Question 1

Normally, standard costs should be revised when labor rates change to incorporate new union contracts.

Accepted Answer

A) True 
 B)False  True

Question 2

The following data are given for Zoyza Company:   Overhead is applied on standard labor hours.​
-The variable factory overhead controllable variance is

Accepted Answer

A) $73,250 favorable 
B) $73,250 unfavorable 
C) $59,400 favorable 
D) $59,400 unfavorable 
A) $73,250 favorable 
B) $73,250 unfavorable 
C) $59,400 favorable 
D) $59,400 unfavorable B

Question 3

St. Augustine Corporation originally budgeted for $360,000 of fixed overhead at 100% of normal production capacity. Production was budgeted to be 12,000 units. The standard hours for production were 5 hours per unit. The variable overhead rate was $3 per hour. Actual fixed overhead was $360,000, and actual variable overhead was $170,000. Actual production was 11,700 units.​
-The fixed factory overhead volume variance is
a.$9,000 favorable
b.$9,000 unfavorable
c.$5,500 favorable
d.$5,500 unfavorable

Accepted Answer

b

Question 4

The following data relate to direct labor costs for the current period: Standard costs
7,500 hours at $11.70
Actual costs
6,000 hours at $12.00
The direct labor time variance is

Accepted Answer

A) $18,000 favorable 
B) $18,000 unfavorable 
C) $17,550 unfavorable 
D) $17,550 favorable 
A) $18,000 favorable 
B) $18,000 unfavorable 
C) $17,550 unfavorable 
D) $17,550 favorable

Question 5

Match each of the following formulas and phrases with the term (a-e) it describes.
-Standard variable overhead for actual units produced

Accepted Answer

A) Direct materials price variance 
B) Direct labor rate variance 
C) Direct labor time variance 
D) Direct materials quantity variance 
E) Budgeted variable factory overhead 
A) Direct materials price variance 
B) Direct labor rate variance 
C) Direct labor time variance 
D) Direct materials quantity variance 
E) Budgeted variable factory overhead

Question 6

Flapjack Corporation had 8,200 actual direct labor hours at an actual rate of $12.40 per hour. Original production had been budgeted for 1,100 units, but only 1,000 units were actually produced. Labor standards were 7.6 hours per completed unit at a standard rate of $13.00 per hour.​
-The direct labor time variance is

Accepted Answer

A) $9,880 favorable 
B) $9,880 unfavorable 
C) $7,800 unfavorable 
D) $7,800 favorable 
A) $9,880 favorable 
B) $9,880 unfavorable 
C) $7,800 unfavorable 
D) $7,800 favorable

Question 7

The following data relate to direct labor costs for February:
Actual costs
7,700 hours at $14.00
Standard costs
7,000 hours at $16.00
-The direct labor time variance is

Accepted Answer

A) $7,700 favorable 
B) $7,700 unfavorable 
C) $11,200 unfavorable 
D) $11,200 favorable 
A) $7,700 favorable 
B) $7,700 unfavorable 
C) $11,200 unfavorable 
D) $11,200 favorable

Question 8

Ideal standards are developed under conditions that assume no idle time, no machine breakdowns, and no materials spoilage.

Accepted Answer

A) True 
 B)False

Question 9

An unfavorable cost variance occurs when the standard cost exceeds the actual cost.

Accepted Answer

A) True 
 B)False

Question 10

Standards can be used in nonmanufacturing settings where the tasks are nonrepetitive in nature.

Accepted Answer

A) True 
 B)False

Question 11

The following data relate to direct labor costs for March:
Rate: standard, $12.00; actual, $12.25
Hours: standard, 18,500; actual, 17,955
Units of production: 9,450
-The total direct labor variance is

Accepted Answer

A) $2,051.25 favorable 
B) $2,051.25 unfavorable 
C) $2,362.50 unfavorable 
D) $2,362.50 favorable 
A) $2,051.25 favorable 
B) $2,051.25 unfavorable 
C) $2,362.50 unfavorable 
D) $2,362.50 favorable

Question 12

Match each of the following phrases with the term (a-e) it describes.
-Actual cost > standard cost at actual volumes

Accepted Answer

A) Ideal standard 
B) Normal standard 
C) Budget performance report 
D) Unfavorable cost variance 
E) Favorable cost variance 
A) Ideal standard 
B) Normal standard 
C) Budget performance report 
D) Unfavorable cost variance 
E) Favorable cost variance

Question 13

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows:
Standard Costs
Fixed overhead (based on 10,000 hours)3 hours per unit at $0.80 per hour
Variable overhead
3 hours per unit at $2.00 per hour
Actual Costs
Total variable cost, $18,000
Total fixed cost, $8,000
-The total factory overhead cost variance is

Accepted Answer

A) $2,000 favorable 
B) $5,000 unfavorable 
C) $2,500 unfavorable 
D) $5,000 favorable 
A) $2,000 favorable 
B) $5,000 unfavorable 
C) $2,500 unfavorable 
D) $5,000 favorable

Question 14

In most businesses, cost standards are established principally by accountants.

