Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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 3

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 4

The spending variance relates to

Accepted Answer

A) fixed overhead costs. 
B) variable overhead costs. 
C) both fixed and variable overhead costs. 
D) all manufacturing costs. 
A) fixed overhead costs. 
B) variable overhead costs. 
C) both fixed and variable overhead costs. 
D) all manufacturing costs.

Question 5

The total standard cost to produce one unit of product is shown

Accepted Answer

A) at the bottom of the income statement. 
B) at the bottom of the balance sheet. 
C) on the standard cost card. 
D) in the Work in Process Inventory account. 
A) at the bottom of the income statement. 
B) at the bottom of the balance sheet. 
C) on the standard cost card. 
D) in the Work in Process Inventory account.

Question 6

A good system of standard costing always

Accepted Answer

A) ensures that the right staff are to blame if there are negative variances. 
B) ensures that the right staff are both rewarded and blamed when there are positive or negative variances. 
C) avoids excessive detail in examining small variances. 
D) considers the impact of morale on all those who utilize the reporting system. 
A) ensures that the right staff are to blame if there are negative variances. 
B) ensures that the right staff are both rewarded and blamed when there are positive or negative variances. 
C) avoids excessive detail in examining small variances. 
D) considers the impact of morale on all those who utilize the reporting system.

Question 7

One problem with standard cost reports is

Accepted Answer

A) they can only be read effectively by trained accountants. 
B) they are often prepared well after the events that give rise to them. 
C) not everyone in the organization can agree on their use. 
D) they allow for shareholders to ask difficult questions from management. 
A) they can only be read effectively by trained accountants. 
B) they are often prepared well after the events that give rise to them. 
C) not everyone in the organization can agree on their use. 
D) they allow for shareholders to ask difficult questions from management.

Question 8

Wild West Inc.produces a product requiring 3 direct labour hours at $20.00 per hour.During January, 2,000 products are produced using 6,300 direct labour hours.Wild West's actual payroll during January was $122,850.What is the labour quantity variance?

Accepted Answer

A) $2,850 U 
B) $6,000 F 
C) $3,150 F 
D) $6,000 U 
A) $2,850 U 
B) $6,000 F 
C) $3,150 F 
D) $6,000 U

Question 9

The customer perspective on the balance scorecard includes financial measures of performance.

Accepted Answer

A) True 
 B)False

Question 10

Standard costs may be used by

Accepted Answer

A) universities. 
B) governmental agencies. 
C) charitable organizations. 
D) all of these. 
A) universities. 
B) governmental agencies. 
C) charitable organizations. 
D) all of these.

Question 11

There could be instances where the production department is responsible for a direct materials price variance.

Accepted Answer

A) True 
 B)False

Question 12

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 13

A favourable variance that is significant in a cost report

Accepted Answer

A) is a positive result for a manager. 
B) is a negative result for a manager. 
C) can be ignored especially if it is a minor amount. 
D) should be investigated along with any negative variances. 
A) is a positive result for a manager. 
B) is a negative result for a manager. 
C) can be ignored especially if it is a minor amount. 
D) should be investigated along with any negative variances.

Question 14

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 15

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 16

If a company is concerned with the potential negative effects of establishing standards, they should

Accepted Answer

A) set loose standards that are easy to fulfill. 
B) offer wage incentives to those meeting standards. 
C) not employ any standards. 
D) set tight standards in order to motivate people. 
A) set loose standards that are easy to fulfill. 
B) offer wage incentives to those meeting standards. 
C) not employ any standards. 
D) set tight standards in order to motivate people.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

A credit to a Materials Quantity Variance account indicates that the actual quantity of direct materials used was greater than the standard quantity of direct materials allowed.

Accepted Answer

A) True 
 B)False

Question 19

A materials quantity variance is calculated as the difference between the standard direct materials price and the actual direct materials price multiplied by the actual quantity of direct materials used.

Accepted Answer

A) True 
 B)False

Question 20

A standard cost system may be used with a job order cost system but not a process cost system.

Accepted Answer

A) True 
 B)False

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

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

Most companies that use standards set them at

The spending variance relates to

The total standard cost to produce one unit of product is shown

A good system of standard costing always

One problem with standard cost reports is

Wild West Inc.produces a product requiring 3 direct labour hours at $20.00 per hour.During January, 2,000 products are produced using 6,300 direct labour hours.Wild West's actual payroll during January was $122,850.What is the labour quantity variance?

The customer perspective on the balance scorecard includes financial measures of performance.

Standard costs may be used by

There could be instances where the production department is responsible for a direct materials price variance.

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

A favourable variance that is significant in a cost report

Variance reports are

Variances from standards are

If a company is concerned with the potential negative effects of establishing standards, they should

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

A credit to a Materials Quantity Variance account indicates that the actual quantity of direct materials used was greater than the standard quantity of direct materials allowed.

A materials quantity variance is calculated as the difference between the standard direct materials price and the actual direct materials price multiplied by the actual quantity of direct materials used.

A standard cost system may be used with a job order cost system but not a process cost system.

Managerial Accounting

Managerial Cost Concepts and Cost Behaviour Analysis

Job-Order Cost Accounting

Process Cost Accounting

Activity-Based Costing

Decision-Making: Costvolumeprofit

Incremental Analysis

Alternative Inventory Costing Methods: 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 volume variance relates only to fixed overhead costs.

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

Most companies that use standards set them at

The spending variance relates to

The total standard cost to produce one unit of product is shown

A good system of standard costing always

One problem with standard cost reports is

Wild West Inc.produces a product requiring 3 direct labour hours at $20.00 per hour.During January, 2,000 products are produced using 6,300 direct labour hours.Wild West's actual payroll during January was $122,850.What is the labour quantity variance?

The customer perspective on the balance scorecard includes financial measures of performance.

Standard costs may be used by

There could be instances where the production department is responsible for a direct materials price variance.

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

A favourable variance that is significant in a cost report

Variance reports are

Variances from standards are

If a company is concerned with the potential negative effects of establishing standards, they should

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

A credit to a Materials Quantity Variance account indicates that the actual quantity of direct materials used was greater than the standard quantity of direct materials allowed.

A materials quantity variance is calculated as the difference between the standard direct materials price and the actual direct materials price multiplied by the actual quantity of direct materials used.

A standard cost system may be used with a job order cost system but not a process cost system.

Managerial Accounting

Managerial Cost Concepts and Cost Behaviour Analysis

Job-Order Cost Accounting

Process Cost Accounting

Activity-Based Costing

Decision-Making: Costvolumeprofit

Incremental Analysis

Alternative Inventory Costing Methods: a Decision-Making Perspective

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Planning for Capital Investments

Filters