Question 1

When analyzing period end variance reports, if a variance amount is small the manager should

Accepted Answer

A) consider the variance within normal terms and ignore it for that period. 
B) combine all such small variances and if they show a larger variance, investigate them then. 
C) consider investigating the variance as there may be undetected swings in the intervening period that require investigation. 
D) focus his or her attention on more material variances. 
A) consider the variance within normal terms and ignore it for that period. 
B) combine all such small variances and if they show a larger variance, investigate them then. 
C) consider investigating the variance as there may be undetected swings in the intervening period that require investigation. 
D) focus his or her attention on more material variances.

Question 2

If the labour quantity variance is unfavourable and the cause is inefficient use of direct labour, the responsibility rests with the

Accepted Answer

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

Question 3

A favourable variance

Accepted Answer

A) is an indication that the company is not operating in an optimal manner. 
B) implies a positive result if quality control standards are met. 
C) implies a positive result if standards are flexible. 
D) means that standards are too loosely specified. 
A) is an indication that the company is not operating in an optimal manner. 
B) implies a positive result if quality control standards are met. 
C) implies a positive result if standards are flexible. 
D) means that standards are too loosely specified.

Question 4

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 materials price variance for August?

Accepted Answer

A) $3,000 F 
B) $3,000 U 
C) $ 8,000 F 
D) $8,000 U 
A) $3,000 F 
B) $3,000 U 
C) $ 8,000 F 
D) $8,000 U

Question 5

The spending variance relates to

Accepted Answer

A) fixed overhead costs. 
B) variable overhead costs. 
C) both fixed and variable overhead costs. 
D) all manufacturing costs. 
A) fixed overhead costs. 
B) variable overhead costs. 
C) both fixed and variable overhead costs. 
D) all manufacturing costs.

Question 6

Which of the following is true?

Accepted Answer

A) In developing a standard cost for direct materials, a price factor and a quantity factor must be considered. 
B) A direct labour price standard is frequently called the direct labour efficiency standard. 
C) The standard predetermined overhead rate must be based on direct labour hours as the standard activity index. 
D) The direct materials price standard should be based on the production department's best estimate of the cost of raw material. 
A) In developing a standard cost for direct materials, a price factor and a quantity factor must be considered. 
B) A direct labour price standard is frequently called the direct labour efficiency standard. 
C) The standard predetermined overhead rate must be based on direct labour hours as the standard activity index. 
D) The direct materials price standard should be based on the production department's best estimate of the cost of raw material.

Question 7

Use the following information for questions
A company developed the following per-unit standards for its product: 5 kilograms of direct materials at $3 per kilogram.Last month, 1,000 kilograms of direct materials were purchased for $2,900.Also last month, 700 kilograms of direct materials were used to produce 135 units.
-What was the direct materials quantity variance for last month?

Accepted Answer

A) $75 unfavourable 
B) $75 favourable 
C) $900 unfavourable 
D) $900 favourable 
A) $75 unfavourable 
B) $75 favourable 
C) $900 unfavourable 
D) $900 favourable

Question 8

Standard cost + price variance + quantity variance = budgeted cost.

Accepted Answer

A) True 
 B)False

Question 9

Under a standard costing system, the materials price variance is recorded

Accepted Answer

A) at the end of the accounting period. 
B) when materials are purchased. 
C) when materials are issued to production. 
D) at the beginning of the accounting period. 
A) at the end of the accounting period. 
B) when materials are purchased. 
C) when materials are issued to production. 
D) at the beginning of the accounting period.

Question 10

The budgeted overhead costs for standard hours allowed and the overhead costs applied to the product are the same amount

Accepted Answer

A) for both variable and fixed overhead costs. 
B) only when standard hours allowed is less than normal capacity. 
C) for variable overhead costs. 
D) for fixed overhead costs. 
A) for both variable and fixed overhead costs. 
B) only when standard hours allowed is less than normal capacity. 
C) for variable overhead costs. 
D) for fixed overhead costs.

Question 11

The standard rate of pay is $15 per direct labour hour.If the actual direct labour payroll was $58,800 for 4,000 direct labour hours worked, the direct labour price (rate)variance is

Accepted Answer

A) $1,200 unfavourable. 
B) $1,200 favourable. 
C) $1,500 unfavourable. 
D) $1,500 favourable. 
A) $1,200 unfavourable. 
B) $1,200 favourable. 
C) $1,500 unfavourable. 
D) $1,500 favourable.

Question 12

Which of the following statements is FALSE?

Accepted Answer

A) A standard cost is more accurate than a budgeted cost. 
B) A standard is a unit amount. 
C) In concept, standards and budgets are essentially the same. 
D) The standard cost of a product is equivalent to the budgeted cost per unit of product. 
A) A standard cost is more accurate than a budgeted cost. 
B) A standard is a unit amount. 
C) In concept, standards and budgets are essentially the same. 
D) The standard cost of a product is equivalent to the budgeted cost per unit of product.

