Question 1

A favorable 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 2

If the materials price variance is $3,600 F and the materials quantity and labor variances are each $2,700 U, what is the total materials variance?

Accepted Answer

A) $3,600 F 
B) $2,700 U 
C) $900 F 
D) $4,050 U 
A) $3,600 F 
B) $2,700 U 
C) $900 F 
D) $4,050 U

Question 3

Standard cost cards are the subsidiary ledger for the Work in Process account in a standard cost system.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Allowance for spoilage is part of the direct

Accepted Answer

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

Question 7

The overhead volume variance relates only to fixed overhead costs.

Accepted Answer

A) True 
 B)False

Question 8

The predetermined overhead rate for Zane Company is $5, comprised of a variable overhead rate of $3 and a fixed rate of $2.The amount of budgeted overhead costs at normal capacity of $150,000 was divided by normal capacity of 30,000 direct labor hours, to arrive at the predetermined overhead rate of $5.Actual overhead for June was $9,500 variable and $6,050 fixed, and standard hours allowed for the product produced in June was 3,000 hours. The total overhead variance is

Accepted Answer

A) $3,050 F. 
B) $550 F. 
C) $550 U. 
D) $3,050 U. 
A) $3,050 F. 
B) $550 F. 
C) $550 U. 
D) $3,050 U.

Question 9

The customer perspective of the balanced scorecard approach

Accepted Answer

A) is the most traditional view of the company. 
B) evaluates the internal operating processes critical to the success of the organization. 
C) evaluates how well the company develops and retains its employees. 
D) evaluates the company from the viewpoint of those people who buy its products or services. 
A) is the most traditional view of the company. 
B) evaluates the internal operating processes critical to the success of the organization. 
C) evaluates how well the company develops and retains its employees. 
D) evaluates the company from the viewpoint of those people who buy its products or services.

Question 10

Using standard costs

Accepted Answer

A) makes employees less "cost-conscious." 
B) provides a basis for evaluating cost control. 
C) makes management by exception more difficult. 
D) increases clerical costs. 
A) makes employees less "cost-conscious." 
B) provides a basis for evaluating cost control. 
C) makes management by exception more difficult. 
D) increases clerical costs.

Question 11

The standard direct materials quantity does not include allowances for

Accepted Answer

A) unavoidable waste. 
B) normal spoilage. 
C) unexpected spoilage. 
D) all of the above are included. 
A) unavoidable waste. 
B) normal spoilage. 
C) unexpected spoilage. 
D) all of the above are included.

Question 12

If actual costs are greater than standard costs, there is a(n)

Accepted Answer

A) normal variance. 
B) unfavorable variance. 
C) favorable variance. 
D) error in the accounting system. 
A) normal variance. 
B) unfavorable variance. 
C) favorable variance. 
D) error in the accounting system.

Question 13

A company uses 20,000 pounds of materials for which it paid $6.00 a pound.The materials price variance was $15,000 unfavorable.What is the standard price per pound?

Accepted Answer

A) $0.75 
B) $5.25 
C) $6.00 
D) $6.75 
A) $0.75 
B) $5.25 
C) $6.00 
D) $6.75

Question 14

The balanced scorecard

Accepted Answer

A) incorporates financial and nonfinancial measures in an integrated system. 
B) is based on financial measures. 
C) is based on nonfinancial measures. 
D) does not use financial or nonfinancial measures. 
A) incorporates financial and nonfinancial measures in an integrated system. 
B) is based on financial measures. 
C) is based on nonfinancial measures. 
D) does not use financial or nonfinancial measures.

Question 15

Which one of the following describes the total overhead variance?

