Question 1

A problem with placing excessive emphasis on labour efficiency can be

Accepted Answer

A) material costs get ignored. 
B) pressure can be put on workers to work unsafely. 
C) overhead costs can be improperly estimated. 
D) work in progress and finished goods inventories can build up beyond acceptable levels. 
A) material costs get ignored. 
B) pressure can be put on workers to work unsafely. 
C) overhead costs can be improperly estimated. 
D) work in progress and finished goods inventories can build up beyond acceptable levels.

Question 2

Which of the following statements about overhead variances is FALSE?

Accepted Answer

A) The difference between the budgeted fixed overhead and the fixed overhead applied is the volume variance. 
B) Standard hours allowed are used in calculating the volume variance. 
C) The spending variance pertains solely to fixed costs. 
D) The total overhead variance pertains to both variable and fixed costs. 
A) The difference between the budgeted fixed overhead and the fixed overhead applied is the volume variance. 
B) Standard hours allowed are used in calculating the volume variance. 
C) The spending variance pertains solely to fixed costs. 
D) The total overhead variance pertains to both variable and fixed costs.

Question 3

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 price variance for last month?

Accepted Answer

A) $12,100 favourable 
B) $100 favourable 
C) $12,100 unfavourable 
D) $100 unfavourable 
A) $12,100 favourable 
B) $100 favourable 
C) $12,100 unfavourable 
D) $100 unfavourable

Question 4

The difference between actual overhead costs and overhead costs applied is the

Accepted Answer

A) budget variance. 
B) spending variance. 
C) total overhead variance. 
D) volume variance. 
A) budget variance. 
B) spending variance. 
C) total overhead variance. 
D) volume variance.

Question 5

The matrix approach to variance analysis

Accepted Answer

A) will yield slightly different variances than the formula approach. 
B) is more accurate than the formula approach. 
C) does not separate the price and quantity variance calculations. 
D) provides a convenient structure for determining each variance. 
A) will yield slightly different variances than the formula approach. 
B) is more accurate than the formula approach. 
C) does not separate the price and quantity variance calculations. 
D) provides a convenient structure for determining each variance.

Question 6

A good system of standard costing always

Accepted Answer

A) ensures that the right staff are to blame if there are negative variances. 
B) ensures that the right staff are both rewarded and blamed when there are positive or negative variances. 
C) avoids excessive detail in examining small variances. 
D) considers the impact of morale on all those who utilize the reporting system. 
A) ensures that the right staff are to blame if there are negative variances. 
B) ensures that the right staff are both rewarded and blamed when there are positive or negative variances. 
C) avoids excessive detail in examining small variances. 
D) considers the impact of morale on all those who utilize the reporting system.

Question 7

There could be instances where the production department is responsible for a direct materials price variance.

Accepted Answer

A) True 
 B)False

Question 8

An unfavourable labour quantity variance may be caused by

Accepted Answer

A) paying workers higher wages than expected. 
B) paying workers a bonus at year end. 
C) worker fatigue or carelessness. 
D) higher pay rates mandated by union contracts. 
A) paying workers higher wages than expected. 
B) paying workers a bonus at year end. 
C) worker fatigue or carelessness. 
D) higher pay rates mandated by union contracts.

Question 9

Which of the following could cause a debit balance in the direct material price variance accounts?

Accepted Answer

A) paying more than the standard price per unit for direct material 
B) paying less than the standard price per unit for direct material 
C) using more than the standard quantity of direct material 
D) using less than the standard quantity of direct material 
A) paying more than the standard price per unit for direct material 
B) paying less than the standard price per unit for direct material 
C) using more than the standard quantity of direct material 
D) using less than the standard quantity of direct material

Question 10

Which of the following statements about standard costs is FALSE?

Accepted Answer

A) Properly set standards should promote efficiency. 
B) Standard costs facilitate management planning. 
C) Standards should not be used in "management by exception." 
D) Standard costs can simplify the costing of inventories. 
A) Properly set standards should promote efficiency. 
B) Standard costs facilitate management planning. 
C) Standards should not be used in "management by exception." 
D) Standard costs can simplify the costing of inventories.

Question 11

The fixed overhead spending variance is calculated as the difference between actual overhead costs incurred and the budgeted

Accepted Answer

A) overhead costs for the standard hours allowed. 
B) overhead costs applied to the product. 
C) overhead costs at the normal level of activity. 
D) fixed overhead costs. 
A) overhead costs for the standard hours allowed. 
B) overhead costs applied to the product. 
C) overhead costs at the normal level of activity. 
D) fixed overhead costs.

Question 12

Which of the following statements describes the customer perspective in the balanced scorecard?

Accepted Answer

A) It establishes which people should be targeted as potential customers. 
B) It evaluates the profitability of specific customers rather than the profitability of specific products or services. 
C) It evaluates how well the company is performing from the viewpoint of those people who buy and use its products or services. 
D) It evaluates which customers are not profitable and should be dropped. 
A) It establishes which people should be targeted as potential customers. 
B) It evaluates the profitability of specific customers rather than the profitability of specific products or services. 
C) It evaluates how well the company is performing from the viewpoint of those people who buy and use its products or services. 
D) It evaluates which customers are not profitable and should be dropped.

