Question 1

Managers investigate

Accepted Answer

A)  All variances 
B)  All unfavorable variances 
C)  Variances they consider important 
D)  Variances that are reported in the financial statements 
A)  All variances 
B)  All unfavorable variances 
C)  Variances they consider important 
D)  Variances that are reported in the financial statements C

Question 2

Accountants investigate manufacturing overhead spending variances to determine

Accepted Answer

A)  Which specific overhead costs differ from expectations, and whether corrections are needed 
B)  Which specific direct costs differ from expectations, and whether corrections are needed 
C)  Which specific marketing costs differ from expectations, and whether corrections are needed 
D)  Whether the variance is material 
A)  Which specific overhead costs differ from expectations, and whether corrections are needed 
B)  Which specific direct costs differ from expectations, and whether corrections are needed 
C)  Which specific marketing costs differ from expectations, and whether corrections are needed 
D)  Whether the variance is material A

Question 3

Use the following information for the next 7 questions.
A small accounting firm budgets 200 hours of billings for the next month, and 60% of these hours are expected to be for tax return preparation services, with the remaining 40% for bookkeeping services. Tax work is billed at $50 per hour, and bookkeeping work is billed at $40 per hour. The variable costs for both types of services are $10 per hour. During the month 180 hours were billed, 90 of which were for tax work.
-(Appendix 11A) The revenue sales quantity variance was

Accepted Answer

A)  $720 unfavorable 
B)  $540 favorable 
C)  $900 unfavorable 
D)  $180 unfavorable 
A)  $720 unfavorable 
B)  $540 favorable 
C)  $900 unfavorable 
D)  $180 unfavorable C

Question 4

If a variance is investigated and determined to be random, managers should

Accepted Answer

A)  Write off the variance against cost of goods sold 
B)  Do nothing 
C)  Identify and discipline the employee(s) responsible 
D)  Write off the variance against work in process 
A)  Write off the variance against cost of goods sold 
B)  Do nothing 
C)  Identify and discipline the employee(s) responsible 
D)  Write off the variance against work in process

Question 5

The production manager of CLR Corporation calculated a material and unfavorable variance of $4,000 with respect to the cost of direct materials. Which of the following is a likely next step for the production manager?

Accepted Answer

A)  Identify and discipline the responsible employee 
B)  Take actions to prevent the variance from recurring 
C)  Ascertain the cause of the variance 
D)  Switch suppliers for direct materials 
A)  Identify and discipline the responsible employee 
B)  Take actions to prevent the variance from recurring 
C)  Ascertain the cause of the variance 
D)  Switch suppliers for direct materials

Question 6

Use the following information for the next 3 questions.
Dem Mfg. has gathered the following data in preparing to record their direct labor payroll costs for the week:  
-The actual direct labor costs were

Accepted Answer

A)  $144,300 
B)  $148,000 
C)  $160,000 
D)  $151,700 
A)  $144,300 
B)  $148,000 
C)  $160,000 
D)  $151,700

Question 7

Use the following information for the next 5 questions.
Mason, Inc. uses a standard costing system. Overhead costs are allocated based on direct labor hours. The standard variable overhead and fixed overhead rates are $1 and $5 per direct labor hour, respectively. Data relevant for the current period include:  
-The purchase of direct materials would be recorded in direct materials inventory at

Accepted Answer

A)  $540,000 
B)  $585,000 
C)  $600,000 
D)  $650,000 
A)  $540,000 
B)  $585,000 
C)  $600,000 
D)  $650,000

Question 8

Use the following information for the next 6 questions.
Hyteck, Inc. is a capital intensive firm. Indirect costs make up nearly 70% of the product costs. The company has no direct material costs because customers provide the direct materials used for each job. To plan and control such costs, the firm employs flexible budgets and standard costs. Overhead rates, based on direct labor hours, are derived from the master budget.  
-The direct labor efficiency variance was

Accepted Answer

A)  $2,000 F 
B)  $2,800 U 
C)  $1,000 U 
D)  $1,000 F 
A)  $2,000 F 
B)  $2,800 U 
C)  $1,000 U 
D)  $1,000 F

Question 9

Use the following information for the next 4 questions.
Hogle Mfg. Co. uses a standard costing system. The standard time to produce one unit is 4 hours, and normal production is 3,000 units monthly. Overhead costs were estimated to be $135,000. The standard variable overhead rate is $5 per machine hour. During April the following results were recorded:  
-The total overhead allocated was

