Question 1

It is correct to rely exclusively on past cost data when establishing standards.

Accepted Answer

A) True 
 B)False  False

Question 2

Tucker Company produced 8,900 units of product that required 3.25 standard hours per unit. The standard variable overhead cost per unit is $4.00 per hour. The actual variable factory overhead was $111,000.?Determine the variable factory overhead controllable variance.

Accepted Answer

The variable factory overhead controllable variance is $ (4,700) Favorable.[ (8,900 × 3.25 × $4.00) - $111,000]

Question 3

The Finishing Department of Pinnacle Manufacturing Co. prepared the following factory overhead cost budget for October of the current year, during which it expected to operate at a 100% capacity of 10,000 machine hours.​   During October, the plant was operated for 9,000 machine hours and the factory overhead costs incurred were as follows: indirect factory wages, $16,400; power and light, $10,000; indirect materials, $3,000; supervisory salaries, $12,000; depreciation of plant and equipment, $8,800; insurance and property taxes, $3,200.Prepare a factory overhead cost variance report for October. 
(The budgeted amounts for actual amount produced should be based on 9,000 machine hours.)

Accepted Answer

​

Question 4

The following data are given for Bahia Company:​   Overhead is applied on standard labor hours.The fixed factory overhead volume variance is

Accepted Answer

A)  $65 unfavorable 
B)  $65 favorable 
C)  $540 unfavorable 
D)  $540 favorable 
A)  $65 unfavorable 
B)  $65 favorable 
C)  $540 unfavorable 
D)  $540 favorable

Question 5

If the price paid per unit differs from the standard price per unit for direct materials, the variance is a

Accepted Answer

A)  variable variance 
B)  controllable variance 
C)  price variance 
D)  volume variance 
A)  variable variance 
B)  controllable variance 
C)  price variance 
D)  volume variance

Question 6

If the wage rate paid per hour differs from the standard wage rate per hour for direct labor, the variance is a

Accepted Answer

A)  variable variance 
B)  rate variance 
C)  quantity variance 
D)  volume variance 
A)  variable variance 
B)  rate variance 
C)  quantity variance 
D)  volume variance

Question 7

If the standard to produce a given amount of product is 600 direct labor hours at $17 and the actual is 500 hours at $15, the time variance is $1,500 unfavorable.

Accepted Answer

A) True 
 B)False

Question 8

Robin Company purchased on account and used 500 pounds of direct materials to produce a product with a 520-pound standard direct materials requirement. The standard materials price is $1.90 per pound. The actual materials price was $2.00 per pound.​Prepare the journal entries to record 
(1) the purchase of the materials and 
(2) the material entering production.

Accepted Answer

The answer of Robin Company purchased on account and used...

Question 9

-Calculate the total direct labor variance.

Accepted Answer

A)  $2,051.25 favorable 
B)  $2,051.25 unfavorable 
C)  $2,362.50 unfavorable 
D)  $2,362.50 favorable 
A)  $2,051.25 favorable 
B)  $2,051.25 unfavorable 
C)  $2,362.50 unfavorable 
D)  $2,362.50 favorable

Question 10

Match each of the following formulas or descriptions with the term (a-e) it defines.
-(Actual Price - Standard Price) × Actual Quantity

Accepted Answer

A) Direct materials price variance 
B) Direct labor rate variance 
C) Direct labor time variance 
D) Direct materials quantity variance 
E) Budgeted variable factory overhead 
A) Direct materials price variance 
B) Direct labor rate variance 
C) Direct labor time variance 
D) Direct materials quantity variance 
E) Budgeted variable factory overhead

Question 11

Variances from standard costs are reported to

Accepted Answer

A)  suppliers 
B)  stockholders 
C)  management 
D)  creditors 
A)  suppliers 
B)  stockholders 
C)  management 
D)  creditors

Question 12

The total manufacturing cost variance is

Accepted Answer

A)  the difference between actual costs and standard costs for units produced 
B)  the flexible budget variance plus the time variance 
C)  the difference between planned costs and standard costs for units produced 
D)  None of these choices 
A)  the difference between actual costs and standard costs for units produced 
B)  the flexible budget variance plus the time variance 
C)  the difference between planned costs and standard costs for units produced 
D)  None of these choices

Question 13

The most effective means of presenting standard factory overhead cost variance data is through a factory overhead cost variance report.

