Question 1

Standard costs are divided into which of the following components?

Accepted Answer

A)  variance standard and quantity standard 
B)  materials standard and labor standard 
C)  quality standard and quantity standard 
D)  price standard and quantity standard 
A)  variance standard and quantity standard 
B)  materials standard and labor standard 
C)  quality standard and quantity standard 
D)  price standard and quantity standard

Question 2

Match the following formulas or descriptions with the term a-e) it defines.
-Standard variable overhead for actual units produced

Accepted Answer

A) Direct materials price variance 
B) Direct labor rate variance 
C) Direct labor time variance 
D) Direct materials quantity variance 
E) Budgeted variable factory overhead 
A) Direct materials price variance 
B) Direct labor rate variance 
C) Direct labor time variance 
D) Direct materials quantity variance 
E) Budgeted variable factory overhead

Question 3

Financial reporting systems that are guided by the principle of exceptions concept focus attention on variances from standard costs.

Accepted Answer

A) True 
 B)False

Question 4

Match the following descriptions with the term a-e) it describes:
-an example is the number of customer complaints

Accepted Answer

A) Ideal standard 
B) Nonfinancial performance measure 
C) Currently attainable standard 
D) Unfavorable cost variance 
E) Favorable cost variance 
A) Ideal standard 
B) Nonfinancial performance measure 
C) Currently attainable standard 
D) Unfavorable cost variance 
E) Favorable cost variance

Question 5

Titus Company produced 8,900 units of a product that required 3.25 standard hours per unit. The standard fixed overhead cost per unit is $1.20 per hour at 29,000 hours, which is 100% of normal capacity.
Determine the fixed factory overhead volume variance.

Accepted Answer

The fixed factory overhead vol

Question 6

Sally's Chocolate Company makes gourmet cupcakes which are sold by the dozen. Compute the standard cost for one dozen cupcakes, based on the following standards:

Accepted Answer

The answer of Sally's Chocolate Company makes gourmet cupcakes which...

Question 7

Morocco Desk Co. purchases 6,000 feet of lumber at $6.00 per foot. The standard price for direct materials is $5.00. The entry to record the purchase and unfavorable direct materials price variance is

Accepted Answer

A)  Direct Materials 30,000
Direct Materials Price Variance Accounts Payable
6,000
36,000 
B)  Direct Materials Accounts Payable
30,000
30,000 
C)  Direct Materials Direct Materials Price Variance
36,000
6,000
Accounts Payable
30,000 
D)  Work in Process Direct Materials Price Variance
36,000
6,000
Accounts Payable
30,000 
A)  Direct Materials 30,000
Direct Materials Price Variance Accounts Payable
6,000
36,000 
B)  Direct Materials Accounts Payable
30,000
30,000 
C)  Direct Materials Direct Materials Price Variance
36,000
6,000
Accounts Payable
30,000 
D)  Work in Process Direct Materials Price Variance
36,000
6,000
Accounts Payable
30,000

Question 8

The amount of the fixed factory overhead volume variance is

Accepted Answer

A)  $2,000 favorable 
B)  $2,000 unfavorable 
C)  $2,500 unfavorable 
D)  $0 
A)  $2,000 favorable 
B)  $2,000 unfavorable 
C)  $2,500 unfavorable 
D)  $0

Question 9

The following data is given for the Stringer Company:   Overhead is applied on standard labor hours.
-The direct materials quantity variance is

Accepted Answer

A)  22,800 favorable 
B)  22,800 unfavorable 
C)  52,000 favorable 
D)  52,000 unfavorable 
A)  22,800 favorable 
B)  22,800 unfavorable 
C)  52,000 favorable 
D)  52,000 unfavorable

Question 10

Standards are performance goals used to evaluate and control operations.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Hint: Determine units produced at normal capacity.)

Accepted Answer

The answer of Hint: Determine units produced at normal capacity.)...

Question 13

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual was 800 units at $12, the direct materials quantity variance was $2,200 unfavorable.

