Exam 11: Reporting and Analyzing Stockholders Equity

The purchasing agent of the Poplin, Inc.ordered materials of lower quality in an effort to economize on price.What variance will most likely result?

The cost of freight-in

If a company assigns factory labor to production at a cost of $84,000 when standard cost is $80,000, it will

The overhead volume variance is

Edgar, Inc.has a materials price standard of $2.00 per pound.Six thousand pounds of materials were purchased at $2.20 a pound.The actual quantity of materials used was 6,000 pounds, although the standard quantity allowed for the output was 5,400 pounds. Edgar, Inc.'s materials price variance is

What does the controllable variance measure?

The investigation of materials price variance usually begins in the

The following information was taken from the annual manufacturing overhead cost budget of Fergie Manufacturing. Variable manufacturing overhead costs \ 92,400 Fixed manufacturing overhead costs \ 55,440 Normal production level in labor hours 30,800 Normal production level in units 5,775 Standard labor hours per unit 4 During the year, 5,600 units were produced, 18,340 hours were worked, and the actual manufacturing overhead was $151,200.Actual fixed manufacturing overhead costs equaled budgeted fixed manufacturing overhead costs.Overhead is applied on the basis of direct labor hours.Fergie's controllable overhead variance is

Alex Co.prepared its income statement for management using a standard cost accounting system.Which of the following appears at the "standard" amount?

The formula for computing the overhead volume variance is

The starting point for determining the causes of an unfavorable materials price variance is the purchasing department.

Using standard costs

A standard cost system may be used in Job Order Costing Process Costing a. No No b. Yes No c. No Yes d. Yes Yes

Setting standard costs is relatively simple because it is done entirely by accountants.

Variance analysis facilitates the principle of "management by exception."

Marburg Co.expects direct materials cost of $6 per unit for 100,000 units (a total of $600,000 of direct materials costs).Marburg's standard direct materials cost and budgeted direct materials cost is Standard Budgeted a. \ 6 per unit \ 600,000 peryear b. \ 6 per unit \ 6 per unit c. \ 600,000 per year \ 6 per unit d. \ 600,000 peryear \ 600,000 peryear

Ideal standards will generally result in favorable variances for the company.

In reporting variances,

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

Budget data are not journalized in cost accounting systems with the exception of