Question 1

Standards that represent levels of operation that can be attained with reasonable effort are called

Accepted Answer

A)  theoretical standards 
B)  ideal standards 
C)  variable standards 
D)  normal standards 
A)  theoretical standards 
B)  ideal standards 
C)  variable standards 
D)  normal standards

Question 2

The variance from standard for factory overhead resulting from incurring a total amount of factory overhead cost that is greater or less than the amount budgeted for the level of operations achieved is termed controllable variance.

Accepted Answer

A) True 
 B)False

Question 3

A variable cost system is an accounting system where standards are set for each manufacturing cost element.

Accepted Answer

A) True 
 B)False

Question 4

Match each of the following descriptions with the term (a-e) it describes.
-Normal standard

Accepted Answer

A) Ideal standard 
B) Nonfinancial performance measure 
C) Currently attainable standard 
D) Unfavorable cost variance 
E) Favorable cost variance 
A) Ideal standard 
B) Nonfinancial performance measure 
C) Currently attainable standard 
D) Unfavorable cost variance 
E) Favorable cost variance

Question 5

Standards are set for only direct labor and direct materials.

Accepted Answer

A) True 
 B)False

Question 6

Use this information for Taylor Company to answer the questions that follow.
​
The following data are given for Taylor Company:
​
   Overhead is applied based on standard labor hours.
​
-Compute the direct labor rate and time variances for Taylor Company.

Accepted Answer

Direct labor rate variance: $6

Question 7

Normally, standard costs should be revised when labor rates change to incorporate new union contracts.

Accepted Answer

A) True 
 B)False

Question 8

Nonfinancial measures are often linked to the inputs or outputs of an activity or process.

Accepted Answer

A) True 
 B)False

Question 9

What is the fixed factory overhead volume variance?

Accepted Answer

A)  $12,000 unfavorable 
B)  $12,000 favorable 
C)  $14,000 unfavorable 
D)  $26,000 unfavorable 
A)  $12,000 unfavorable 
B)  $12,000 favorable 
C)  $14,000 unfavorable 
D)  $26,000 unfavorable

Question 10

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual is 800 units at $12, the direct materials price variance is $800 favorable.

Accepted Answer

A) True 
 B)False

Question 11

The formula to the compute direct labor time variance is to calculate the difference between

Accepted Answer

A)  Actual Costs - Standard Costs 
B)  Actual Costs + Standard Costs 
C)  (Actual Hours × Standard Rate) - Standard Costs 
D)  Actual Costs - (Actual Hours × Standard Rate) 
A)  Actual Costs - Standard Costs 
B)  Actual Costs + Standard Costs 
C)  (Actual Hours × Standard Rate) - Standard Costs 
D)  Actual Costs - (Actual Hours × Standard Rate)

Question 12

Accounting systems that use standards for product costs are called budgeted cost systems.

Accepted Answer

A) True 
 B)False

Question 13

A company records its inventory purchases at standard cost but also records purchase price variances. The company purchased 5,000 widgets at $8.00 each, and the standard cost for the widgets is $7.60. Which of the following would be included in the journal entry?

Accepted Answer

The answer of A company records its inventory purchases at...

Question 14

Standard costs are determined by multiplying expected price by expected quantity.

Accepted Answer

A) True 
 B)False

Question 15

-Calculate the direct labor rate variance.

Accepted Answer

A)  $4,488.75 unfavorable 
B)  $6,851.25 favorable 
C)  $4,488.75 favorable 
D)  $6,851.25 unfavorable 
A)  $4,488.75 unfavorable 
B)  $6,851.25 favorable 
C)  $4,488.75 favorable 
D)  $6,851.25 unfavorable

Question 16

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual is 800 units at $12, the direct materials quantity variance is $1,000 unfavorable.

Accepted Answer

A) True 
 B)False

Question 17

Accounting systems that use standards for product costs are called standard cost systems.

Accepted Answer

A) True 
 B)False

Question 18

A company records inventory purchases at standard cost and also records purchase price variances. Prepare the journal entry for a purchase of 6,000 widgets that were bought at $8.00 and have a standard cost of $8.15.

Accepted Answer

The answer of A company records inventory purchases at standard...

Question 19

Define nonfinancial performance measures. What are they used for and what are some common examples?

Accepted Answer

Nonfinancial performance measures evalua

Question 20

-Calculate the direct materials price variance.

Accepted Answer

A)  $1,795.50 favorable 
B)  $378.00 favorable 
C)  $4,512.50 unfavorable 
D)  $378.00 unfavorable 
A)  $1,795.50 favorable 
B)  $378.00 favorable 
C)  $4,512.50 unfavorable 
D)  $378.00 unfavorable

Exam 22: Evaluating Variances From Standard Costs

Standards that represent levels of operation that can be attained with reasonable effort are called

The variance from standard for factory overhead resulting from incurring a total amount of factory overhead cost that is greater or less than the amount budgeted for the level of operations achieved is termed controllable variance.

A variable cost system is an accounting system where standards are set for each manufacturing cost element.

Match each of the following descriptions with the term (a-e) it describes. -Normal standard

Standards are set for only direct labor and direct materials.

Use this information for Taylor Company to answer the questions that follow. ​ The following data are given for Taylor Company: ​ Overhead is applied based on standard labor hours. ​ -Compute the direct labor rate and time variances for Taylor Company.

Normally, standard costs should be revised when labor rates change to incorporate new union contracts.

Nonfinancial measures are often linked to the inputs or outputs of an activity or process.

What is the fixed factory overhead volume variance?

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual is 800 units at $12, the direct materials price variance is $800 favorable.

The formula to the compute direct labor time variance is to calculate the difference between

Accounting systems that use standards for product costs are called budgeted cost systems.

A company records its inventory purchases at standard cost but also records purchase price variances. The company purchased 5,000 widgets at $8.00 each, and the standard cost for the widgets is $7.60. Which of the following would be included in the journal entry?

Standard costs are determined by multiplying expected price by expected quantity.

-Calculate the direct labor rate variance.

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual is 800 units at $12, the direct materials quantity variance is $1,000 unfavorable.

Accounting systems that use standards for product costs are called standard cost systems.

A company records inventory purchases at standard cost and also records purchase price variances. Prepare the journal entry for a purchase of 6,000 widgets that were bought at $8.00 and have a standard cost of $8.15.

Define nonfinancial performance measures. What are they used for and what are some common examples?

-Calculate the direct materials price variance.

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

Use this information for Taylor Company to answer the questions that follow. The following data are given for Taylor Company: Overhead is applied based on standard labor hours. -Compute the direct labor rate and time variances for Taylor Company.