Question 1

A negative fixed overhead volume variance can be caused due to the following except

Accepted Answer

A)  sales orders at a low level 
B)  machine breakdowns 
C)  employee inexperience 
D)  increase in utility costs 
A)  sales orders at a low level 
B)  machine breakdowns 
C)  employee inexperience 
D)  increase in utility costs

Question 2

Calculate the total direct materials cost variance.

Accepted Answer

A)  $9,262.50 unfavorable 
B)  $9,262.50 favorable 
C)  $3,780.00 unfavorable 
D)  $3,562.50 favorable 
A)  $9,262.50 unfavorable 
B)  $9,262.50 favorable 
C)  $3,780.00 unfavorable 
D)  $3,562.50 favorable

Question 3

Myers Corporation has the following data related to direct materials costs for November: actual costs for 5,000 pounds of material at $4.50; and standard costs for 4,800 pounds of material at $5.10 per pound. What is the direct materials quantity variance?

Accepted Answer

A)  $1,020 favorable 
B)  $1,020 unfavorable 
C)  $900 favorable 
D)  $900 unfavorable 
A)  $1,020 favorable 
B)  $1,020 unfavorable 
C)  $900 favorable 
D)  $900 unfavorable

Question 4

A company records inventory purchases at standard cost and also records purchase price variances. Prepare the journal entry for a purchase of 6,000 widgets that were bought at $8.00 and have a standard cost of $8.15.

Accepted Answer

The answer of A company records inventory purchases at standard...

Question 5

The standard costs and actual costs for direct materials for the manufacture of 3,000 actual units of product are Standard Costs
Direct materials per completed unit)1,040 kilograms at $8.75
Actual Costs
Direct materials
2,000 kilograms at $8.00
The amount of direct materials price variance is

Accepted Answer

A)  $2,750 unfavorable variance 
B)  $2,750 favorable variance 
C)  $1,500 favorable variance 
D)  $1,500 unfavorable variance 
A)  $2,750 unfavorable variance 
B)  $2,750 favorable variance 
C)  $1,500 favorable variance 
D)  $1,500 unfavorable variance

Question 6

Periodic comparisons between planned objectives and actual performance are reported in:

Accepted Answer

A)  zero-base reports 
B)  budget performance reports 
C)  master budgets 
D)  budgets 
A)  zero-base reports 
B)  budget performance reports 
C)  master budgets 
D)  budgets

Question 7

An example of a nonfinancial measure is the number of customer complaints.

Accepted Answer

A) True 
 B)False

Question 8

The following data is given for the Zoyza Company:   Overhead is applied on standard labor hours.
-The fixed factory overhead volume variance is

Accepted Answer

A)  $73,250 unfavorable 
B)  $73,250 favorable 
C)  $59,400 favorable 
D)  $59,400 unfavorable 
A)  $73,250 unfavorable 
B)  $73,250 favorable 
C)  $59,400 favorable 
D)  $59,400 unfavorable

Question 9

The most effective means of presenting standard factory overhead cost variance data is through a factory overhead cost variance report.

Accepted Answer

A) True 
 B)False

Question 10

The standard price and quantity of direct materials are separated because

Accepted Answer

A)  GAAP and IFRS reporting requires separation 
B)  direct materials prices are controlled by the purchasing department and quantity used is controlled by the production department 
C)  standard prices are more difficult to estimate than standard quantities 
D)  standard quantities change more frequently than standard prices 
A)  GAAP and IFRS reporting requires separation 
B)  direct materials prices are controlled by the purchasing department and quantity used is controlled by the production department 
C)  standard prices are more difficult to estimate than standard quantities 
D)  standard quantities change more frequently than standard prices

Question 11

Standard cost variances are usually not reported in reports to stockholders.