Accepted Answer

A)  $135,000 
B)  $139,500 
C)  $141,500 
D)  $137,000 
A)  $135,000 
B)  $139,500 
C)  $141,500 
D)  $137,000

Question 10

Use the following information for the next 4 questions.
White, Inc. produces a chemical product whose primary component is purchased on credit and any discounts are always taken. The following material and labor elements make up the costs of the product:   Each container of the chemical product contains 5.7 quarts of material. During the process 5% of the material is lost due to waste. Each container of product also requires 1.2 hours of labor. Each day 2 hours are taken for set-up, cleaning, and breaks. Also, the wage rate is $15 per hour and fringes/payroll taxes are 20% of wages. Clients can take a 3% discount if they pay invoices within 10 days; otherwise, the entire invoice amount is due within 30 days. 1 gallon equals 4 quarts.
-The expected costs per unit of input are called

Accepted Answer

A)  Standard costs 
B)  Standard prices 
C)  Standard quantities 
D)  Standard cost allowed 
A)  Standard costs 
B)  Standard prices 
C)  Standard quantities 
D)  Standard cost allowed

Question 11

Theft of raw materials is most likely to lead to

Accepted Answer

A)  Direct materials price variance 
B)  Favorable direct materials price variance 
C)  Unfavorable direct materials efficiency variance 
D)  Favorable direct materials efficiency variance 
A)  Direct materials price variance 
B)  Favorable direct materials price variance 
C)  Unfavorable direct materials efficiency variance 
D)  Favorable direct materials efficiency variance

Question 12

Calculating variances is a necessary, but not sufficient, step for completing a variance analysis.

Accepted Answer

A) True 
 B)False

Question 13

Use the following information for the next 7 questions.
Paris Perfumery sells two perfumes, L'Amor and Plaisir. The expected sales mix is one bottle of L'Amour to five bottles of Plaisir. Planned sales and variable costs for last period were as follows:  
-(Appendix 11A) The revenue sales quantity variance for L'Amour was

Accepted Answer

A)  $150,000 U 
B)  $150,000 F 
C)  $262,500 U 
D)  $112,000 U 
A)  $150,000 U 
B)  $150,000 F 
C)  $262,500 U 
D)  $112,000 U

Question 14

Use the following information for the next 7 questions.
Paris Perfumery sells two perfumes, L'Amor and Plaisir. The expected sales mix is one bottle of L'Amour to five bottles of Plaisir. Planned sales and variable costs for last period were as follows:  
-(Appendix 11A) The sales price variance for L'Amour was

Accepted Answer

A)  $172,500 F 
B)  $172,500 U 
C)  $0 
D)  $112,500 U 
A)  $172,500 F 
B)  $172,500 U 
C)  $0 
D)  $112,500 U

Question 15

Use the following information for the next 5 questions.
During the period Richeleau produced 1,000 units of product. The flexible budget for standard costs is:  
-The total under- or overapplied overhead for the period was

Accepted Answer

A)  $400 overapplied 
B)  $500 underapplied 
C)  $900 overapplied 
D)  $100 underapplied 
A)  $400 overapplied 
B)  $500 underapplied 
C)  $900 overapplied 
D)  $100 underapplied

Question 16

Intentional worker damage is most likely to result in which type of variance?

Accepted Answer

A)  Direct materials price variance 
B)  Direct materials efficiency variance 
C)  Direct labor price variance 
D)  Variable overhead spending variance 
A)  Direct materials price variance 
B)  Direct materials efficiency variance 
C)  Direct labor price variance 
D)  Variable overhead spending variance

Question 17

The total standard cost for a unit of output is the sum of the standard costs for the resources used in production.

