Question 1

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 2

All of the following variances are reported to the production department except the

Accepted Answer

A) labour price variance. 
B) materials price variance. 
C) overhead controllable variance. 
D) labour price and materials price variances. 
A) labour price variance. 
B) materials price variance. 
C) overhead controllable variance. 
D) labour price and materials price variances.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) the application of manufacturing overhead. 
B) direct labour budgets. 
C) direct materials budgets. 
D) cash budget data. 
A) the application of manufacturing overhead. 
B) direct labour budgets. 
C) direct materials budgets. 
D) cash budget data.

Question 5

Each of the following may cause an unfavourable variable budget variance except

Accepted Answer

A) higher than expected use of indirect materials. 
B) greater than expected use of indirect labour. 
C) increases in indirect manufacturing costs. 
D) inefficient use of direct labour. 
A) higher than expected use of indirect materials. 
B) greater than expected use of indirect labour. 
C) increases in indirect manufacturing costs. 
D) inefficient use of direct labour.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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 8

If the standard hours allowed are less than the standard hours at normal capacity,

Accepted Answer

A) the overhead volume variance will be unfavourable. 
B) variable overhead costs will be under-applied. 
C) the overhead controllable variance will be favourable. 
D) variable overhead costs will be over-applied. 
A) the overhead volume variance will be unfavourable. 
B) variable overhead costs will be under-applied. 
C) the overhead controllable variance will be favourable. 
D) variable overhead costs will be over-applied.

Question 9

Inventories cannot be valued at standard cost in financial statements.

Accepted Answer

A) True 
 B)False

Question 10

The total variance is $10,000.The total materials variance is $4,000.The total labour variance is twice the total overhead variance.What is the total overhead variance?

Accepted Answer

A) $1,000 
B) $2,000 
C) $3,000 
D) $4,000 
A) $1,000 
B) $2,000 
C) $3,000 
D) $4,000

Question 11

Normal standards should be rigorous but attainable.

Accepted Answer

A) True 
 B)False

Question 12

The final decision as to what standard cost should be is the responsibility of

Accepted Answer

A) the quality control engineer. 
B) the managerial accountants. 
C) the purchasing agent. 
D) management. 
A) the quality control engineer. 
B) the managerial accountants. 
C) the purchasing agent. 
D) management.

Question 13

A two-variance analysis of overhead consists of a spending variance and a volume variance.

Accepted Answer

A) True 
 B)False

Question 14

Variances from standards are

Accepted Answer

A) expressed in total dollars. 
B) expressed on a per-unit basis. 
C) expressed on a percentage basis. 
D) all of these. 
A) expressed in total dollars. 
B) expressed on a per-unit basis. 
C) expressed on a percentage basis. 
D) all of these.

Question 15

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 16

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 17

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 18

In developing a standard cost for direct materials, a price factor and a quantity factor must be considered.

Accepted Answer

A) True 
 B)False

Question 19

If actual costs are greater than standard costs, there is a(n)

Accepted Answer

A) normal variance. 
B) unfavourable variance. 
C) favourable variance. 
D) error in the accounting system. 
A) normal variance. 
B) unfavourable variance. 
C) favourable variance. 
D) error in the accounting system.

Question 20

If the materials price variance is $600 F and the materials quantity and labour variances are each $450 U, what is the total materials variance?

Accepted Answer

A) $600 F 
B) $450 U 
C) $150 F 
D) $1,050 U 
A) $600 F 
B) $450 U 
C) $150 F 
D) $1,050 U

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

All of the following variances are reported to the production department except the

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

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

Each of the following may cause an unfavourable variable budget variance except

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

The formula for the materials price variance is

If the standard hours allowed are less than the standard hours at normal capacity,

Inventories cannot be valued at standard cost in financial statements.

The total variance is $10,000.The total materials variance is $4,000.The total labour variance is twice the total overhead variance.What is the total overhead variance?

Normal standards should be rigorous but attainable.

The final decision as to what standard cost should be is the responsibility of

A two-variance analysis of overhead consists of a spending variance and a volume variance.

Variances from standards are

A standard cost is

Which of the following statements is false?

In developing a standard cost for direct materials, a price factor and a quantity factor must be considered.

If actual costs are greater than standard costs, there is a(n)

If the materials price variance is $600 F and the materials quantity and labour variances are each $450 U, what is the total materials variance?

Managerial Accounting

Managerial Cost Concepts and Cost Behaviour Analysis

Job Order Costing

Process Costing

Activity-Based-Costing

Cost-Volume-Profit

Incremental Analysis

Variable Costing: a Decision-Making Perspective

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Planning for Capital Investments

Filters

Exam 12: Standard Costs and Balanced Scorecard

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

All of the following variances are reported to the production department except the

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

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

Each of the following may cause an unfavourable variable budget variance except

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

The formula for the materials price variance is

If the standard hours allowed are less than the standard hours at normal capacity,

Inventories cannot be valued at standard cost in financial statements.

The total variance is $10,000.The total materials variance is $4,000.The total labour variance is twice the total overhead variance.What is the total overhead variance?

Normal standards should be rigorous but attainable.

The final decision as to what standard cost should be is the responsibility of

A two-variance analysis of overhead consists of a spending variance and a volume variance.

Variances from standards are

A standard cost is

Which of the following statements is false?

In developing a standard cost for direct materials, a price factor and a quantity factor must be considered.

If actual costs are greater than standard costs, there is a(n)

If the materials price variance is $600 F and the materials quantity and labour variances are each $450 U, what is the total materials variance?

Managerial Accounting

Managerial Cost Concepts and Cost Behaviour Analysis

Job Order Costing

Process Costing

Activity-Based-Costing

Cost-Volume-Profit

Incremental Analysis

Variable Costing: a Decision-Making Perspective

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Planning for Capital Investments

Filters