Question 1

A direct-material quantity variance can be caused by all of the following except:

Accepted Answer

A) improper employee training. 
B) acquisition of materials that are below standard quality. 
C) adjustment problems with machines. 
D) disgruntled workers. 
E) All of these could result in a direct-materials quantity variance. 
A) improper employee training. 
B) acquisition of materials that are below standard quality. 
C) adjustment problems with machines. 
D) disgruntled workers. 
E) All of these could result in a direct-materials quantity variance.

Question 2

A favorable labor eﬃciency variance is created when:

Accepted Answer

A) actual labor hours worked exceed standard hours allowed. 
B) actual hours worked are less than standard hours allowed. 
C) actual wages paid are less than amounts that should have been paid. 
D) actual units produced exceed budgeted production levels. 
E) actual units produced exceed standard hours allowed. 
A) actual labor hours worked exceed standard hours allowed. 
B) actual hours worked are less than standard hours allowed. 
C) actual wages paid are less than amounts that should have been paid. 
D) actual units produced exceed budgeted production levels. 
E) actual units produced exceed standard hours allowed.

Question 3

The term "management by exception" is best deﬁned as:

Accepted Answer

A) choosing exceptional managers. 
B) controlling actions of subordinates through acceptance of management techniques. 
C) investigating unfavorable variances. 
D) devoting management time to investigate signiﬁcant variances. 
E) controlling costs so that non-zero variances are treated as "exceptional." 
A) choosing exceptional managers. 
B) controlling actions of subordinates through acceptance of management techniques. 
C) investigating unfavorable variances. 
D) devoting management time to investigate signiﬁcant variances. 
E) controlling costs so that non-zero variances are treated as "exceptional."

Question 4

Too-Jay Enterprises recently experienced a ﬁre, forcing the company to use incomplete information to analyze operations.Consider the following data and assume that all materials purchased during the period were used in production: Direct materials: Standard price per pound: $9 Actual price per pound: $8 Price variance: $20,000F Total of direct-material variances: $2,000F Direct labor: Actual hours worked: 40,000 Actual rate per hour: $15 Eﬃciency variance: $28,000F Total of direct-labor variances: $12,000U Halo completed 12,000 units. Required: Determine the following: (1) actual materials used, (2) direct-material quantity variance, (3) direct-labor rate variance, (4) standard labor rate per hour, and (5) standard labor time per ﬁnished unit.

Accepted Answer

1.Actual materials used: 20,000 pounds
2

Question 5

Vito, Inc.had an unfavorable labor eﬃciency variance and an unfavorable materials quantity variance.Which department might be held accountable for these variances?

Accepted Answer

A) Engineering 
B) Production only, because ineﬃcient workers may use more materials than allowed. 
C) Marketing. 
D) Shipping. 
E) Both Purchasing, because bad materials can harm labor eﬃciency and Production, because ineﬃcient workers may use more materials than 
A) Engineering 
B) Production only, because ineﬃcient workers may use more materials than allowed. 
C) Marketing. 
D) Shipping. 
E) Both Purchasing, because bad materials can harm labor eﬃciency and Production, because ineﬃcient workers may use more materials than

Question 6

Variances are computed by taking the difference between which of the following?

Accepted Answer

A) Product cost and period cost. 
B) Actual cost and differential cost. 
C) Price factors and rate factors. 
D) Actual cost and standard cost. 
E) Product cost and standard cost. 
A) Product cost and period cost. 
B) Actual cost and differential cost. 
C) Price factors and rate factors. 
D) Actual cost and standard cost. 
E) Product cost and standard cost.

Question 7

When the quantity of materials purchased is not equal to the quantity of material used, most companies base the calculation of the material quantity variance on the:

Accepted Answer

A) quantity of direct materials purchased. 
B) quantity of direct materials spoiled. 
C) quantity of direct materials that should have been used in achieving actual production. 
D) quantity of direct materials actually used. 
E) none of the other answers are correct. 
A) quantity of direct materials purchased. 
B) quantity of direct materials spoiled. 
C) quantity of direct materials that should have been used in achieving actual production. 
D) quantity of direct materials actually used. 
E) none of the other answers are correct.

Question 8

Consider the following statements: I.Behavioral scientists ﬁnd that perfection standards often discourage employees and result in low worker morale. II.Practical standards are also known as attainable standards. III.Practical standards incorporate a certain amount of ineﬃciency such as that caused by an occasional machine breakdown. Which of the above statements is (are) true?

