Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Standard costs may be incorporated into the accounts in the general ledger.

Accepted Answer

A) True 
 B)False

Question 3

A standard cost system may be used with a job order cost system but not with a process cost system.

Accepted Answer

A) True 
 B)False

Question 4

The standard predetermined overhead rate must be based on direct labor hours as the standard activity index.

Accepted Answer

A) True 
 B)False

Question 5

When is a variance considered to be 'material'?

Accepted Answer

A) When it is large compared to the actual cost 
B) When it is infrequent 
C) When it is unfavorable 
D) When it could have been controlled more effectively 
A) When it is large compared to the actual cost 
B) When it is infrequent 
C) When it is unfavorable 
D) When it could have been controlled more effectively

Question 6

Labor efficiency is measured by the

Accepted Answer

A) materials quantity variance. 
B) total labor variance. 
C) labor quantity variance. 
D) labor rate variance. 
A) materials quantity variance. 
B) total labor variance. 
C) labor quantity variance. 
D) labor rate variance.

Question 7

The purchasing agent of the Poplin, Inc.ordered materials of lower quality in an effort to economize on price.What variance will most likely result?

Accepted Answer

A) Favorable materials quantity variance 
B) Favorable total materials variance 
C) Unfavorable materials price variance 
D) Unfavorable labor quantity variance 
A) Favorable materials quantity variance 
B) Favorable total materials variance 
C) Unfavorable materials price variance 
D) Unfavorable labor quantity variance

Question 8

The total overhead variance is the difference between actual overhead costs and overhead costs applied to work done.

Accepted Answer

A) True 
 B)False

Question 9

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 10

Which of the following statements is true?

Accepted Answer

A) Variances are the differences between total actual costs and total standard costs. 
B) When actual costs exceed standard costs, the variance is favorable. 
C) An unfavorable variance results when actual costs are decreasing but standards are not changed. 
D) All of the above are true. 
A) Variances are the differences between total actual costs and total standard costs. 
B) When actual costs exceed standard costs, the variance is favorable. 
C) An unfavorable variance results when actual costs are decreasing but standards are not changed. 
D) All of the above are true.

Question 11

Clark Company manufactures a product with a standard direct labor cost of two hours at $18.00 per hour.During July, 2,000 units were produced using 4,200 hours at $18.30 per hour.
-The labor price variance was

Accepted Answer

A) $1,260 U. 
B) $4,860 U. 
C) $4,860 F. 
D) $3,600 U. 
A) $1,260 U. 
B) $4,860 U. 
C) $4,860 F. 
D) $3,600 U.

Question 12

Standard costs

Accepted Answer

A) may show past cost experience. 
B) help establish expected future costs. 
C) are the budgeted cost per unit in the present. 
D) all of these. 
A) may show past cost experience. 
B) help establish expected future costs. 
C) are the budgeted cost per unit in the present. 
D) all of these.

Question 13

All Urban Company produces a product requiring 4 pounds of material costing $3.50 per pound.During December, All Urban purchased 4,200 pounds of material for $14,112 and used the material to produce 500 products.What was the materials price variance for December?

Accepted Answer

A) $560 F 
B) $588 F 
C) $112 U 
D) $672 U 
A) $560 F 
B) $588 F 
C) $112 U 
D) $672 U

Question 14

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 15

The use of an inexperienced worker instead of an experienced employee can result in a favorable labor price variance but probably an unfavorable quantity variance.

Accepted Answer

A) True 
 B)False

Question 16

Standard costs may be used by

Accepted Answer

A) universities. 
B) governmental agencies. 
C) charitable organizations. 
D) all of these. 
A) universities. 
B) governmental agencies. 
C) charitable organizations. 
D) all of these.

Question 17

Allowances should not be made in the direct labor quantity standard for

Accepted Answer

A) wasted time. 
B) rest periods. 
C) cleanup. 
D) machine downtime. 
A) wasted time. 
B) rest periods. 
C) cleanup. 
D) machine downtime.

