Question 1

A standard which represents an efficient level of performance that is attainable under expected operating conditions is called a(n)

Accepted Answer

A) ideal standard. 
B) loose standard. 
C) tight standard. 
D) normal standard. 
A) ideal standard. 
B) loose standard. 
C) tight standard. 
D) normal standard.

Question 2

The costing of inventories at standard cost for external financial statement reporting purposes is

Accepted Answer

A) not permitted. 
B) preferable to reporting at actual costs. 
C) in accordance with generally accepted accounting principles if significant differences exist between actual costs and standard costs. 
D) in accordance with generally accepted accounting principles if significant differences do not exist between actual and standard costs. 
A) not permitted. 
B) preferable to reporting at actual costs. 
C) in accordance with generally accepted accounting principles if significant differences exist between actual costs and standard costs. 
D) in accordance with generally accepted accounting principles if significant differences do not exist between actual and standard costs.

Question 3

An unfavourable materials quantity variance would occur if

Accepted Answer

A) more materials are purchased than are used. 
B) actual kilograms of materials used were less than the standard kilograms allowed. 
C) actual labour hours used were greater than the standard labour hours allowed. 
D) actual kilograms of materials used were greater than the standard kilograms allowed. 
A) more materials are purchased than are used. 
B) actual kilograms of materials used were less than the standard kilograms allowed. 
C) actual labour hours used were greater than the standard labour hours allowed. 
D) actual kilograms of materials used were greater than the standard kilograms allowed.

Question 4

It is possible that a company's financial statements may report inventories at

Accepted Answer

A) budgeted costs. 
B) standard costs. 
C) both budgeted and standard costs. 
D) none of these. 
A) budgeted costs. 
B) standard costs. 
C) both budgeted and standard costs. 
D) none of these.

Question 5

Each of the following may cause an unfavourable variable overhead 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

The materials price variance is recorded

Accepted Answer

A) at the end of the accounting period. 
B) when materials are purchased. 
C) when materials are issued to production. 
D) at the beginning of the accounting period. 
A) at the end of the accounting period. 
B) when materials are purchased. 
C) when materials are issued to production. 
D) at the beginning of the accounting period.

Question 7

Which of the following statements is FALSE?

Accepted Answer

A) The overhead volume variance indicates whether plant facilities were used efficiently during the period. 
B) The costs that cause the overhead volume variance are usually controllable costs. 
C) The overhead volume variance relates solely to fixed costs. 
D) The overhead volume variance is favourable if standard hours allowed for output are greater than the standard hours at normal capacity. 
A) The overhead volume variance indicates whether plant facilities were used efficiently during the period. 
B) The costs that cause the overhead volume variance are usually controllable costs. 
C) The overhead volume variance relates solely to fixed costs. 
D) The overhead volume variance is favourable if standard hours allowed for output are greater than the standard hours at normal capacity.

Question 8

The budgeted overhead costs for standard hours allowed and the overhead costs applied to the product are the same amount

Accepted Answer

A) for both variable and fixed overhead costs. 
B) only when standard hours allowed is less than normal capacity. 
C) for variable overhead costs. 
D) for fixed overhead costs. 
A) for both variable and fixed overhead costs. 
B) only when standard hours allowed is less than normal capacity. 
C) for variable overhead costs. 
D) for fixed overhead costs.

Question 9

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 10

A problem with placing excessive emphasis on labour efficiency can be

Accepted Answer

A) material costs get ignored. 
B) pressure can be put on workers to work unsafely. 
C) overhead costs can be improperly estimated. 
D) work in progress and finished goods inventories can build up beyond acceptable levels. 
A) material costs get ignored. 
B) pressure can be put on workers to work unsafely. 
C) overhead costs can be improperly estimated. 
D) work in progress and finished goods inventories can build up beyond acceptable levels.

Question 11

The difference between actual overhead costs and overhead costs 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 12

EKPN Co.produces wooden boxes.The company's standards per box require 6 boards, each costing $10 per board, and half of an hour of direct labour.The standard labour rate is $15 per hour.In August, EKPN Co.Purchased 12,000 boards for a total cost of $123,000.It used 11,500 boards to manufacture 1,900 boxes.Total labour hours were 1,000 hours, and total labour costs were $16,250. What was the labour quantity variance for August?

Accepted Answer

A) $750 F 
B) $750 U 
C) $13,500 F 
D) $13,500 U 
A) $750 F 
B) $750 U 
C) $13,500 F 
D) $13,500 U

Question 13

Which of the following is NOT considered an advantage of using standard costs?

Accepted Answer

A) Standard costs can reduce clerical costs. 
B) Standard costs can be useful in setting prices for finished goods. 
C) Standard costs can be used as a means of finding fault with performance. 
D) Standard costs can make employees "cost-conscious." 
A) Standard costs can reduce clerical costs. 
B) Standard costs can be useful in setting prices for finished goods. 
C) Standard costs can be used as a means of finding fault with performance. 
D) Standard costs can make employees "cost-conscious."