Accepted Answer

A) True 
 B)False

Question 15

Tippi Company produces lamps that require 2.25 standard hours per unit at a standard hourly rate of $15.00 per hour. Production of 7,700 units required 17,550 hours at an hourly rate of $15.20 per hour.​
What is the direct labor (a) rate variance, (b) time variance, and (c) total cost variance?

Accepted Answer

The answer of Tippi Company produces lamps that require 2.25...

Question 16

Financial reporting systems that are guided by the principle of exceptions focus attention on variances from standard costs.

Accepted Answer

A) True 
 B)False

Question 17

The total manufacturing cost variance consists of

Accepted Answer

A) direct materials price variance, direct labor cost variance, and fixed factory overhead volume variance 
B) direct materials cost variance, direct labor rate variance, and factory overhead cost variance 
C) direct materials cost variance, direct labor cost variance, and variable factory overhead controllable variance 
D) direct materials cost variance, direct labor cost variance, and factory overhead cost variance 
A) direct materials price variance, direct labor cost variance, and fixed factory overhead volume variance 
B) direct materials cost variance, direct labor rate variance, and factory overhead cost variance 
C) direct materials cost variance, direct labor cost variance, and variable factory overhead controllable variance 
D) direct materials cost variance, direct labor cost variance, and factory overhead cost variance

Question 18

The following data relate to direct labor costs for March:
Rate: standard, $12.00; actual, $12.25
Hours: standard, 18,500; actual, 17,955
Units of production: 9,450
-Which of the following is not a reason for a direct materials quantity variance?

Accepted Answer

A) malfunctioning equipment 
B) purchasing of inferior raw materials 
C) increased material cost per unit 
D) spoilage of materials 
A) malfunctioning equipment 
B) purchasing of inferior raw materials 
C) increased material cost per unit 
D) spoilage of materials

Question 19

Standard costs serve as a device for measuring efficiency.

Accepted Answer

A) True 
 B)False

Question 20

A budget performance report compares actual costs with the standard costs and reports differences for possible investigation.

Accepted Answer

A) True 
 B)False

Exam 23: Evaluating Variances From Standard Costs

Normally, standard costs should be revised when labor rates change to incorporate new union contracts.

The following data are given for Zoyza Company: Overhead is applied on standard labor hours.​ -The variable factory overhead controllable variance is

The following data relate to direct labor costs for the current period: Standard costs 7,500 hours at $11.70 Actual costs 6,000 hours at $12.00 The direct labor time variance is

Match each of the following formulas and phrases with the term (a-e) it describes. -Standard variable overhead for actual units produced

The following data relate to direct labor costs for February: Actual costs 7,700 hours at $14.00 Standard costs 7,000 hours at $16.00 -The direct labor time variance is

Ideal standards are developed under conditions that assume no idle time, no machine breakdowns, and no materials spoilage.

An unfavorable cost variance occurs when the standard cost exceeds the actual cost.

Standards can be used in nonmanufacturing settings where the tasks are nonrepetitive in nature.

The following data relate to direct labor costs for March: Rate: standard, $12.00; actual, $12.25 Hours: standard, 18,500; actual, 17,955 Units of production: 9,450 -The total direct labor variance is

Match each of the following phrases with the term (a-e) it describes. -Actual cost > standard cost at actual volumes

In most businesses, cost standards are established principally by accountants.

Tippi Company produces lamps that require 2.25 standard hours per unit at a standard hourly rate of $15.00 per hour. Production of 7,700 units required 17,550 hours at an hourly rate of $15.20 per hour.​ What is the direct labor (a) rate variance, (b) time variance, and (c) total cost variance?

Financial reporting systems that are guided by the principle of exceptions focus attention on variances from standard costs.

The total manufacturing cost variance consists of

The following data relate to direct labor costs for March: Rate: standard, $12.00; actual, $12.25 Hours: standard, 18,500; actual, 17,955 Units of production: 9,450 -Which of the following is not a reason for a direct materials quantity variance?

Standard costs serve as a device for measuring efficiency.

A budget performance report compares actual costs with the standard costs and reports differences for possible investigation.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

The Accounting Cycle

Accounting for Retail Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Support Department and Joint Cost Allocation

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

The Balanced Scorecard and Corporate Social Responsibility

Investments

Filters

The following data are given for Zoyza Company: Overhead is applied on standard labor hours. -The variable factory overhead controllable variance is

Tippi Company produces lamps that require 2.25 standard hours per unit at a standard hourly rate of $15.00 per hour. Production of 7,700 units required 17,550 hours at an hourly rate of $15.20 per hour. What is the direct labor (a) rate variance, (b) time variance, and (c) total cost variance?