Question 1

Most companies that use standards set them at

Accepted Answer

A) the normal level. 
B) a conceivable level. 
C) the ideal level. 
D) last year's level. 
A) the normal level. 
B) a conceivable level. 
C) the ideal level. 
D) last year's level. A

Question 2

The investigation of a materials quantity variance usually begins in the

Accepted Answer

A) production department. 
B) purchasing department. 
C) sales department. 
D) controller's department. 
A) production department. 
B) purchasing department. 
C) sales department. 
D) controller's department. A

Question 3

The total standard cost to produce one unit of product is shown

Accepted Answer

A) at the bottom of the income statement. 
B) at the bottom of the balance sheet. 
C) on the standard cost card. 
D) in the Work in Process Inventory account. 
A) at the bottom of the income statement. 
B) at the bottom of the balance sheet. 
C) on the standard cost card. 
D) in the Work in Process Inventory account. C

Question 4

The investigation of a materials price variance usually begins in the

Accepted Answer

A) first production department. 
B) purchasing department. 
C) controller's office. 
D) accounts payable department. 
A) first production department. 
B) purchasing department. 
C) controller's office. 
D) accounts payable department.

Question 5

The fixed overhead variance that indicates whether plant facilities were efficiently used is the

Accepted Answer

A) budget variance. 
B) efficiency variance. 
C) spending variance. 
D) volume variance. 
A) budget variance. 
B) efficiency variance. 
C) spending variance. 
D) volume variance.

Question 6

In a standard cost variance report,

Accepted Answer

A) the largest unfavourable variance is the one that will impact on the company the most. 
B) the largest positive variance can be scanned and cleared the quickest. 
C) the trend or pattern of variances on a period-to-period basis should be monitored. 
D) management must set predetermined variance limits that will dictate what variances must be investigated. 
A) the largest unfavourable variance is the one that will impact on the company the most. 
B) the largest positive variance can be scanned and cleared the quickest. 
C) the trend or pattern of variances on a period-to-period basis should be monitored. 
D) management must set predetermined variance limits that will dictate what variances must be investigated.

Question 7

A standard cost system may be used with

Accepted Answer

A) job order costing only. 
B) process costing only. 
C) activity-based costing. 
D) either job order or process costing. 
A) job order costing only. 
B) process costing only. 
C) activity-based costing. 
D) either job order or process costing.

Question 8

Under a standard costing system, manufacturing overhead costs are applied to work in process on the basis of

Accepted Answer

A) actual hours worked. 
B) standard hours allowed. 
C) ratio of actual variable to fixed costs. 
D) actual overhead costs incurred. 
A) actual hours worked. 
B) standard hours allowed. 
C) ratio of actual variable to fixed costs. 
D) actual overhead costs incurred.

Question 9

When a company implements a balanced scorecard approach in its business,

Accepted Answer

A) it must ensure that it focuses on every aspect of its operations. 
B) it must ensure that only one or two areas is seen as the focus. 
C) it must establish performance measures that are focused on the specific strategy of the company. 
D) it must never supplant the traditional accounting information that is available to management. 
A) it must ensure that it focuses on every aspect of its operations. 
B) it must ensure that only one or two areas is seen as the focus. 
C) it must establish performance measures that are focused on the specific strategy of the company. 
D) it must never supplant the traditional accounting information that is available to management.

Question 10

Standard costs

Accepted Answer

A) may show past cost experience. 
B) help establish expected future costs. 
C) are the budgeted costs per unit in the present. 
D) all of these. 
A) may show past cost experience. 
B) help establish expected future costs. 
C) are the budgeted costs per unit in the present. 
D) all of these.

Question 11

A materials quantity variance is calculated as the difference between the standard direct materials price and the actual direct materials price multiplied by the actual quantity of direct materials used.

Accepted Answer

A) True 
 B)False

Question 12

EKPN Co.produces wooden boxes.The company's standards per box require 6 boards, each costing $10 per board, and half of an hour of direct labour.The standard labour rate is $15 per hour.In August, EKPN Co.Purchased 12,000 boards for a total cost of $123,000.It used 11,500 boards to manufacture 1,900 boxes.Total labour hours were 1,000 hours, and total labour costs were $16,250. What was the total labour variance for August?

Accepted Answer

A) $1.25 F 
B) $1.25 U 
C) $2,000 F 
D) $2,000 U 
A) $1.25 F 
B) $1.25 U 
C) $2,000 F 
D) $2,000 U

Question 13

The total overhead budget variance is equal to the

Accepted Answer

A) sum of the total materials variance and the total labour variance. 
B) difference between the total materials variance and the total labour variance. 
C) difference between the actual overhead costs and the overhead costs applied to the work done. 
D) total variance minus the spending variance and the volume variance. 
A) sum of the total materials variance and the total labour variance. 
B) difference between the total materials variance and the total labour variance. 
C) difference between the actual overhead costs and the overhead costs applied to the work done. 
D) total variance minus the spending variance and the volume variance.

