Question 1

The cost of freight-in

Accepted Answer

A) is to be included in the standard cost of direct materials. 
B) is considered a selling expense. 
C) should have a separate standard apart from direct materials. 
D) should not be included in a standard cost system. 
A) is to be included in the standard cost of direct materials. 
B) is considered a selling expense. 
C) should have a separate standard apart from direct materials. 
D) should not be included in a standard cost system.

Question 2

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

Accepted Answer

A) $1,200 U. 
B) $1,200 F. 
C) $1,320 F. 
D) $1,320 U. 
A) $1,200 U. 
B) $1,200 F. 
C) $1,320 F. 
D) $1,320 U.

Question 3

In Zero Company's income statement, they report gross profit of $55,000 at standard 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 actual gross profit of

Accepted Answer

A) $51,660. 
B) $52,500. 
C) $57,500. 
D) $58,340. 
A) $51,660. 
B) $52,500. 
C) $57,500. 
D) $58,340.

Question 4

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 5

In reporting variances,

Accepted Answer

A) promptness is relatively unimportant. 
B) management normally investigates all variances. 
C) the reports should facilitate management by exception. 
D) the reports are not departmentalized. 
A) promptness is relatively unimportant. 
B) management normally investigates all variances. 
C) the reports should facilitate management by exception. 
D) the reports are not departmentalized.

Question 6

Normal standards incorporate normal contingencies of production into the standards.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) at the bottom of the income statement. 
B) at the bottom of the balance sheet. 
C) on the standard cost card. 
D) in the Work in Process Inventory account. 
A) at the bottom of the income statement. 
B) at the bottom of the balance sheet. 
C) on the standard cost card. 
D) in the Work in Process Inventory account.

Question 8

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 9

A total materials variance is analyzed in terms of

Accepted Answer

A) price and quantity variances. 
B) buy and sell variances. 
C) quantity and quality variances. 
D) tight and loose variances. 
A) price and quantity variances. 
B) buy and sell variances. 
C) quantity and quality variances. 
D) tight and loose variances.

Question 10

The direct materials quantity standard would not be expressed in

Accepted Answer

A) pounds. 
B) barrels. 
C) dollars. 
D) board feet. 
A) pounds. 
B) barrels. 
C) dollars. 
D) board feet.

Question 11

Variance reports are

Accepted Answer

A) external financial reports. 
B) SEC financial reports. 
C) internal reports for management. 
D) all of these. 
A) external financial reports. 
B) SEC financial reports. 
C) internal reports for management. 
D) all of these.

Question 12

A managerial accountant
1.	does not participate in the standard setting process.
2.	provides knowledge of cost behaviors in the standard setting process.
3.	provides input of historical costs to the standard setting process.

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 2 and 3 
A) 1 
B) 2 
C) 3 
D) 2 and 3

Question 13

Oxnard Industries produces a product that requires 2.6 pounds of materials per unit.The allowance for waste and spoilage per unit is .3 pounds and .1 pounds, respectively.The purchase price is $2 per pound, but a 2% discount is usually taken.Freight costs are $.10 per pound, and receiving and handling costs are $.07 per pound.The hourly wage rate is $12.00 per hour, but a raise which will average $.30 will go into effect soon.Payroll taxes are $1.20 per hour, and fringe benefits average $2.40 per hour.Standard production time is 1 hour per unit, and the allowance for rest periods and setup is .2 hours and .1 hours, respectively.
-The standard direct labor hours per unit is

Accepted Answer

A) 1 hour. 
B) 1.1 hours. 
C) 1.2 hours. 
D) 1.3 hours. 
A) 1 hour. 
B) 1.1 hours. 
C) 1.2 hours. 
D) 1.3 hours.

Question 14

Dillon has a standard of 1.5 pounds of materials per unit, at $6 per pound.In producing 2,000 units, Dillon used 3,100 pounds of materials at a total cost of $18,135.
-Dillon's materials price variance is

Accepted Answer

A) $135 U. 
B) $465 F. 
C) $600 F. 
D) $1,050 F. 
A) $135 U. 
B) $465 F. 
C) $600 F. 
D) $1,050 F.

Question 15

Most companies that use standards set them at

Accepted Answer

A) the normal level. 
B) a conceivable level. 
C) the ideal level. 
D) last year's level. 
A) the normal level. 
B) a conceivable level. 
C) the ideal level. 
D) last year's level.

Question 16

Actual costs that vary from standard costs always indicate inefficiencies.

