Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

The difference between fixed overhead budgeted and overhead 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 3

An advantage of standard costs is that they simplify costing of inventories and reduce clerical costs.

Accepted Answer

A) True 
 B)False

Question 4

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 5

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 6

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 7

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 total materials variance is

Accepted Answer

A) $1,100 U. 
B) $1,500 U. 
C) $1,250 U. 
D) $100 F. 
A) $1,100 U. 
B) $1,500 U. 
C) $1,250 U. 
D) $100 F.

Question 8

The fixed overhead volume variance relates only to fixed overhead costs.

Accepted Answer

A) True 
 B)False

Question 9

An overhead fixed volume variance is calculated as the difference between normal capacity hours and standard hours allowed

Accepted Answer

A) times the total predetermined overhead rate. 
B) times the predetermined variable overhead rate. 
C) times the predetermined fixed overhead rate. 
D) divided by actual number of hours worked. 
A) times the total predetermined overhead rate. 
B) times the predetermined variable overhead rate. 
C) times the predetermined fixed overhead rate. 
D) divided by actual number of hours worked.

Question 10

If actual costs are less than standard costs, the variance is favourable.

Accepted Answer

A) True 
 B)False

Question 11

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 12

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 13

The standard number of hours that should have been worked for the output attained is 8,000 direct labour hours and the actual number of direct labour hours worked was 8,400.If the direct labour price variance was $8,400 unfavourable, and the standard rate of pay was $18 per direct labour hour, what was the actual rate of pay for direct labour?

Accepted Answer

A) $17.00 per direct labour hour 
B) $15.00 per direct labour hour 
C) $19.00 per direct labour hour 
D) $18.00 per direct labour hour 
A) $17.00 per direct labour hour 
B) $15.00 per direct labour hour 
C) $19.00 per direct labour hour 
D) $18.00 per direct labour hour

Question 14

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 15

If actual direct material costs are greater than standard direct materials costs, it means that

Accepted Answer

A) actual costs were calculated incorrectly. 
B) the actual unit price of direct materials was greater than the standard unit price of direct materials. 
C) the actual unit price of raw materials or the actual quantities of raw materials used was greater than the standard unit price or standard quantities of raw materials expected. 
D) the purchasing agent or the production foreman is inefficient. 
A) actual costs were calculated incorrectly. 
B) the actual unit price of direct materials was greater than the standard unit price of direct materials. 
C) the actual unit price of raw materials or the actual quantities of raw materials used was greater than the standard unit price or standard quantities of raw materials expected. 
D) the purchasing agent or the production foreman is inefficient.

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

The cost of freight-in

Accepted Answer

A) is to be included in the standard cost of direct materials. 
B) is considered a selling expense. 
C) should have a separate standard apart from direct materials. 
D) should not be included in a standard cost system. 
A) is to be included in the standard cost of direct materials. 
B) is considered a selling expense. 
C) should have a separate standard apart from direct materials. 
D) should not be included in a standard cost system.

Question 18

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.

Question 19

In using variance reports, management looks for

Accepted Answer

A) total assets invested. 
B) significant variances. 
C) competitors' costs in comparison to the company's costs. 
D) more efficient ways of valuing inventories. 
A) total assets invested. 
B) significant variances. 
C) competitors' costs in comparison to the company's costs. 
D) more efficient ways of valuing inventories.

Question 20

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.

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

The difference between fixed overhead budgeted and overhead applied is the

An advantage of standard costs is that they simplify costing of inventories and reduce clerical costs.

Variance reports are

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

Manufacturing overhead costs are applied to work in process on the basis of

The fixed overhead volume variance relates only to fixed overhead costs.

An overhead fixed volume variance is calculated as the difference between normal capacity hours and standard hours allowed

If actual costs are less than standard costs, the variance is favourable.

The direct materials quantity standard should

The direct materials quantity standard would not be expressed in

Labour efficiency is measured by the

If actual direct material costs are greater than standard direct materials costs, it means that

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

The cost of freight-in

Most companies that use standards set them at

In using variance reports, management looks for

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

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

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

The difference between fixed overhead budgeted and overhead applied is the

An advantage of standard costs is that they simplify costing of inventories and reduce clerical costs.

Variance reports are

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

Manufacturing overhead costs are applied to work in process on the basis of

The fixed overhead volume variance relates only to fixed overhead costs.

An overhead fixed volume variance is calculated as the difference between normal capacity hours and standard hours allowed

If actual costs are less than standard costs, the variance is favourable.

The direct materials quantity standard should

The direct materials quantity standard would not be expressed in

Labour efficiency is measured by the

If actual direct material costs are greater than standard direct materials costs, it means that

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

The cost of freight-in

Most companies that use standards set them at

In using variance reports, management looks for

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

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