Question 1

The direct labour quantity standard is sometimes called the direct labour

Accepted Answer

A) volume standard. 
B) effectiveness standard. 
C) efficiency standard. 
D) quality standard. 
A) volume standard. 
B) effectiveness standard. 
C) efficiency standard. 
D) quality standard.

Question 2

A favourable variance

Accepted Answer

A) is an indication that the company is not operating in an optimal manner. 
B) implies a positive result if quality control standards are met. 
C) implies a positive result if standards are flexible. 
D) means that standards are too loosely specified. 
A) is an indication that the company is not operating in an optimal manner. 
B) implies a positive result if quality control standards are met. 
C) implies a positive result if standards are flexible. 
D) means that standards are too loosely specified.

Question 3

Inventories CANNOT be valued at standard cost in financial statements.

Accepted Answer

A) True 
 B)False

Question 4

If standard cost reports emphasize meeting predetermined standards

Accepted Answer

A) there should be non-financial performance measures available to management to supplement the cost reports. 
B) management can control the department properly with standard cost reports. 
C) the budget process should be sufficient to support management's performance. 
D) all members of the team will be able to properly identify critical variance issues. 
A) there should be non-financial performance measures available to management to supplement the cost reports. 
B) management can control the department properly with standard cost reports. 
C) the budget process should be sufficient to support management's performance. 
D) all members of the team will be able to properly identify critical variance issues.

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

In designing a balanced scorecard approach for its operations, a company should

Accepted Answer

A) seek to determine as much detail as possible from its activities. 
B) be readily available as a discussion tool between management and shareholders. 
C) attempt to link performance measures on a cause and effect basis. 
D) eliminate any financial results as these will be dealt with in. 
A) seek to determine as much detail as possible from its activities. 
B) be readily available as a discussion tool between management and shareholders. 
C) attempt to link performance measures on a cause and effect basis. 
D) eliminate any financial results as these will be dealt with in.

Question 7

Allowance for spoilage is part of the direct

Accepted Answer

A) materials price standard. 
B) materials quantity standard. 
C) labour price standard. 
D) labour quantity standard. 
A) materials price standard. 
B) materials quantity standard. 
C) labour price standard. 
D) labour quantity standard.

Question 8

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 9

Standard cost is the industry average cost for a particular item.

Accepted Answer

A) True 
 B)False

Question 10

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 11

A direct labour price standard is frequently called the direct labour efficiency standard.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements is FALSE?

Accepted Answer

A) A standard cost is more accurate than a budgeted cost. 
B) A standard is a unit amount. 
C) In concept, standards and budgets are essentially the same. 
D) The standard cost of a product is equivalent to the budgeted cost per unit of product. 
A) A standard cost is more accurate than a budgeted cost. 
B) A standard is a unit amount. 
C) In concept, standards and budgets are essentially the same. 
D) The standard cost of a product is equivalent to the budgeted cost per unit of product.

Question 13

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 materials price variance is

Accepted Answer

A) $400 U. 
B) $400 F. 
C) $350 U. 
D) $300 F. 
A) $400 U. 
B) $400 F. 
C) $350 U. 
D) $300 F.

Question 14

An unfavourable labour quantity variance may be caused by

Accepted Answer

A) paying workers higher wages than expected. 
B) paying workers a bonus at year-end. 
C) worker fatigue or carelessness. 
D) higher pay rates mandated by union contracts. 
A) paying workers higher wages than expected. 
B) paying workers a bonus at year-end. 
C) worker fatigue or carelessness. 
D) higher pay rates mandated by union contracts.

Question 15

A standard cost system may be used with

Accepted Answer

A) job order costing only. 
B) process costing only. 
C) activity-based costing. 
D) either job order or process costing. 
A) job order costing only. 
B) process costing only. 
C) activity-based costing. 
D) either job order or process costing.

Question 16

The formula for the materials price variance is

Accepted Answer

A) (AQ × SP)- (SQ × SP). 
B) (AQ × AP)- (AQ × SP). 
C) (AQ × AP)- (SQ × SP). 
D) (AQ × SP)- (SQ × AP). 
A) (AQ × SP)- (SQ × SP). 
B) (AQ × AP)- (AQ × SP). 
C) (AQ × AP)- (SQ × SP). 
D) (AQ × SP)- (SQ × AP).

Question 17

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 18

Which of the following statements about standard costs is FALSE?

Accepted Answer

A) Properly set standards should promote efficiency. 
B) Standard costs facilitate management planning. 
C) Standards should not be used in "management by exception." 
D) Standard costs can simplify the costing of inventories. 
A) Properly set standards should promote efficiency. 
B) Standard costs facilitate management planning. 
C) Standards should not be used in "management by exception." 
D) Standard costs can simplify the costing of inventories.

Question 19

The matrix approach to variance analysis

Accepted Answer

A) will yield slightly different variances than the formula approach. 
B) is more accurate than the formula approach. 
C) does not separate the price and quantity variance calculations. 
D) provides a convenient structure for determining each variance. 
A) will yield slightly different variances than the formula approach. 
B) is more accurate than the formula approach. 
C) does not separate the price and quantity variance calculations. 
D) provides a convenient structure for determining each variance.

Question 20

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.

The direct labour quantity standard is sometimes called the direct labour

A favourable variance

Inventories CANNOT be valued at standard cost in financial statements.

If standard cost reports emphasize meeting predetermined standards

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

In designing a balanced scorecard approach for its operations, a company should

Allowance for spoilage is part of the direct

The difference between fixed overhead budgeted and overhead applied is the

Standard cost is the industry average cost for a particular item.

A direct labour price standard is frequently called the direct labour efficiency standard.

Which of the following statements is FALSE?

An unfavourable labour quantity variance may be caused by

A standard cost system may be used with

The formula for the materials price variance is

Labour efficiency is measured by the

Which of the following statements about standard costs is FALSE?

The matrix approach to variance analysis

In using variance reports, management looks for

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 direct labour quantity standard is sometimes called the direct labour

A favourable variance

Inventories CANNOT be valued at standard cost in financial statements.

If standard cost reports emphasize meeting predetermined standards

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

In designing a balanced scorecard approach for its operations, a company should

Allowance for spoilage is part of the direct

The difference between fixed overhead budgeted and overhead applied is the

Standard cost is the industry average cost for a particular item.

A direct labour price standard is frequently called the direct labour efficiency standard.

Which of the following statements is FALSE?

An unfavourable labour quantity variance may be caused by

A standard cost system may be used with

The formula for the materials price variance is

Labour efficiency is measured by the

Which of the following statements about standard costs is FALSE?

The matrix approach to variance analysis

In using variance reports, management looks for

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