Question 1

In concept, standards and budgets are essentially the same.

Accepted Answer

A) True 
 B)False

Question 2

Debit balances in variance accounts represent

Accepted Answer

A)  unfavorable variances. 
B)  favorable variances. 
C)  favorable for price variances; unfavorable for quantity variances. 
D)  favorable for quantity variances; unfavorable for price variances. 
A)  unfavorable variances. 
B)  favorable variances. 
C)  favorable for price variances; unfavorable for quantity variances. 
D)  favorable for quantity variances; unfavorable for price variances.

Question 3

Edgar, Inc. has a materials price standard of $2.00 per pound. Six thousand pounds of materials were purchased at $2.20 a pound. The actual quantity of materials used was 6,000 pounds, although the standard quantity allowed for the output was 5,400 pounds. Edgar, Inc.'s materials price variance is

Accepted Answer

A)  $120 U. 
B)  $1,200 U. 
C)  $1,080 U. 
D)  $1,200 F. 
A)  $120 U. 
B)  $1,200 U. 
C)  $1,080 U. 
D)  $1,200 F.

Question 4

Monster Company produces a product requiring 3 direct labor hours at $16.00 per hour. During January, 2,000 products are produced using 6,300 direct labor hours. Monster's actual payroll during January was $98,280. What is the labor quantity variance?

Accepted Answer

A)  $2,280 U 
B)  $4,800 F 
C)  $2,520 F 
D)  $4,800 U 
A)  $2,280 U 
B)  $4,800 F 
C)  $2,520 F 
D)  $4,800 U

Question 5

The per-unit standards for direct labor are 2 direct labor hours at $15 per hour. If in producing 1,800 units, the actual direct labor cost was $48,000 for 3,000 direct labor hours worked, the total direct labor variance is

Accepted Answer

A)  $1,800 unfavorable. 
B)  $6,000 favorable. 
C)  $3,750 unfavorable. 
D)  $6,000 unfavorable. 
A)  $1,800 unfavorable. 
B)  $6,000 favorable. 
C)  $3,750 unfavorable. 
D)  $6,000 unfavorable.

Question 6

The following information was taken from the annual manufacturing overhead cost budget of Fergie Manufacturing. $\begin{array}{l}
\begin{array}{lr}
\text { Variable manufacturing overhead costs } & \$ 92,400 \
\text { Fixed manufacturing overhead costs } & \$ 55,440 \
\text { Normal production level in labor hours } & 30,800 \
\text { Normal production level in units } & 5,775
\end{array}\
\text { Standard labor hours per unit }
\end{array}$ During the year, 5,600 units were produced, 18,340 hours were worked, and the actual manufacturing overhead was $151,200. Actual fixed manufacturing overhead costs equaled budgeted fixed manufacturing overhead costs. Overhead is applied on the basis of direct labor hours. Fergie's volume overhead variance is

Accepted Answer

A)  $1,680 U. 
B)  $6,160 U. 
C)  $7,840 U. 
D)  $22,400 U. 
A)  $1,680 U. 
B)  $6,160 U. 
C)  $7,840 U. 
D)  $22,400 U.

Question 7

Which one of the following statements is true?

Accepted Answer

A)  If the materials price variance is unfavorable, then the materials quantity variance must also be unfavorable. 
B)  If the materials price variance is unfavorable, then the materials quantity variance must be favorable. 
C)  Price and quantity variances move in the same direction. If one is favorable, the others will be as well. 
D)  There is no correlation of favorable or unfavorable for price and quantity variances. 
A)  If the materials price variance is unfavorable, then the materials quantity variance must also be unfavorable. 
B)  If the materials price variance is unfavorable, then the materials quantity variance must be favorable. 
C)  Price and quantity variances move in the same direction. If one is favorable, the others will be as well. 
D)  There is no correlation of favorable or unfavorable for price and quantity variances.

Question 8

If production exceeds normal capacity, the overhead volume variance will be favorable.

Accepted Answer

A) True 
 B)False

Question 9

The perspectives included in the balanced scorecard approach include all of the following except the

Accepted Answer

A)  internal process perspective. 
B)  capacity utilization perspective. 
C)  learning and growth perspective. 
D)  customer perspective. 
A)  internal process perspective. 
B)  capacity utilization perspective. 
C)  learning and growth perspective. 
D)  customer perspective.

Question 10

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 11

The investigation of a materials quantity variance usually begins in the

Accepted Answer

A)  production department. 
B)  purchasing department. 
C)  sales department. 
D)  controller's department. 
A)  production department. 
B)  purchasing department. 
C)  sales department. 
D)  controller's department.

Question 12

If a company incurs direct labor cost of $82,000 when the standard cost is $84,000, it will

Accepted Answer

A)  debit Labor Price Variance for $2,000. 
B)  credit Labor Price Variance for $2,000. 
C)  debit Labor Quantity Variance for $2,000. 
D)  credit Labor Quantity Variance for $2,000. 
A)  debit Labor Price Variance for $2,000. 
B)  credit Labor Price Variance for $2,000. 
C)  debit Labor Quantity Variance for $2,000. 
D)  credit Labor Quantity Variance for $2,000.

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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 answers are correct. 
A)  expressed in total dollars. 
B)  expressed on a per-unit basis. 
C)  expressed on a percentage basis. 
D)  All of these answers are correct.

Question 15

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 16

Which is not one of the four most commonly used perspectives on a balanced scorecard?

