Exam 11: Standard Costs and Balanced Scorecard

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 quantity variance is

Income statements prepared internally for management often show cost of goods sold at standard cost and variances are

Hofburg's standard quantities for 1 unit of product include 2 pounds of materials and 1.5 labor hours. The standard rates are $2 per pound and $7 per hour. The standard overhead rate is $8 per direct labor hour. The total standard cost of Hofburg's product is

Normal standards incorporate normal contingencies of production into the standards.

Which of the following statements is false?

Ideal standards

The starting point for determining the causes of an unfavorable materials price variance is the purchasing department.

An unfavorable labor quantity variance may be caused by

The difference between the actual labor rate multiplied by the actual labor hours worked and the standard labor rate multiplied by the standard labor hours is the

The total variance is $35,000. The total materials variance is $14,000. The total labor variance is twice the total overhead variance. What is the total overhead variance?

If the labor quantity variance is unfavorable and the cause is inefficient use of direct labor, the responsibility rests with the

The overhead volume variance relates only to

The direct materials quantity standard should

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

In reporting variances,

Allowance for spoilage is part of the direct

The overhead controllable variance is the difference between the

Actual costs that vary from standard costs always indicate inefficiencies.

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

The standard predetermined overhead rate used in setting the standard overhead cost is determined by dividing