Accepted Answer

A) True 
 B)False

Question 14

If the price paid per unit differs from the standard price per unit for direct materials, the variance is a

Accepted Answer

A)  variable variance 
B)  controllable variance 
C)  price variance 
D)  volume variance 
A)  variable variance 
B)  controllable variance 
C)  price variance 
D)  volume variance

Question 15

The standard factory overhead rate is $10 per direct labor hour $8 for variable factory overhead and $2 for fixed factory overhead) based on 100% of normal capacity of 30,000 direct labor hours. The standard cost and the actual cost of factory overhead for the production of 5,000 units during May were as follows:  
-What is the amount of the fixed factory overhead volume variance?

Accepted Answer

A)  $12,500 favorable 
B)  $10,000 unfavorable 
C)  $12,500 unfavorable 
D)  $10,000 favorable 
A)  $12,500 favorable 
B)  $10,000 unfavorable 
C)  $12,500 unfavorable 
D)  $10,000 favorable

Question 16

Calculate the total direct labor variance.

Accepted Answer

A)  $2,051.25 favorable 
B)  $2,051.25 unfavorable 
C)  $2,362.50 unfavorable 
D)  $2,362.50 favorable 
A)  $2,051.25 favorable 
B)  $2,051.25 unfavorable 
C)  $2,362.50 unfavorable 
D)  $2,362.50 favorable

Question 17

A favorable cost variance occurs when actual cost is less than budgeted cost at actual volumes.

Accepted Answer

A) True 
 B)False

Question 18

The principle of exceptions allows managers to focus on correcting variances between standard costs and actual costs.

Accepted Answer

A) True 
 B)False

Question 19

If the standard to produce a given amount of product is 600 direct labor hours at $15 and the actual was 600 hours at $17, the rate variance was $1,200 unfavorable.

Accepted Answer

A) True 
 B)False

Question 20

The direct labor time variance is

Accepted Answer

A)  $6,000 favorable 
B)  $6,000 unfavorable 
C)  $33,000 unfavorable 
D)  $33,000 favorable 
A)  $6,000 favorable 
B)  $6,000 unfavorable 
C)  $33,000 unfavorable 
D)  $33,000 favorable

Exam 22: Performance Evaluation Using Variances From Standard Costs

Standard costs are divided into which of the following components?

Match the following formulas or descriptions with the term a-e) it defines. -Standard variable overhead for actual units produced

Financial reporting systems that are guided by the principle of exceptions concept focus attention on variances from standard costs.

Match the following descriptions with the term a-e) it describes: -an example is the number of customer complaints

Titus Company produced 8,900 units of a product that required 3.25 standard hours per unit. The standard fixed overhead cost per unit is $1.20 per hour at 29,000 hours, which is 100% of normal capacity. Determine the fixed factory overhead volume variance.

Sally's Chocolate Company makes gourmet cupcakes which are sold by the dozen. Compute the standard cost for one dozen cupcakes, based on the following standards:

Morocco Desk Co. purchases 6,000 feet of lumber at $6.00 per foot. The standard price for direct materials is $5.00. The entry to record the purchase and unfavorable direct materials price variance is

The amount of the fixed factory overhead volume variance is

The following data is given for the Stringer Company: Overhead is applied on standard labor hours. -The direct materials quantity variance is

Standards are performance goals used to evaluate and control operations.

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

Hint: Determine units produced at normal capacity.)

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual was 800 units at $12, the direct materials quantity variance was $2,200 unfavorable.

If the price paid per unit differs from the standard price per unit for direct materials, the variance is a

Calculate the total direct labor variance.

A favorable cost variance occurs when actual cost is less than budgeted cost at actual volumes.

The principle of exceptions allows managers to focus on correcting variances between standard costs and actual costs.

If the standard to produce a given amount of product is 600 direct labor hours at $15 and the actual was 600 hours at $17, the rate variance was $1,200 unfavorable.

The direct labor time variance is

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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