Question 13

Which of the following would generally not be a cause to adjust standard cost rates in a service industry?

Accepted Answer

A) wage rate increase for the cleaners 
B) electricity charges from the municipality 
C) salary increases for management 
D) cleaning supplies increases from suppliers 
A) wage rate increase for the cleaners 
B) electricity charges from the municipality 
C) salary increases for management 
D) cleaning supplies increases from suppliers

Question 14

Income statements prepared internally for management often show cost of goods sold at standard cost and variances are

Accepted Answer

A) separately disclosed. 
B) deducted as other expenses and revenues. 
C) added to cost of goods sold. 
D) closed directly to retained earnings. 
A) separately disclosed. 
B) deducted as other expenses and revenues. 
C) added to cost of goods sold. 
D) closed directly to retained earnings.

Question 15

Variance reports are

Accepted Answer

A) external financial reports. 
B) Revenue Canada tax reports. 
C) internal reports for management. 
D) all of these. 
A) external financial reports. 
B) Revenue Canada tax reports. 
C) internal reports for management. 
D) all of these.

Question 16

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 17

If standard cost reports emphasize meeting predetermined standards

Accepted Answer

A) there should be non-financial performance measures available to management to supplement the cost reports. 
B) management can control the department properly with standard cost reports. 
C) the budget process should be sufficient to support management's performance. 
D) all members of the team will be able to properly identify critical variance issues. 
A) there should be non-financial performance measures available to management to supplement the cost reports. 
B) management can control the department properly with standard cost reports. 
C) the budget process should be sufficient to support management's performance. 
D) all members of the team will be able to properly identify critical variance issues.

Question 18

The direct labour quantity standard is sometimes called the direct labour

Accepted Answer

A) volume standard. 
B) effectiveness standard. 
C) efficiency standard. 
D) quality standard. 
A) volume standard. 
B) effectiveness standard. 
C) efficiency standard. 
D) quality standard.

Question 19

Use the following information for questions 
Bridgeware Company has a materials price standard of $2.50 per kilogram.Four thousand kilograms of materials were purchased at $2.40 a kilogram.The actual quantity of materials used was 3,500 kilograms, although the standard quantity allowed for the output was 3,400 kilograms.
-Bridgeware Company's materials quantity variance is

Accepted Answer

A) $250 U. 
B) $250 F. 
C) $340 F. 
D) $340 U. 
A) $250 U. 
B) $250 F. 
C) $340 F. 
D) $340 U.

Question 20

One problem with standard cost reports is

Accepted Answer

A) they can only be read effectively by trained accountants. 
B) they are often prepared well after the events that give rise to them. 
C) not everyone in the organization can agree on their use. 
D) they allow for shareholders to ask difficult questions from management. 
A) they can only be read effectively by trained accountants. 
B) they are often prepared well after the events that give rise to them. 
C) not everyone in the organization can agree on their use. 
D) they allow for shareholders to ask difficult questions from management.

When analyzing period end variance reports, if a variance amount is small the manager should

If the labour quantity variance is unfavourable and the cause is inefficient use of direct labour, the responsibility rests with the

A favourable variance

The spending variance relates to

Which of the following is true?

Standard cost + price variance + quantity variance = budgeted cost.

Under a standard costing system, the materials price variance is recorded

The budgeted overhead costs for standard hours allowed and the overhead costs applied to the product are the same amount

The standard rate of pay is $15 per direct labour hour.If the actual direct labour payroll was $58,800 for 4,000 direct labour hours worked, the direct labour price (rate)variance is

Which of the following statements is FALSE?

Which of the following would generally not be a cause to adjust standard cost rates in a service industry?

Income statements prepared internally for management often show cost of goods sold at standard cost and variances are

Variance reports are

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

If standard cost reports emphasize meeting predetermined standards

The direct labour quantity standard is sometimes called the direct labour

One problem with standard cost reports is

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

When analyzing period end variance reports, if a variance amount is small the manager should

If the labour quantity variance is unfavourable and the cause is inefficient use of direct labour, the responsibility rests with the

A favourable variance

The spending variance relates to

Which of the following is true?

Standard cost + price variance + quantity variance = budgeted cost.

Under a standard costing system, the materials price variance is recorded

The budgeted overhead costs for standard hours allowed and the overhead costs applied to the product are the same amount

The standard rate of pay is $15 per direct labour hour.If the actual direct labour payroll was $58,800 for 4,000 direct labour hours worked, the direct labour price (rate)variance is

Which of the following statements is FALSE?

Which of the following would generally not be a cause to adjust standard cost rates in a service industry?

Income statements prepared internally for management often show cost of goods sold at standard cost and variances are

Variance reports are

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

If standard cost reports emphasize meeting predetermined standards

The direct labour quantity standard is sometimes called the direct labour

One problem with standard cost reports is

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