Question 1

In using variance reports, management looks for

Accepted Answer

A)  total assets invested. 
B)  significant variances. 
C)  competitors' costs in comparison to the company's costs. 
D)  more efficient ways of valuing inventories. 
A)  total assets invested. 
B)  significant variances. 
C)  competitors' costs in comparison to the company's costs. 
D)  more efficient ways of valuing inventories.

Question 2

In Zero Company's income statement, they report actual gross profit of $52,500 and the following variances:   Zero would report gross profit at standard of

Accepted Answer

A)  $46,660. 
B)  $47,500. 
C)  $50,000. 
D)  $53,340. 
A)  $46,660. 
B)  $47,500. 
C)  $50,000. 
D)  $53,340.

Question 3

What are the four perspectives used in the balanced scorecard? Discuss the nature of each, and how the perspectives are linked.

Accepted Answer

The four perspectives of the balanced sc

Question 4

Monte Industries has a standard costing system. The following data are available for July:
a. Actual manufacturing overhead cost incurred: $22,000
b. Actual machine hours worked: 1,600
c. Overhead volume variance: $3,600 Unfavorable
d. Total overhead variance: $2,000 Unfavorable
e. Overhead is assigned to production on the basis of machine hours
Instructions
Determine the amount of (1) the controllable overhead variance and (2) the overhead applied.

Accepted Answer

(1) Volume variance plus contr

Question 5

The direct labor quantity standard is sometimes called the direct labor

Accepted Answer

A)  volume standard. 
B)  effectiveness standard. 
C)  efficiency standard. 
D)  quality standard. 
A)  volume standard. 
B)  effectiveness standard. 
C)  efficiency standard. 
D)  quality standard.

Question 6

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 7

The formula for the materials quantity variance is

Accepted Answer

A)  (SQ × AP) - (SQ × SP). 
B)  (AQ × AP) - (AQ × SP). 
C)  (AQ × SP) - (SQ × SP). 
D)  (AQ × AP) - (SQ × SP). 
A)  (SQ × AP) - (SQ × SP). 
B)  (AQ × AP) - (AQ × SP). 
C)  (AQ × SP) - (SQ × SP). 
D)  (AQ × AP) - (SQ × SP).

Question 8

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 9

The most rigorous of all standards is the

Accepted Answer

A)  normal standard. 
B)  realistic standard. 
C)  ideal standard. 
D)  conceivable standard. 
A)  normal standard. 
B)  realistic standard. 
C)  ideal standard. 
D)  conceivable standard.

Question 10

In concept, standards and budgets are essentially the same.

Accepted Answer

A) True 
 B)False

Question 11

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 12

The total materials variance is equal to the

Accepted Answer

A)  materials price variance. 
B)  difference between the materials price variance and materials quantity variance. 
C)  product of the materials price variance and the materials quantity variance. 
D)  sum of the materials price variance and the materials quantity variance. 
A)  materials price variance. 
B)  difference between the materials price variance and materials quantity variance. 
C)  product of the materials price variance and the materials quantity variance. 
D)  sum of the materials price variance and the materials quantity variance.

Question 13

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 14

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

Accepted Answer

A) True 
 B)False

Question 15

Actual costs that vary from standard costs always indicate inefficiencies.

Accepted Answer

A) True 
 B)False

Question 16

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.

Question 17

Variance analysis facilitates the principle of "management by exception."

Accepted Answer

A) True 
 B)False

Question 18

During March, Patt, Inc. purchases and uses 8,800 pounds of materials costing $35,640 to make 4,000 tiles. Patt's standard material cost per tile is $8 (2 pounds of material × $4.00).
Instructions
Compute the total, price, and quantity material variances for Patt, Inc. for March.

Accepted Answer

Total materials variance = $3,640 U, (8,

Question 19

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 20

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

Accepted Answer

A) True 
 B)False

Exam 24: Standard Costs and Balanced Scorecard

In using variance reports, management looks for

In Zero Company's income statement, they report actual gross profit of $52,500 and the following variances: Zero would report gross profit at standard of

What are the four perspectives used in the balanced scorecard? Discuss the nature of each, and how the perspectives are linked.

The direct labor quantity standard is sometimes called the direct labor

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

The formula for the materials quantity variance is

The customer perspective of the balanced scorecard approach

The most rigorous of all standards is the

In concept, standards and budgets are essentially the same.

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

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

Actual costs that vary from standard costs always indicate inefficiencies.

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

Variance analysis facilitates the principle of "management by exception."

During March, Patt, Inc. purchases and uses 8,800 pounds of materials costing $35,640 to make 4,000 tiles. Patt's standard material cost per tile is $8 (2 pounds of material × $4.00). Instructions Compute the total, price, and quantity material variances for Patt, Inc. for March.

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

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

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations Perpetual Approach

Inventories Periodic Approach

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions, and Stockholders Equity

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Planning for Capital Investments

Time Value of Money

Investments

Payroll Accounting

Subsidiary Ledgers and Special Journals

Other Significant Liabilities

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