Accepted Answer

A) True 
 B)False

Question 17

A company developed the following per-unit standards for its product: 2 pounds of direct materials at $4 per pound.Last month, 1,500 pounds of direct materials were purchased for $5,700.The direct materials price variance for last month was

Accepted Answer

A) $5,700 favorable. 
B) $300 favorable. 
C) $150 favorable. 
D) $300 unfavorable. 
A) $5,700 favorable. 
B) $300 favorable. 
C) $150 favorable. 
D) $300 unfavorable.

Question 18

Denmark Corporation's variance report for the purchasing department reports 1,000 units of material A purchased and 2,400 units of material B purchased.It also reports standard prices of $2 for Material A and $3 for Material B.Actual prices reported are $2.10 for Material A and $2.80 for Material B.Denmark should report a total price variance of

Accepted Answer

A) $380 F. 
B) $340 F. 
C) $340 U. 
D) $380 U. 
A) $380 F. 
B) $340 F. 
C) $340 U. 
D) $380 U.

Question 19

The labor time requirements for standards may be determined by the

Accepted Answer

A) sales manager. 
B) product manager. 
C) industrial engineers. 
D) payroll department manager. 
A) sales manager. 
B) product manager. 
C) industrial engineers. 
D) payroll department manager.

Question 20

Dillon has a standard of 2 hours of labor per unit, at $12 per hour.In producing 2,000 units, Dillon used 3,850 hours of labor at a total cost of $46,970.
-Dillon's labor quantity variance is

Accepted Answer

A) $770 U. 
B) $770 F. 
C) $1,800 F. 
D) $1,930 F. 
A) $770 U. 
B) $770 F. 
C) $1,800 F. 
D) $1,930 F.

The cost of freight-in

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

In Zero Company's income statement, they report gross profit of $55,000 at standard and the following variances: Materials price \ 420 Materials quantity 600 Labor price 420 Labor quantity 1,000 Overhead 900 Zero would report actual gross profit of

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

In reporting variances,

Normal standards incorporate normal contingencies of production into the standards.

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

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

A total materials variance is analyzed in terms of

The direct materials quantity standard would not be expressed in

Variance reports are

A managerial accountant 1. does not participate in the standard setting process. 2. provides knowledge of cost behaviors in the standard setting process. 3. provides input of historical costs to the standard setting process.

Dillon has a standard of 1.5 pounds of materials per unit, at $6 per pound.In producing 2,000 units, Dillon used 3,100 pounds of materials at a total cost of $18,135. -Dillon's materials price variance is

Most companies that use standards set them at

Actual costs that vary from standard costs always indicate inefficiencies.

A company developed the following per-unit standards for its product: 2 pounds of direct materials at $4 per pound.Last month, 1,500 pounds of direct materials were purchased for $5,700.The direct materials price variance for last month was

The labor time requirements for standards may be determined by the

Dillon has a standard of 2 hours of labor per unit, at $12 per hour.In producing 2,000 units, Dillon used 3,850 hours of labor at a total cost of $46,970. -Dillon's labor quantity variance is

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

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Exam 11: Reporting and Analyzing Stockholders Equity

The cost of freight-in

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

In Zero Company's income statement, they report gross profit of $55,000 at standard and the following variances: Materials price \ 420 Materials quantity 600 Labor price 420 Labor quantity 1,000 Overhead 900 Zero would report actual gross profit of

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

In reporting variances,

Normal standards incorporate normal contingencies of production into the standards.

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

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

A total materials variance is analyzed in terms of

The direct materials quantity standard would not be expressed in

Variance reports are

A managerial accountant 1. does not participate in the standard setting process. 2. provides knowledge of cost behaviors in the standard setting process. 3. provides input of historical costs to the standard setting process.

Dillon has a standard of 1.5 pounds of materials per unit, at $6 per pound.In producing 2,000 units, Dillon used 3,100 pounds of materials at a total cost of $18,135. -Dillon's materials price variance is

Most companies that use standards set them at

Actual costs that vary from standard costs always indicate inefficiencies.

A company developed the following per-unit standards for its product: 2 pounds of direct materials at $4 per pound.Last month, 1,500 pounds of direct materials were purchased for $5,700.The direct materials price variance for last month was

The labor time requirements for standards may be determined by the

Dillon has a standard of 2 hours of labor per unit, at $12 per hour.In producing 2,000 units, Dillon used 3,850 hours of labor at a total cost of $46,970. -Dillon's labor quantity variance is

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

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