Question 13

The total materials variance is equal to the

Accepted Answer

A) materials price variance. 
B) difference between the materials price variance and materials quantity variance. 
C) product of the materials price variance and the materials quantity variance. 
D) sum of the materials price variance and the materials quantity variance. 
A) materials price variance. 
B) difference between the materials price variance and materials quantity variance. 
C) product of the materials price variance and the materials quantity variance. 
D) sum of the materials price variance and the materials quantity variance.

Question 14

Which of the following is false?

Accepted Answer

A) The total overhead budget variance relates primarily to fixed overhead costs. 
B) The fixed overhead volume variance relates only to fixed overhead costs. 
C) If production exceeds normal capacity, the overhead volume variance will be favourable. 
D) A two-variance analysis of overhead consists of a spending variance and a volume variance. 
A) The total overhead budget variance relates primarily to fixed overhead costs. 
B) The fixed overhead volume variance relates only to fixed overhead costs. 
C) If production exceeds normal capacity, the overhead volume variance will be favourable. 
D) A two-variance analysis of overhead consists of a spending variance and a volume variance.

Question 15

The per-unit standards for direct labour are 3 direct labour hours at $15 per hour.If in producing 700 units, the actual direct labour cost was $31,175 for 2,150 direct labour hours worked, the total direct labour variance is

Accepted Answer

A) $50 unfavourable. 
B) $325 favourable. 
C) $50 favourable. 
D) $325 unfavourable. 
A) $50 unfavourable. 
B) $325 favourable. 
C) $50 favourable. 
D) $325 unfavourable.

Question 16

The costing of inventories at standard cost for external financial statement reporting purposes is

Accepted Answer

A) not permitted. 
B) preferable to reporting at actual costs. 
C) in accordance with generally accepted accounting principles if significant differences exist between actual costs and standard costs. 
D) in accordance with generally accepted accounting principles if significant differences do not exist between actual and standard costs. 
A) not permitted. 
B) preferable to reporting at actual costs. 
C) in accordance with generally accepted accounting principles if significant differences exist between actual costs and standard costs. 
D) in accordance with generally accepted accounting principles if significant differences do not exist between actual and standard costs.

Question 17

The direct materials quantity standard would not be expressed in

Accepted Answer

A) kilograms. 
B) barrels. 
C) dollars. 
D) board metres. 
A) kilograms. 
B) barrels. 
C) dollars. 
D) board metres.

Question 18

Inventories cannot be valued at standard cost in financial statements.

Accepted Answer

A) True 
 B)False

Question 19

A standard cost is

Accepted Answer

A) a cost which is paid for a group of similar products. 
B) the average cost in an industry. 
C) a predetermined cost. 
D) the historical cost of producing a product last year. 
A) a cost which is paid for a group of similar products. 
B) the average cost in an industry. 
C) a predetermined cost. 
D) the historical cost of producing a product last year.

Question 20

A standard is a unit amount, whereas a budget is a total amount.

Accepted Answer

A) True 
 B)False

A problem with placing excessive emphasis on labour efficiency can be

Which of the following statements about overhead variances is FALSE?

The difference between actual overhead costs and overhead costs applied is the

The matrix approach to variance analysis

A good system of standard costing always

There could be instances where the production department is responsible for a direct materials price variance.

An unfavourable labour quantity variance may be caused by

Which of the following could cause a debit balance in the direct material price variance accounts?

Which of the following statements about standard costs is FALSE?

The fixed overhead spending variance is calculated as the difference between actual overhead costs incurred and the budgeted

Which of the following statements describes the customer perspective in the balanced scorecard?

The total materials variance is equal to the

Which of the following is false?

The per-unit standards for direct labour are 3 direct labour hours at $15 per hour.If in producing 700 units, the actual direct labour cost was $31,175 for 2,150 direct labour hours worked, the total direct labour variance is

The costing of inventories at standard cost for external financial statement reporting purposes is

The direct materials quantity standard would not be expressed in

Inventories cannot be valued at standard cost in financial statements.

A standard cost is

A standard is a unit amount, whereas a budget is a total amount.

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

A problem with placing excessive emphasis on labour efficiency can be

Which of the following statements about overhead variances is FALSE?

The difference between actual overhead costs and overhead costs applied is the

The matrix approach to variance analysis

A good system of standard costing always

There could be instances where the production department is responsible for a direct materials price variance.

An unfavourable labour quantity variance may be caused by

Which of the following could cause a debit balance in the direct material price variance accounts?

Which of the following statements about standard costs is FALSE?

The fixed overhead spending variance is calculated as the difference between actual overhead costs incurred and the budgeted

Which of the following statements describes the customer perspective in the balanced scorecard?

The total materials variance is equal to the

Which of the following is false?

The per-unit standards for direct labour are 3 direct labour hours at $15 per hour.If in producing 700 units, the actual direct labour cost was $31,175 for 2,150 direct labour hours worked, the total direct labour variance is

The costing of inventories at standard cost for external financial statement reporting purposes is

The direct materials quantity standard would not be expressed in

Inventories cannot be valued at standard cost in financial statements.

A standard cost is

A standard is a unit amount, whereas a budget is a total amount.

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