Question 1

An unfavorable labor quantity variance may be caused by

Accepted Answer

A) paying workers higher wages than expected. 
B) misallocation of workers. 
C) worker fatigue or carelessness. 
D) higher pay rates mandated by union contracts. 
A) paying workers higher wages than expected. 
B) misallocation of workers. 
C) worker fatigue or carelessness. 
D) higher pay rates mandated by union contracts.

Question 2

Once set, normal standards should not be changed during the year.

Accepted Answer

A) True 
 B)False

Question 3

If actual direct materials costs are greater than standard direct materials costs, it means that

Accepted Answer

A) actual costs were calculated incorrectly. 
B) the actual unit price of direct materials was greater than the standard unit price of direct materials. 
C) the actual unit price of raw materials or the actual quantities of raw materials used was greater than the standard unit price or standard quantities of raw materials expected. 
D) the purchasing agent or the production foreman is inefficient. 
A) actual costs were calculated incorrectly. 
B) the actual unit price of direct materials was greater than the standard unit price of direct materials. 
C) the actual unit price of raw materials or the actual quantities of raw materials used was greater than the standard unit price or standard quantities of raw materials expected. 
D) the purchasing agent or the production foreman is inefficient.

Question 4

A company uses 8,400 pounds of materials and exceeds the standard by 300 pounds.The quantity variance is $1,800 unfavorable.What is the standard price?

Accepted Answer

A) $2 
B) $4 
C) $6 
D) Cannot be determined from the data provided. 
A) $2 
B) $4 
C) $6 
D) Cannot be determined from the data provided.

Question 5

The materials price standard is based on the purchasing department's best estimate of the cost of raw materials.

Accepted Answer

A) True 
 B)False

Question 6

Using standard costs

Accepted Answer

A) can make management planning more difficult. 
B) promotes greater economy. 
C) does not help in setting prices. 
D) weakens management control. 
A) can make management planning more difficult. 
B) promotes greater economy. 
C) does not help in setting prices. 
D) weakens management control.

Question 7

The difference between a budget and a standard is that

Accepted Answer

A) a budget expresses what costs were, while a standard expresses what costs should be. 
B) a budget expresses management's plans, while a standard reflects what actually happened. 
C) a budget expresses a total amount, while a standard expresses a unit amount. 
D) standards are excluded from the cost accounting system, whereas budgets are generally incorporated into the cost accounting system. 
A) a budget expresses what costs were, while a standard expresses what costs should be. 
B) a budget expresses management's plans, while a standard reflects what actually happened. 
C) a budget expresses a total amount, while a standard expresses a unit amount. 
D) standards are excluded from the cost accounting system, whereas budgets are generally incorporated into the cost accounting system.

Question 8

A standard cost is

Accepted Answer

A) a cost which is paid for a group of similar products. 
B) the average cost in an industry. 
C) a predetermined cost. 
D) the historical cost of producing a product last year. 
A) a cost which is paid for a group of similar products. 
B) the average cost in an industry. 
C) a predetermined cost. 
D) the historical cost of producing a product last year.

Question 9

Which department is usually responsible for a labor price variance attributable to misallocation of workers?

Accepted Answer

A) Quality control 
B) Purchasing 
C) Engineering 
D) Production 
A) Quality control 
B) Purchasing 
C) Engineering 
D) Production

Question 10

Normal standards should be rigorous but attainable.

Accepted Answer

A) True 
 B)False

Question 11

A company uses 40,000 gallons of materials for which they paid $7.00 a gallon.The materials price variance was $80,000 favorable.What is the standard price per gallon?

Accepted Answer

A) $2 
B) $5 
C) $7 
D) $9 
A) $2 
B) $5 
C) $7 
D) $9

Question 12

The standard unit cost is used in the calculation of which of the following variances? $$\begin{array} { l l l } 
& \text { Materials Price Variance } & \text { Materials Quantity Variance } \
\text { a. } & \text { No } & \text { No } \
\text { b. } & \text { No } & \text { Yes } \
\text { c. } & \text { Yes } & \text { No } \
\text { d. } & \text { Yes } & \text { Yes }
\end{array}$$

Accepted Answer

The answer of The standard unit cost is used in...

Question 13

There could be instances where the production department is responsible for a direct materials price variance.

Accepted Answer

A) True 
 B)False

Question 14

A manufacturing company would include setup and downtime in their 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 15

The per-unit standards for direct labor are 1.5 direct labor hours at $15 per hour.If in producing 2,400 units, the actual direct labor cost was $46,000 for 3,000 direct labor hours worked, the total direct labor variance is

Accepted Answer

A) $2,400 unfavorable. 
B) $8,000 favorable. 
C) $5,000 unfavorable. 
D) $8,000 unfavorable. 
A) $2,400 unfavorable. 
B) $8,000 favorable. 
C) $5,000 unfavorable. 
D) $8,000 unfavorable.