Accepted Answer

A) True 
 B)False

Question 12

Robin Company purchased and used 500 pounds of direct materials to produce a product with a 520 pound standard direct materials requirement. The standard materials price is $1.90 per pound. The actual materials price was $2.00 per pound.
Prepare the journal entries to record 1) the purchase of the materials and 2) the material entering production.
   Materials (500 × $1.90)950
Direct Materials Price Variance (500 × $0.10)50
Accounts Payable (500 × $2.00)1,000

Accepted Answer

The answer of Robin Company purchased and used 500 pounds...

Question 13

Define nonfinancial performance measures. What are they used for and what are some common examples?

Accepted Answer

Nonfinancial performance measures evalua

Question 14

Volume variance measures the use of fixed factory overhead resources.

Accepted Answer

A) True 
 B)False

Question 15

The labor time variance is

Accepted Answer

A)  $9,880 favorable 
B)  $9,880 unfavorable 
C)  $7,800 unfavorable 
D)  $7,800 favorable 
A)  $9,880 favorable 
B)  $9,880 unfavorable 
C)  $7,800 unfavorable 
D)  $7,800 favorable

Question 16

Standards are designed to evaluate price and quantity variances separately.

Accepted Answer

A) True 
 B)False

Question 17

The controllable variance measures

Accepted Answer

A)  operating results at less than normal capacity 
B)  the efficiency of using variable overhead resources 
C)  operating results at more than normal capacity 
D)  control over fixed overhead costs 
A)  operating results at less than normal capacity 
B)  the efficiency of using variable overhead resources 
C)  operating results at more than normal capacity 
D)  control over fixed overhead costs

Question 18

What is the direct labor rate variance?

Accepted Answer

A)  $14,000 favorable 
B)  $14,000 unfavorable 
C)  $15,400 favorable 
D)  $15,400 unfavorable 
A)  $14,000 favorable 
B)  $14,000 unfavorable 
C)  $15,400 favorable 
D)  $15,400 unfavorable

Question 19

One reason not to depend solely on historical records to set standards is that there may be inefficiencies contained in past costs.

Accepted Answer

A) True 
 B)False

Question 20

Favorable fixed factory overhead volume variances are never harmful, since achieving them encourages managers to run the factory above normal capacity.

Accepted Answer

A) True 
 B)False

Exam 22: Performance Evaluation Using Variances From Standard Costs

A negative fixed overhead volume variance can be caused due to the following except

Calculate the total direct materials cost variance.

Myers Corporation has the following data related to direct materials costs for November: actual costs for 5,000 pounds of material at $4.50; and standard costs for 4,800 pounds of material at $5.10 per pound. What is the direct materials quantity variance?

A company records inventory purchases at standard cost and also records purchase price variances. Prepare the journal entry for a purchase of 6,000 widgets that were bought at $8.00 and have a standard cost of $8.15.

The standard costs and actual costs for direct materials for the manufacture of 3,000 actual units of product are Standard Costs Direct materials per completed unit)1,040 kilograms at $8.75 Actual Costs Direct materials 2,000 kilograms at $8.00 The amount of direct materials price variance is

Periodic comparisons between planned objectives and actual performance are reported in:

An example of a nonfinancial measure is the number of customer complaints.

The following data is given for the Zoyza Company: Overhead is applied on standard labor hours. -The fixed factory overhead volume variance is

The most effective means of presenting standard factory overhead cost variance data is through a factory overhead cost variance report.

The standard price and quantity of direct materials are separated because

Standard cost variances are usually not reported in reports to stockholders.

Define nonfinancial performance measures. What are they used for and what are some common examples?

Volume variance measures the use of fixed factory overhead resources.

The labor time variance is

Standards are designed to evaluate price and quantity variances separately.

The controllable variance measures

What is the direct labor rate variance?

One reason not to depend solely on historical records to set standards is that there may be inefficiencies contained in past costs.

Favorable fixed factory overhead volume variances are never harmful, since achieving them encourages managers to run the factory above normal capacity.

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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