Question 18

Budget data are not journalized in cost accounting systems with the exception of

Accepted Answer

A) the application of manufacturing overhead. 
B) direct labor budgets. 
C) direct materials budgets. 
D) cash budget data. 
A) the application of manufacturing overhead. 
B) direct labor budgets. 
C) direct materials budgets. 
D) cash budget data.

Question 19

Manufacturing overhead costs are applied to work in process on the basis of

Accepted Answer

A) actual hours worked. 
B) standard hours allowed. 
C) ratio of actual variable to fixed costs. 
D) actual overhead costs incurred. 
A) actual hours worked. 
B) standard hours allowed. 
C) ratio of actual variable to fixed costs. 
D) actual overhead costs incurred.

Question 20

The standard rate of pay is $12 per direct labor hour.If the actual direct labor payroll was $47,040 for 4,000 direct labor hours worked, the direct labor price (rate) variance is

Accepted Answer

A) $960 unfavorable. 
B) $960 favorable. 
C) $1,200 unfavorable. 
D) $1,200 favorable. 
A) $960 unfavorable. 
B) $960 favorable. 
C) $1,200 unfavorable. 
D) $1,200 favorable.

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

Standard costs may be incorporated into the accounts in the general ledger.

A standard cost system may be used with a job order cost system but not with a process cost system.

The standard predetermined overhead rate must be based on direct labor hours as the standard activity index.

When is a variance considered to be 'material'?

Labor efficiency is measured by the

The purchasing agent of the Poplin, Inc.ordered materials of lower quality in an effort to economize on price.What variance will most likely result?

The total overhead variance is the difference between actual overhead costs and overhead costs applied to work done.

The investigation of a materials quantity variance usually begins in the

Which of the following statements is true?

Clark Company manufactures a product with a standard direct labor cost of two hours at $18.00 per hour.During July, 2,000 units were produced using 4,200 hours at $18.30 per hour. -The labor price variance was

Standard costs

All Urban Company produces a product requiring 4 pounds of material costing $3.50 per pound.During December, All Urban purchased 4,200 pounds of material for $14,112 and used the material to produce 500 products.What was the materials price variance for December?

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.

The use of an inexperienced worker instead of an experienced employee can result in a favorable labor price variance but probably an unfavorable quantity variance.

Standard costs may be used by

Allowances should not be made in the direct labor quantity standard for

Budget data are not journalized in cost accounting systems with the exception of

Manufacturing overhead costs are applied to work in process on the basis of

The standard rate of pay is $12 per direct labor hour.If the actual direct labor payroll was $47,040 for 4,000 direct labor hours worked, the direct labor price (rate) 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

Filters

Exam 11: Reporting and Analyzing Stockholders Equity

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

Standard costs may be incorporated into the accounts in the general ledger.

A standard cost system may be used with a job order cost system but not with a process cost system.

The standard predetermined overhead rate must be based on direct labor hours as the standard activity index.

When is a variance considered to be 'material'?

Labor efficiency is measured by the

The purchasing agent of the Poplin, Inc.ordered materials of lower quality in an effort to economize on price.What variance will most likely result?

The total overhead variance is the difference between actual overhead costs and overhead costs applied to work done.

The investigation of a materials quantity variance usually begins in the

Which of the following statements is true?

Clark Company manufactures a product with a standard direct labor cost of two hours at $18.00 per hour.During July, 2,000 units were produced using 4,200 hours at $18.30 per hour. -The labor price variance was

Standard costs

All Urban Company produces a product requiring 4 pounds of material costing $3.50 per pound.During December, All Urban purchased 4,200 pounds of material for $14,112 and used the material to produce 500 products.What was the materials price variance for December?

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.

The use of an inexperienced worker instead of an experienced employee can result in a favorable labor price variance but probably an unfavorable quantity variance.

Standard costs may be used by

Allowances should not be made in the direct labor quantity standard for

Budget data are not journalized in cost accounting systems with the exception of

Manufacturing overhead costs are applied to work in process on the basis of

The standard rate of pay is $12 per direct labor hour.If the actual direct labor payroll was $47,040 for 4,000 direct labor hours worked, the direct labor price (rate) 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

Filters