Accepted Answer

A)  The financial perspective 
B)  The customer perspective 
C)  The external process perspective 
D)  The learning and growth perspective 
A)  The financial perspective 
B)  The customer perspective 
C)  The external process perspective 
D)  The learning and growth perspective

Question 17

Parnell Company prepared its income statement for internal use. How would amounts for cost of goods sold and variances appear?

Accepted Answer

A)  Cost of goods sold would be at actual costs, and variances would be reported separately. 
B)  Cost of goods sold would be combined with the variances, and the net amount reported at standard cost. 
C)  Cost of goods sold would be at standard costs, and variances would be reported separately. 
D)  Cost of goods sold would be combined with the variances, and the net amount reported at actual cost. 
A)  Cost of goods sold would be at actual costs, and variances would be reported separately. 
B)  Cost of goods sold would be combined with the variances, and the net amount reported at standard cost. 
C)  Cost of goods sold would be at standard costs, and variances would be reported separately. 
D)  Cost of goods sold would be combined with the variances, and the net amount reported at actual cost.

Question 18

Budgeted overhead for Haft, Inc. at normal capacity of 60,000 direct labor hours is $3 per hour variable and $2 per hour fixed. In May, $310,000 of overhead was incurred in working 63,000 hours when 64,000 standard hours were allowed. The overhead volume variance is

Accepted Answer

A)  $8,000 favorable. 
B)  $11,000 favorable. 
C)  $5,000 favorable. 
D)  $10,000 favorable. 
A)  $8,000 favorable. 
B)  $11,000 favorable. 
C)  $5,000 favorable. 
D)  $10,000 favorable.

Question 19

Standard cost + price variance + quantity variance = Budgeted cost.

Accepted Answer

A) True 
 B)False

Question 20

What is a standard cost?

Accepted Answer

A)  The total number of units times the budgeted amount expected 
B)  Any amount that appears on a budget 
C)  The total amount that appears on the budget for product costs 
D)  The amount management thinks should be incurred to produce a good or service 
A)  The total number of units times the budgeted amount expected 
B)  Any amount that appears on a budget 
C)  The total amount that appears on the budget for product costs 
D)  The amount management thinks should be incurred to produce a good or service

In concept, standards and budgets are essentially the same.

Debit balances in variance accounts represent

Edgar, Inc. has a materials price standard of $2.00 per pound. Six thousand pounds of materials were purchased at $2.20 a pound. The actual quantity of materials used was 6,000 pounds, although the standard quantity allowed for the output was 5,400 pounds. Edgar, Inc.'s materials price variance is

Monster Company produces a product requiring 3 direct labor hours at $16.00 per hour. During January, 2,000 products are produced using 6,300 direct labor hours. Monster's actual payroll during January was $98,280. What is the labor quantity variance?

The per-unit standards for direct labor are 2 direct labor hours at $15 per hour. If in producing 1,800 units, the actual direct labor cost was $48,000 for 3,000 direct labor hours worked, the total direct labor variance is

Which one of the following statements is true?

If production exceeds normal capacity, the overhead volume variance will be favorable.

The perspectives included in the balanced scorecard approach include all of the following except the

Which of the following statements about standard costs is false?

The investigation of a materials quantity variance usually begins in the

If a company incurs direct labor cost of $82,000 when the standard cost is $84,000, it will

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

Variances from standards are

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.

Which is not one of the four most commonly used perspectives on a balanced scorecard?

Parnell Company prepared its income statement for internal use. How would amounts for cost of goods sold and variances appear?

Budgeted overhead for Haft, Inc. at normal capacity of 60,000 direct labor hours is $3 per hour variable and $2 per hour fixed. In May, $310,000 of overhead was incurred in working 63,000 hours when 64,000 standard hours were allowed. The overhead volume variance is

Standard cost + price variance + quantity variance = Budgeted cost.

What is a standard cost?

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Planning for Capital Investments

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 11: Standard Costs and Balanced Scorecard

In concept, standards and budgets are essentially the same.

Debit balances in variance accounts represent

Edgar, Inc. has a materials price standard of $2.00 per pound. Six thousand pounds of materials were purchased at $2.20 a pound. The actual quantity of materials used was 6,000 pounds, although the standard quantity allowed for the output was 5,400 pounds. Edgar, Inc.'s materials price variance is

Monster Company produces a product requiring 3 direct labor hours at $16.00 per hour. During January, 2,000 products are produced using 6,300 direct labor hours. Monster's actual payroll during January was $98,280. What is the labor quantity variance?

The per-unit standards for direct labor are 2 direct labor hours at $15 per hour. If in producing 1,800 units, the actual direct labor cost was $48,000 for 3,000 direct labor hours worked, the total direct labor variance is

Which one of the following statements is true?

If production exceeds normal capacity, the overhead volume variance will be favorable.

The perspectives included in the balanced scorecard approach include all of the following except the

Which of the following statements about standard costs is false?

The investigation of a materials quantity variance usually begins in the

If a company incurs direct labor cost of $82,000 when the standard cost is $84,000, it will

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

Variances from standards are

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.

Which is not one of the four most commonly used perspectives on a balanced scorecard?

Parnell Company prepared its income statement for internal use. How would amounts for cost of goods sold and variances appear?

Budgeted overhead for Haft, Inc. at normal capacity of 60,000 direct labor hours is $3 per hour variable and $2 per hour fixed. In May, $310,000 of overhead was incurred in working 63,000 hours when 64,000 standard hours were allowed. The overhead volume variance is

Standard cost + price variance + quantity variance = Budgeted cost.

What is a standard cost?

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Planning for Capital Investments

Statement of Cash Flows

Financial Statement Analysis

Filters