Accepted Answer

A) I only. 
B) II only. 
C) III only. 
D) II and III. 
E) I, II, and III. 
A) I only. 
B) II only. 
C) III only. 
D) II and III. 
E) I, II, and III.

Question 9

The absolute size of a variance is more important than the relative size when trying to decide what variances to investigate.

Accepted Answer

A) True 
 B)False

Question 10

Rickett Corporation had a favorable direct-labor eﬃciency variance of $6,000 for the period just ended.The actual wage rate was $0.50 more than the standard rate of $12.00.If the company's standard hours allowed for actual production totaled 9,500, how many hours did the ﬁrm actually work?

Accepted Answer

A) 9,000. 
B) 9,020. 
C) 9,980. 
D) 10,000. 
E) None of the answers is correct. 
A) 9,000. 
B) 9,020. 
C) 9,980. 
D) 10,000. 
E) None of the answers is correct.

Question 11

Which of the following choices correctly indicates the use of the standard price per unit of direct material when calculating the materials price variance and the material quantity variance?

Accepted Answer

A) Choice A 
B) Choice B 
C) Choice C 
D) Choice D 
E) Choice E 
A) Choice A 
B) Choice B 
C) Choice C 
D) Choice D 
E) Choice E

Question 12

Which department would normally begin an investigation regarding an unfavorable materials quantity variance?

Accepted Answer

A) Quality control. 
B) Purchasing. 
C) Engineering. 
D) Production. 
E) Receiving. 
A) Quality control. 
B) Purchasing. 
C) Engineering. 
D) Production. 
E) Receiving.

Question 13

Most companies base the calculation of the material price variance on the:

Accepted Answer

A) quantity of direct materials purchased. 
B) quantity of direct materials spoiled. 
C) quantity of direct materials that should have been used in achieving actual production. 
D) quantity of direct materials actually used. 
E) quantity of direct materials to be purchased during the next accounting period. 
A) quantity of direct materials purchased. 
B) quantity of direct materials spoiled. 
C) quantity of direct materials that should have been used in achieving actual production. 
D) quantity of direct materials actually used. 
E) quantity of direct materials to be purchased during the next accounting period.

Question 14

Enrique Industries purchased and consumed 50,000 gallons of direct material that was used in the production of 11,000 ﬁnished units of product.According to engineering speciﬁcations, each ﬁnished unit had a manufacturing standard of ﬁve gallons.If a review of Enrique's accounting records at the end of the period disclosed a material price variance of $5,000U and a material quantity variance of $3,000F, what is the actual price paid for a gallon of direct material?

Accepted Answer

A) $0.50. 
B) $0.60. 
C) $0.70. 
D) None of the answers is correct. 
E) Not enough information to judge. 
A) $0.50. 
B) $0.60. 
C) $0.70. 
D) None of the answers is correct. 
E) Not enough information to judge.

Question 15

Due to evaporation during production, X-treme Building Styrofoam Company requires 5 pounds of material input for every 4 pounds of styrofoam sheets manufactured.During March, the company produced 3,800 pounds of good sheets. Required: Compute the total standard allowed input quantity, given the good output produced.

Accepted Answer

The answer of Due to evaporation during production, X-treme Building...

Question 16

Consider the following statements about variance investigation: BOLDariance investigation involves a look at only unfavorable variances. II.Variance investigation is typically based on a cost-beneﬁt analysis. III.Variance investigation is often performed by establishing guidelines similar to the following: Investigate variances that are greater than $X or greater than Y% of standard cost. Which of the above statements is (are) true?

Accepted Answer

A) I only. 
B) II only. 
C) III only. 
D) II and III. 
E) I, II, and III. 
A) I only. 
B) II only. 
C) III only. 
D) II and III. 
E) I, II, and III.

Question 17

Airon Company recently completed 10,600 units of its single product, consuming 32,000 labor hours that cost the ﬁrm $480,000.According to manufacturing speciﬁcations, each unit should have required 3 hours of labor time at $15.40 per hour. On the basis of this information, determine Airon's total labor variance.