Accepted Answer

A) The difference between what was actually incurred and the flexible budget amount 
B) The difference between what was actually incurred and overhead applied 
C) The difference between the overhead applied and the flexible budget amount 
D) The difference between what was actually incurred and the total production budget 
A) The difference between what was actually incurred and the flexible budget amount 
B) The difference between what was actually incurred and overhead applied 
C) The difference between the overhead applied and the flexible budget amount 
D) The difference between what was actually incurred and the total production budget

Question 16

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 17

In Zero Company's income statement, they report actual gross profit of $52,500 and the following variances: $$\begin{array} { l r r } 
\text { Materials price } & \$ 420 \mathrm {~F} \
\text { Materials quantity } & 600 \mathrm {~F} \
\text { Labor price } & 420 \mathrm { U } \
\text { Labor quantity } & 1,000 \mathrm {~F} \
\text { Overhead } & 900 \mathrm {~F}
\end{array}$$ Zero would report gross profit at standard of

Accepted Answer

A) $46,660. 
B) $47,500. 
C) $55,000. 
D) $53,340. 
A) $46,660. 
B) $47,500. 
C) $55,000. 
D) $53,340.

Question 18

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 19

The standard quantity allowed for the units produced was 4,500 pounds, the standard price was $2.50 per pound, and the materials quantity variance was $375 favorable.Each unit uses 1 pound of materials.How many units were actually produced?

Accepted Answer

A) 4,350 
B) 4,500 
C) 11,625 
D) 4,650 
A) 4,350 
B) 4,500 
C) 11,625 
D) 4,650

Question 20

The two levels that standards may be set at are

Accepted Answer

A) normal and fully efficient. 
B) normal and ideal. 
C) ideal and less efficient. 
D) fully efficient and fully effective. 
A) normal and fully efficient. 
B) normal and ideal. 
C) ideal and less efficient. 
D) fully efficient and fully effective.

A favorable variance

If the materials price variance is $3,600 F and the materials quantity and labor variances are each $2,700 U, what is the total materials variance?

Standard cost cards are the subsidiary ledger for the Work in Process account in a standard cost system.

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

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

Allowance for spoilage is part of the direct

The overhead volume variance relates only to fixed overhead costs.

The customer perspective of the balanced scorecard approach

Using standard costs

The standard direct materials quantity does not include allowances for

If actual costs are greater than standard costs, there is a(n)

A company uses 20,000 pounds of materials for which it paid $6.00 a pound.The materials price variance was $15,000 unfavorable.What is the standard price per pound?

The balanced scorecard

Which one of the following describes the total overhead variance?

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

In Zero Company's income statement, they report actual gross profit of $52,500 and the following variances: Materials price \ 420 Materials quantity 600 Labor price 420 Labor quantity 1,000 Overhead 900 Zero would report gross profit at standard of

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

The standard quantity allowed for the units produced was 4,500 pounds, the standard price was $2.50 per pound, and the materials quantity variance was $375 favorable.Each unit uses 1 pound of materials.How many units were actually produced?

The two levels that standards may be set at are

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Time Value of Money and Present Value Calculations

Filters

Exam 11: Reporting and Analyzing Stockholders Equity

A favorable variance

If the materials price variance is $3,600 F and the materials quantity and labor variances are each $2,700 U, what is the total materials variance?

Standard cost cards are the subsidiary ledger for the Work in Process account in a standard cost system.

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

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

Allowance for spoilage is part of the direct

The overhead volume variance relates only to fixed overhead costs.

The customer perspective of the balanced scorecard approach

Using standard costs

The standard direct materials quantity does not include allowances for

If actual costs are greater than standard costs, there is a(n)

A company uses 20,000 pounds of materials for which it paid $6.00 a pound.The materials price variance was $15,000 unfavorable.What is the standard price per pound?

The balanced scorecard

Which one of the following describes the total overhead variance?

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

In Zero Company's income statement, they report actual gross profit of $52,500 and the following variances: Materials price \ 420 Materials quantity 600 Labor price 420 Labor quantity 1,000 Overhead 900 Zero would report gross profit at standard of

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

The standard quantity allowed for the units produced was 4,500 pounds, the standard price was $2.50 per pound, and the materials quantity variance was $375 favorable.Each unit uses 1 pound of materials.How many units were actually produced?

The two levels that standards may be set at are

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Time Value of Money and Present Value Calculations

Filters