorable variance 
C)  $850 favorable variance 
D)  $875 unfavorable variance

Question 18

Define ideal and currently attainable standards. Which type of standard should be used and why?

Accepted Answer

Ideal standards are standards that are o

Question 19

Currently attainable standards do not allow for reasonable production difficulties.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not a reason for a direct materials quantity variance?

Accepted Answer

A)  malfunctioning equipment 
B)  purchasing of inferior raw materials 
C)  increased material cost per unit 
D)  spoilage of materials 
A)  malfunctioning equipment 
B)  purchasing of inferior raw materials 
C)  increased material cost per unit 
D)  spoilage of materials

Exam 22: Performance Evaluation Using Variances From Standard Costs

Accounting systems that use standards for product costs are called budgeted cost systems.

Nonfinancial performance output measures are used to improve the input measures.

Ruby Company produces a chair that requires 5 yards of material per unit. The standard price of one yard of material is $7.60. During the month, 8,500 chairs were manufactured, using 40,000 yards at a cost of $7.50. Determine the a) price variance, b) quantity variance, and c) total cost variance.

The formula to compute the direct labor rate variance is to calculate the difference between

The direct labor rate variance is

Which of the following conditions normally would not indicate that standard costs should be revised?

Compute the standard cost for one pair of boots, based on the following standards for each pair of boots: Standard material quantity: 1.25 yards of leather at $35.00 per yard Standard labor: 9 hours at $25.75 per hour Factory overhead: $1.75 per direct labor hour

Standard and actual costs for direct labor for the manufacture of 300 units of product were as follows: Determine the direct labor a) time variance, b) rate variance, and c) total cost variance.

The following data is given for the Taylor Company: Overhead is applied based on standard labor hours. -Compute the direct labor rate and time variances for Taylor Company.

At the end of the fiscal year, the variances from standard are usually transferred to the finished goods account.

Non-financial measures are often linked to the inputs or outputs of an activity or process.

*Actual hours are equal to standard hours for units produced. -The total factory overhead cost variance is

?If the actual quantity of direct materials used in producing a commodity differs from the standard quantity, the variance is a

Calculate the direct labor rate variance.

The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are Standard Costs Direct materials 2,500 kilograms @ $8.50 Actual Costs Direct materials 2,600 kilograms @ $8.75 The amount of the direct materials quantity variance is

Define ideal and currently attainable standards. Which type of standard should be used and why?

Currently attainable standards do not allow for reasonable production difficulties.

Which of the following is not a reason for a direct materials quantity variance?

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

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