Accepted Answer

A) $15,880 U 
B) $9,720 F 
C) $15,720 F 
D) $9,720 U 
E) $15,880 F 
A) $15,880 U 
B) $9,720 F 
C) $15,720 F 
D) $9,720 U 
E) $15,880 F

Question 18

An unfavorable labor eﬃciency variance is created when:

Accepted Answer

A) actual labor hours worked exceed standard hours allowed. 
B) actual hours worked are less than standard hours allowed. 
C) actual wages paid are less than amounts that should have been paid. 
D) actual units produced exceed budgeted production levels. 
E) actual units produced exceed standard hours allowed. 
A) actual labor hours worked exceed standard hours allowed. 
B) actual hours worked are less than standard hours allowed. 
C) actual wages paid are less than amounts that should have been paid. 
D) actual units produced exceed budgeted production levels. 
E) actual units produced exceed standard hours allowed.

A direct-material quantity variance can be caused by all of the following except:

A favorable labor eﬃciency variance is created when:

The term "management by exception" is best deﬁned as:

Vito, Inc.had an unfavorable labor eﬃciency variance and an unfavorable materials quantity variance.Which department might be held accountable for these variances?

Variances are computed by taking the difference between which of the following?

When the quantity of materials purchased is not equal to the quantity of material used, most companies base the calculation of the material quantity variance on the:

The absolute size of a variance is more important than the relative size when trying to decide what variances to investigate.

Rickett Corporation had a favorable direct-labor eﬃciency variance of $6,000 for the period just ended.The actual wage rate was $0.50 more than the standard rate of $12.00.If the company's standard hours allowed for actual production totaled 9,500, how many hours did the ﬁrm actually work?

Which of the following choices correctly indicates the use of the standard price per unit of direct material when calculating the materials price variance and the material quantity variance?

Which department would normally begin an investigation regarding an unfavorable materials quantity variance?

Most companies base the calculation of the material price variance on the:

An unfavorable labor eﬃciency variance is created when:

The Changing Role of Managerial Accounting in a Dynamic Business Environment

Basic Cost Management Concepts

Product Costing and Cost Accumulation in a Batch Production Environment

Process Costing and Hybrid Product-Costing Systems

Activity-Based Costing and Management

Activity Analysis, Cost Behavior, and Cost Estimation

Cost-Volume-Profit Analysis

Variable Costing and the Costs of Quality and Sustainability

Financial Planning and Analysis: the Master Budget

Flexible Budgeting and Analysis of Overhead Costs

Responsibility Accounting, Operational Performance Measures, and the Balanced Scorecard

Inventory Management and Economic Order Quantity (EOQ) Analysis

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Exam 10: Standard Costing and Analysis of Direct Costs

A direct-material quantity variance can be caused by all of the following except:

A favorable labor eﬃciency variance is created when:

The term "management by exception" is best deﬁned as:

Vito, Inc.had an unfavorable labor eﬃciency variance and an unfavorable materials quantity variance.Which department might be held accountable for these variances?

Variances are computed by taking the difference between which of the following?

When the quantity of materials purchased is not equal to the quantity of material used, most companies base the calculation of the material quantity variance on the:

The absolute size of a variance is more important than the relative size when trying to decide what variances to investigate.

Rickett Corporation had a favorable direct-labor eﬃciency variance of $6,000 for the period just ended.The actual wage rate was $0.50 more than the standard rate of $12.00.If the company's standard hours allowed for actual production totaled 9,500, how many hours did the ﬁrm actually work?

Which of the following choices correctly indicates the use of the standard price per unit of direct material when calculating the materials price variance and the material quantity variance?

Which department would normally begin an investigation regarding an unfavorable materials quantity variance?

Most companies base the calculation of the material price variance on the:

An unfavorable labor eﬃciency variance is created when:

The Changing Role of Managerial Accounting in a Dynamic Business Environment

Basic Cost Management Concepts

Product Costing and Cost Accumulation in a Batch Production Environment

Process Costing and Hybrid Product-Costing Systems

Activity-Based Costing and Management

Activity Analysis, Cost Behavior, and Cost Estimation

Cost-Volume-Profit Analysis

Variable Costing and the Costs of Quality and Sustainability

Financial Planning and Analysis: the Master Budget

Flexible Budgeting and Analysis of Overhead Costs

Responsibility Accounting, Operational Performance Measures, and the Balanced Scorecard

Inventory Management and Economic Order Quantity (EOQ) Analysis

Filters