Question 14

EKPN Co.produces wooden boxes.The company's standards per box require 6 boards, each costing $10 per board, and half of an hour of direct labour.The standard labour rate is $15 per hour.In August, EKPN Co.Purchased 12,000 boards for a total cost of $123,000.It used 11,500 boards to manufacture 1,900 boxes.Total labour hours were 1,000 hours, and total labour costs were $16,250.What was the materials price variance for August?

Accepted Answer

A) $3,000 F 
B) $3,000 U 
C) $ 8,000 F 
D) $8,000 U 
A) $3,000 F 
B) $3,000 U 
C) $ 8,000 F 
D) $8,000 U

Question 15

Once set, normal standards should NOT be changed during the year.

Accepted Answer

A) True 
 B)False

Question 16

The difference between a budget and a standard is that

Accepted Answer

A) a budget expresses what costs were, while a standard expresses what costs should be. 
B) a budget expresses management's plans, while a standard reflects what actually happened. 
C) a budget expresses a total amount while a standard expresses a unit amount. 
D) standards are excluded from the cost accounting system, whereas budgets are generally incorporated into the cost accounting system. 
A) a budget expresses what costs were, while a standard expresses what costs should be. 
B) a budget expresses management's plans, while a standard reflects what actually happened. 
C) a budget expresses a total amount while a standard expresses a unit amount. 
D) standards are excluded from the cost accounting system, whereas budgets are generally incorporated into the cost accounting system.

Question 17

An unfavourable labour quantity variance indicates that the actual number of direct labour hours worked was greater than the number of direct labour hours that should have been worked for the output attained.

Accepted Answer

A) True 
 B)False

Question 18

When a company implements a balanced scorecard approach in its business,

Accepted Answer

A) it must ensure that it focuses on every aspect of its operations. 
B) it must ensure that only one or two areas is seen as the focus. 
C) it must establish performance measures that are focused on the specific strategy of the company. 
D) it must never supplant the traditional accounting information that is available to management. 
A) it must ensure that it focuses on every aspect of its operations. 
B) it must ensure that only one or two areas is seen as the focus. 
C) it must establish performance measures that are focused on the specific strategy of the company. 
D) it must never supplant the traditional accounting information that is available to management.

Question 19

When analyzing period end variance reports, if a variance amount is small the manager should

Accepted Answer

A) consider the variance within normal terms and ignore it for that period. 
B) combine all such small variances and if they show a larger variance, investigate them then. 
C) consider investigating the variance as there may be undetected swings in the intervening period that require investigation. 
D) focus his or her attention on more material variances. 
A) consider the variance within normal terms and ignore it for that period. 
B) combine all such small variances and if they show a larger variance, investigate them then. 
C) consider investigating the variance as there may be undetected swings in the intervening period that require investigation. 
D) focus his or her attention on more material variances.

Question 20

Standard costs

Accepted Answer

A) may show past cost experience. 
B) help establish expected future costs. 
C) are the budgeted costs per unit in the present. 
D) all of these. 
A) may show past cost experience. 
B) help establish expected future costs. 
C) are the budgeted costs per unit in the present. 
D) all of these.

A standard which represents an efficient level of performance that is attainable under expected operating conditions is called a(n)

The costing of inventories at standard cost for external financial statement reporting purposes is

An unfavourable materials quantity variance would occur if

It is possible that a company's financial statements may report inventories at

Each of the following may cause an unfavourable variable overhead budget variance EXCEPT

The materials price variance is recorded

Which of the following statements is FALSE?

The budgeted overhead costs for standard hours allowed and the overhead costs applied to the product are the same amount

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

A problem with placing excessive emphasis on labour efficiency can be

The difference between actual overhead costs and overhead costs applied is the

Which of the following is NOT considered an advantage of using standard costs?

Once set, normal standards should NOT be changed during the year.

The difference between a budget and a standard is that

An unfavourable labour quantity variance indicates that the actual number of direct labour hours worked was greater than the number of direct labour hours that should have been worked for the output attained.

When a company implements a balanced scorecard approach in its business,

When analyzing period end variance reports, if a variance amount is small the manager should

Standard costs

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

A standard which represents an efficient level of performance that is attainable under expected operating conditions is called a(n)

The costing of inventories at standard cost for external financial statement reporting purposes is

An unfavourable materials quantity variance would occur if

It is possible that a company's financial statements may report inventories at

Each of the following may cause an unfavourable variable overhead budget variance EXCEPT

The materials price variance is recorded

Which of the following statements is FALSE?

The budgeted overhead costs for standard hours allowed and the overhead costs applied to the product are the same amount

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

A problem with placing excessive emphasis on labour efficiency can be

The difference between actual overhead costs and overhead costs applied is the

Which of the following is NOT considered an advantage of using standard costs?

Once set, normal standards should NOT be changed during the year.

The difference between a budget and a standard is that

An unfavourable labour quantity variance indicates that the actual number of direct labour hours worked was greater than the number of direct labour hours that should have been worked for the output attained.

When a company implements a balanced scorecard approach in its business,

When analyzing period end variance reports, if a variance amount is small the manager should

Standard costs

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