Accepted Answer

A) True 
 B)False

Question 18

A favorable variance in one area might be offset by

Accepted Answer

A)  Favorable variance in another area 
B)  Unfavorable variance in another area 
C)  Increase in period costs 
D)  Decrease in period costs 
A)  Favorable variance in another area 
B)  Unfavorable variance in another area 
C)  Increase in period costs 
D)  Decrease in period costs

Question 19

Favorable price variances occur because of

Accepted Answer

A)  Rising prices of finished goods 
B)  Increases in raw materials efficiency 
C)  Price decreases in raw materials 
D)  Efficiency in the production department 
A)  Rising prices of finished goods 
B)  Increases in raw materials efficiency 
C)  Price decreases in raw materials 
D)  Efficiency in the production department

Question 20

Use the following information for the next 4 questions.
White, Inc. produces a chemical product whose primary component is purchased on credit and any discounts are always taken. The following material and labor elements make up the costs of the product:   Each container of the chemical product contains 5.7 quarts of material. During the process 5% of the material is lost due to waste. Each container of product also requires 1.2 hours of labor. Each day 2 hours are taken for set-up, cleaning, and breaks. Also, the wage rate is $15 per hour and fringes/payroll taxes are 20% of wages. Clients can take a 3% discount if they pay invoices within 10 days; otherwise, the entire invoice amount is due within 30 days. 1 gallon equals 4 quarts.
-The standard rate per hour is

Accepted Answer

A)  $18 
B)  $28.80 
C)  $12 
D)  $21.60 
A)  $18 
B)  $28.80 
C)  $12 
D)  $21.60

Managers investigate

Accountants investigate manufacturing overhead spending variances to determine

If a variance is investigated and determined to be random, managers should

The production manager of CLR Corporation calculated a material and unfavorable variance of $4,000 with respect to the cost of direct materials. Which of the following is a likely next step for the production manager?

Use the following information for the next 3 questions. Dem Mfg. has gathered the following data in preparing to record their direct labor payroll costs for the week: -The actual direct labor costs were

Theft of raw materials is most likely to lead to

Calculating variances is a necessary, but not sufficient, step for completing a variance analysis.

Use the following information for the next 5 questions. During the period Richeleau produced 1,000 units of product. The flexible budget for standard costs is: -The total under- or overapplied overhead for the period was

Intentional worker damage is most likely to result in which type of variance?

The total standard cost for a unit of output is the sum of the standard costs for the resources used in production.

A favorable variance in one area might be offset by

Favorable price variances occur because of

The Role of Accounting Information in Management Decision Making

The Cost Function

Cost-Volume-Profit Analysis

Relevant Costs for Nonroutine Operating Decision

Job Costing

Process Costing

Activity-Based Costing and Management

Measuring and Assigning Support Department Costs

Joint Product and By-Product Costing

Static and Flexible Budgets

Strategic Investment Decisions

Joint Management of Revenues and Costs

Measuring and Assigning Costs for Income Statements

Performance Evaluation and Compensation

Strategic Performance Measurement

Sustainability Accounting

Filters

Exam 11: Standard Costs and Variance Analysis

Managers investigate

Accountants investigate manufacturing overhead spending variances to determine

If a variance is investigated and determined to be random, managers should

The production manager of CLR Corporation calculated a material and unfavorable variance of $4,000 with respect to the cost of direct materials. Which of the following is a likely next step for the production manager?

Use the following information for the next 3 questions. Dem Mfg. has gathered the following data in preparing to record their direct labor payroll costs for the week: -The actual direct labor costs were

Theft of raw materials is most likely to lead to

Calculating variances is a necessary, but not sufficient, step for completing a variance analysis.

Use the following information for the next 5 questions. During the period Richeleau produced 1,000 units of product. The flexible budget for standard costs is: -The total under- or overapplied overhead for the period was

Intentional worker damage is most likely to result in which type of variance?

The total standard cost for a unit of output is the sum of the standard costs for the resources used in production.

A favorable variance in one area might be offset by

Favorable price variances occur because of

The Role of Accounting Information in Management Decision Making

The Cost Function

Cost-Volume-Profit Analysis

Relevant Costs for Nonroutine Operating Decision

Job Costing

Process Costing

Activity-Based Costing and Management

Measuring and Assigning Support Department Costs

Joint Product and By-Product Costing

Static and Flexible Budgets

Strategic Investment Decisions

Joint Management of Revenues and Costs

Measuring and Assigning Costs for Income Statements

Performance Evaluation and Compensation

Strategic Performance Measurement

Sustainability Accounting

Filters