Accepted Answer

A) True 
 B)False

Question 14

The standard price and quantity of direct materials are separated because

Accepted Answer

A)  GAAP and IFRS reporting requires separation 
B)  direct materials prices are controlled by the purchasing department and quantity used is controlled by the production department 
C)  standard prices are more difficult to estimate than standard quantities 
D)  standard quantities change more frequently than standard prices 
A)  GAAP and IFRS reporting requires separation 
B)  direct materials prices are controlled by the purchasing department and quantity used is controlled by the production department 
C)  standard prices are more difficult to estimate than standard quantities 
D)  standard quantities change more frequently than standard prices

Question 15

Nonfinancial performance output measures are used to improve the input measures.

Accepted Answer

A) True 
 B)False

Question 16

The following data relate to direct labor costs for August:Actual costs: 5,500 hours at $24.00 per hourStandard costs: 5,000 hours at $23.70 per hour​What is the direct labor rate variance?​

Accepted Answer

A)  ​$1,650 favorable 
B)  ​$1,650 unfavorable 
C)  ​$1,500 favorable 
D)  ​$1,500 unfavorable 
A)  ​$1,650 favorable 
B)  ​$1,650 unfavorable 
C)  ​$1,500 favorable 
D)  ​$1,500 unfavorable

Question 17

Incurring actual indirect factory wages in excess of budgeted amounts for actual production results in a

Accepted Answer

A)  quantity variance 
B)  controllable variance 
C)  volume variance 
D)  rate variance 
A)  quantity variance 
B)  controllable variance 
C)  volume variance 
D)  rate variance

Question 18

The variance from standard for factory overhead cost resulting from operating at a level above or below 100% of normal capacity is termed volume variance.

Accepted Answer

A) True 
 B)False

Question 19

The following information is for the standard and actual costs for Happy Corporation:??   Determine: 
(a) the direct materials quantity variance, price variance, and total cost variance; 
(b) the direct labor time variance, rate variance, and total cost variance; and 
(c) the factory overhead volume variance, controllable variance, and total factory overhead cost variance. 
(Note: If following text formulas, do not round interim calculations.)

Accepted Answer

(a) Direct materials

Question 20

Greyson Company produced 8,300 units of product that required 4.25 standard hours per unit. Determine the fixed factory overhead rate at 27,000 hours, which is 100% of normal capacity, if the favorable fixed factory overhead volume variance is $14,895.

Accepted Answer

[ (8,300 × 4.25) - 2

Exam 22: Evaluating Variances From Standard Costs

It is correct to rely exclusively on past cost data when establishing standards.

Tucker Company produced 8,900 units of product that required 3.25 standard hours per unit. The standard variable overhead cost per unit is $4.00 per hour. The actual variable factory overhead was $111,000.?Determine the variable factory overhead controllable variance.

The following data are given for Bahia Company:​ Overhead is applied on standard labor hours.The fixed factory overhead volume variance is

If the price paid per unit differs from the standard price per unit for direct materials, the variance is a

If the wage rate paid per hour differs from the standard wage rate per hour for direct labor, the variance is a

If the standard to produce a given amount of product is 600 direct labor hours at $17 and the actual is 500 hours at $15, the time variance is $1,500 unfavorable.

-Calculate the total direct labor variance.

Match each of the following formulas or descriptions with the term (a-e) it defines. -(Actual Price - Standard Price) × Actual Quantity

Variances from standard costs are reported to

The total manufacturing cost variance is

The most effective means of presenting standard factory overhead cost variance data is through a factory overhead cost variance report.

The standard price and quantity of direct materials are separated because

Nonfinancial performance output measures are used to improve the input measures.

The following data relate to direct labor costs for August:Actual costs: 5,500 hours at $24.00 per hourStandard costs: 5,000 hours at $23.70 per hour​What is the direct labor rate variance?​

Incurring actual indirect factory wages in excess of budgeted amounts for actual production results in a

The variance from standard for factory overhead cost resulting from operating at a level above or below 100% of normal capacity is termed volume variance.

Greyson Company produced 8,300 units of product that required 4.25 standard hours per unit. Determine the fixed factory overhead rate at 27,000 hours, which is 100% of normal capacity, if the favorable fixed factory overhead volume variance is $14,895.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Cost-Volume-Profit Analysis

Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Filters

The following data are given for Bahia Company: Overhead is applied on standard labor hours.The fixed factory overhead volume variance is

The following data relate to direct labor costs for August:Actual costs: 5,500 hours at $24.00 per hourStandard costs: 5,000 hours at $23.70 per hourWhat is the direct labor rate variance?