Question 14

The formula for the materials price variance is

Accepted Answer

A) (AQ × SP)- (SQ × SP). 
B) (AQ × AP)- (AQ × SP). 
C) (AQ × AP)- (SQ × SP). 
D) (AQ × SP)- (SQ × AP). 
A) (AQ × SP)- (SQ × SP). 
B) (AQ × AP)- (AQ × SP). 
C) (AQ × AP)- (SQ × SP). 
D) (AQ × SP)- (SQ × AP).

Question 15

Labour efficiency is measured by the

Accepted Answer

A) materials quantity variance. 
B) total labour variance. 
C) labour quantity variance. 
D) labour rate variance. 
A) materials quantity variance. 
B) total labour variance. 
C) labour quantity variance. 
D) labour rate variance.

Question 16

A company uses 40,000 kilograms of materials for which they paid $9.00 a kilogram.The materials price variance was $80,000 favourable.What is the standard price per kilogram?

Accepted Answer

A) $2.00 
B) $7.00 
C) $10.00 
D) $11.00 
A) $2.00 
B) $7.00 
C) $10.00 
D) $11.00

Question 17

The direct materials quantity standard should

Accepted Answer

A) exclude unavoidable waste. 
B) exclude quality considerations. 
C) allow for normal spoilage. 
D) always be expressed as an ideal standard. 
A) exclude unavoidable waste. 
B) exclude quality considerations. 
C) allow for normal spoilage. 
D) always be expressed as an ideal standard.

Question 18

EKPN Co.produces wooden boxes.The company's standards per box require 6 boards, each costing $10 per board, and half of an hour of direct labour.The standard labour rate is $15 per hour.In August, EKPN Co.Purchased 12,000 boards for a total cost of $123,000.It used 11,500 boards to manufacture 1,900 boxes.Total labour hours were 1,000 hours, and total labour costs were $16,250.What was the material quantity variance for August?

Accepted Answer

A) $5,000 U 
B) $5,000 F 
C) $1,000 U 
D) $1,000 F 
A) $5,000 U 
B) $5,000 F 
C) $1,000 U 
D) $1,000 F

Question 19

Which of the following statements is FALSE?

Accepted Answer

A) The overhead volume variance indicates whether plant facilities were used efficiently during the period. 
B) The costs that cause the overhead volume variance are usually controllable costs. 
C) The overhead volume variance relates solely to fixed costs. 
D) The overhead volume variance is favourable if standard hours allowed for output are greater than the standard hours at normal capacity. 
A) The overhead volume variance indicates whether plant facilities were used efficiently during the period. 
B) The costs that cause the overhead volume variance are usually controllable costs. 
C) The overhead volume variance relates solely to fixed costs. 
D) The overhead volume variance is favourable if standard hours allowed for output are greater than the standard hours at normal capacity.

Question 20

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.

Most companies that use standards set them at

The investigation of a materials quantity variance usually begins in the

The total standard cost to produce one unit of product is shown

The investigation of a materials price variance usually begins in the

The fixed overhead variance that indicates whether plant facilities were efficiently used is the

In a standard cost variance report,

A standard cost system may be used with

Under a standard costing system, manufacturing overhead costs are applied to work in process on the basis of

When a company implements a balanced scorecard approach in its business,

Standard costs

A materials quantity variance is calculated as the difference between the standard direct materials price and the actual direct materials price multiplied by the actual quantity of direct materials used.

The total overhead budget variance is equal to the

The formula for the materials price variance is

Labour efficiency is measured by the

A company uses 40,000 kilograms of materials for which they paid $9.00 a kilogram.The materials price variance was $80,000 favourable.What is the standard price per kilogram?

The direct materials quantity standard should

Which of the following statements is FALSE?

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

Managerial Accounting

Managerial Cost Concepts and Cost Behaviour Analysis

Job Order Costing

Process Costing

Activity-Based-Costing

Cost-Volume-Profit

Incremental Analysis

Alternative Inventory Costing Methods: a Decision-Making Perspective

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Planning for Capital Investments

Filters

Exam 12: Standard Costs and Balanced Scorecard

Most companies that use standards set them at

The investigation of a materials quantity variance usually begins in the

The total standard cost to produce one unit of product is shown

The investigation of a materials price variance usually begins in the

The fixed overhead variance that indicates whether plant facilities were efficiently used is the

In a standard cost variance report,

A standard cost system may be used with

Under a standard costing system, manufacturing overhead costs are applied to work in process on the basis of

When a company implements a balanced scorecard approach in its business,

Standard costs

A materials quantity variance is calculated as the difference between the standard direct materials price and the actual direct materials price multiplied by the actual quantity of direct materials used.

The total overhead budget variance is equal to the

The formula for the materials price variance is

Labour efficiency is measured by the

A company uses 40,000 kilograms of materials for which they paid $9.00 a kilogram.The materials price variance was $80,000 favourable.What is the standard price per kilogram?

The direct materials quantity standard should

Which of the following statements is FALSE?

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

Managerial Accounting

Managerial Cost Concepts and Cost Behaviour Analysis

Job Order Costing

Process Costing

Activity-Based-Costing

Cost-Volume-Profit

Incremental Analysis

Alternative Inventory Costing Methods: a Decision-Making Perspective

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Planning for Capital Investments

Filters