Question 16

Standards based on the optimum level of performance under perfect operating conditions are

Accepted Answer

A) attainable standards. 
B) ideal standards. 
C) normal standards. 
D) practical standards. 
A) attainable standards. 
B) ideal standards. 
C) normal standards. 
D) practical standards.

Question 17

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 18

If standard costs are incorporated into the accounting system,

Accepted Answer

A) it may simplify the costing of inventories and reduce clerical costs. 
B) it can eliminate the need for the budgeting process. 
C) the accounting system will produce information which is less relevant than the historical cost accounting system. 
D) approval of the shareholders is required. 
A) it may simplify the costing of inventories and reduce clerical costs. 
B) it can eliminate the need for the budgeting process. 
C) the accounting system will produce information which is less relevant than the historical cost accounting system. 
D) approval of the shareholders is required.

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

Atkins, Inc.produces a product requiring 8 pounds of material at $1.50 per pound.Atkins produced 10,000 units of this product during 2013 resulting in a $30,000 unfavorable materials quantity variance.How many pounds of direct material did Atkins use during 2013?

Accepted Answer

A) 100,000 pounds 
B) 80,000 pounds 
C) 160,000 pounds 
D) 125,000 pounds 
A) 100,000 pounds 
B) 80,000 pounds 
C) 160,000 pounds 
D) 125,000 pounds

An unfavorable labor quantity variance may be caused by

Once set, normal standards should not be changed during the year.

If actual direct materials costs are greater than standard direct materials costs, it means that

A company uses 8,400 pounds of materials and exceeds the standard by 300 pounds.The quantity variance is $1,800 unfavorable.What is the standard price?

The materials price standard is based on the purchasing department's best estimate of the cost of raw materials.

Using standard costs

The difference between a budget and a standard is that

A standard cost is

Which department is usually responsible for a labor price variance attributable to misallocation of workers?

Normal standards should be rigorous but attainable.

A company uses 40,000 gallons of materials for which they paid $7.00 a gallon.The materials price variance was $80,000 favorable.What is the standard price per gallon?

The standard unit cost is used in the calculation of which of the following variances? Materials Price Variance Materials Quantity Variance a. No No b. No Yes c. Yes No d. Yes Yes

There could be instances where the production department is responsible for a direct materials price variance.

A manufacturing company would include setup and downtime in their direct

The per-unit standards for direct labor are 1.5 direct labor hours at $15 per hour.If in producing 2,400 units, the actual direct labor cost was $46,000 for 3,000 direct labor hours worked, the total direct labor variance is

Standards based on the optimum level of performance under perfect operating conditions are

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.

If standard costs are incorporated into the accounting system,

The matrix approach to variance analysis

Atkins, Inc.produces a product requiring 8 pounds of material at $1.50 per pound.Atkins produced 10,000 units of this product during 2013 resulting in a $30,000 unfavorable materials quantity variance.How many pounds of direct material did Atkins use during 2013?

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

An unfavorable labor quantity variance may be caused by

Once set, normal standards should not be changed during the year.

If actual direct materials costs are greater than standard direct materials costs, it means that

A company uses 8,400 pounds of materials and exceeds the standard by 300 pounds.The quantity variance is $1,800 unfavorable.What is the standard price?

The materials price standard is based on the purchasing department's best estimate of the cost of raw materials.

Using standard costs

The difference between a budget and a standard is that

A standard cost is

Which department is usually responsible for a labor price variance attributable to misallocation of workers?

Normal standards should be rigorous but attainable.

A company uses 40,000 gallons of materials for which they paid $7.00 a gallon.The materials price variance was $80,000 favorable.What is the standard price per gallon?

The standard unit cost is used in the calculation of which of the following variances? Materials Price Variance Materials Quantity Variance a. No No b. No Yes c. Yes No d. Yes Yes

There could be instances where the production department is responsible for a direct materials price variance.

A manufacturing company would include setup and downtime in their direct

The per-unit standards for direct labor are 1.5 direct labor hours at $15 per hour.If in producing 2,400 units, the actual direct labor cost was $46,000 for 3,000 direct labor hours worked, the total direct labor variance is

Standards based on the optimum level of performance under perfect operating conditions are

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.

If standard costs are incorporated into the accounting system,

The matrix approach to variance analysis

Atkins, Inc.produces a product requiring 8 pounds of material at $1.50 per pound.Atkins produced 10,000 units of this product during 2013 resulting in a $30,000 unfavorable materials quantity variance.How many pounds of direct material did Atkins use during 2013?

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