Question 1

The usage variance is the difference between the actual and standard quantity of inputs

Accepted Answer

A)  multiplied by the standard unit price of the input. 
B)  budgeted multiplied by the standard unit price of the input. 
C)  multiplied by the actual unit price of the input. 
D)  purchased multiplied by the actual unit price of the input. 
E)  None of these. 
A)  multiplied by the standard unit price of the input. 
B)  budgeted multiplied by the standard unit price of the input. 
C)  multiplied by the actual unit price of the input. 
D)  purchased multiplied by the actual unit price of the input. 
E)  None of these. A

Question 2

In setting price standards for materials and labor,

Accepted Answer

A)  the purchasing department must consider discounts, freight, and quality. 
B)  personnel must consider payroll taxes, fringe benefits, and qualifications. 
C)  it is the joint responsibility of operations, purchasing, personnel, and accounting. 
D)  All of these. 
E)  None of these. 
A)  the purchasing department must consider discounts, freight, and quality. 
B)  personnel must consider payroll taxes, fringe benefits, and qualifications. 
C)  it is the joint responsibility of operations, purchasing, personnel, and accounting. 
D)  All of these. 
E)  None of these. D

Question 3

Figure 10-3.
Bortello Corporation produces high-quality leather boots. The company has a standard cost system and has set the following standards for materials and labor:
   During the year Bortello produced 125 boots. Actual leather purchased was 1,700 strips, at $16 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 1,500 hours at $15 per hour.
-Refer to Figure 10-3. Compute the materials price variance and the materials usage variance, respectively.

Accepted Answer

A)  $9,000 F and $1,200 U 
B)  $9,300 U and $1,500 F 
C)  $6,800 F and $4,000 U 
D)  $6,800 U and $4,000 F 
A)  $9,000 F and $1,200 U 
B)  $9,300 U and $1,500 F 
C)  $6,800 F and $4,000 U 
D)  $6,800 U and $4,000 F C

Question 4

Figure 10-3.
Bortello Corporation produces high-quality leather boots. The company has a standard cost system and has set the following standards for materials and labor:
   During the year Bortello produced 125 boots. Actual leather purchased was 1,700 strips, at $16 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 1,500 hours at $15 per hour.
-Refer to Figure 10-3. Compute the costs of leather and direct labor that should have been incurred for the production of 125 boots.

Accepted Answer

A)  $36,000 and $36,000 
B)  $46,500 and $37,500 
C)  $37,200 and $20,000 
D)  $30,000 and $15,000 
A)  $36,000 and $36,000 
B)  $46,500 and $37,500 
C)  $37,200 and $20,000 
D)  $30,000 and $15,000

Question 5

The ____________________ is the difference between the actual cost of the input and its planned cost.

Accepted Answer

total budg

Question 6

Match the variance with its correct calculation.
a.
Actual Quantity *Actual Price
b.
(Actual Hours*Actual Rate) - (Standard Hours *Standard Rate)
c.
(Actual Quantity *Actual Price) - (Standard Quantity * Standard Price)
d.
(Actual Hours - Standard Hours) * Standard Rate
e.
(Actual Price -Standard Price) *Actual Quantity
f.
Standard Quantity * Standard Price
g.
(Actual Rate - Standard Rate) * Actual Hours
h.
(Actual Quantity - Standard Quantity) *Standard Price
-Materials Usage Variance

Accepted Answer

The answer of Match the variance with its correct calculation.
a.
Actual...

Question 7

The standard quantity of materials allowed is computed by the equation

Accepted Answer

A)  unit quantity standard * standard output. 
B)  unit quantity standard* actual input. 
C)  unit quantity standard * standard input. 
D)  unit quantity standard * actual output. 
E)  not shown here. 
A)  unit quantity standard * standard output. 
B)  unit quantity standard* actual input. 
C)  unit quantity standard * standard input. 
D)  unit quantity standard * actual output. 
E)  not shown here.

Question 8

Mersey Company produced 1,000 trash cans during March using 450 direct labor hours and purchased and used 3,100 pounds of rubber. Its materials and labor standards are:
   Its materials price variance was a favorable $620 and its labor rate variance was an unfavorable $900.

Accepted Answer

The answer of Mersey Company produced 1,000 trash cans during...

Question 9

Figure 10-3.
Bortello Corporation produces high-quality leather boots. The company has a standard cost system and has set the following standards for materials and labor:
   During the year Bortello produced 125 boots. Actual leather purchased was 1,700 strips, at $16 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 1,500 hours at $15 per hour.
-Refer to Figure 10-3. Calculate the labor rate variance and the labor efficiency variance, respectively.

Accepted Answer

A)  $4,500 U and $3,000 U 
B)  $4,500 F and $3,000 F 
C)  $4,500 U and $3,000 F 
D)  $4,500 F and $3,000 U 
A)  $4,500 U and $3,000 U 
B)  $4,500 F and $3,000 F 
C)  $4,500 U and $3,000 F 
D)  $4,500 F and $3,000 U

Question 10

Standards are set by using historical experiences, ___________________, and input from operating personnel, marketing, and accounting.

Accepted Answer

The answer of Standards are set by using historical experiences,...

Question 11

Figure 10-9.
James Company manufactures t-shirts. During the year, it manufactured 250,000 t-shirts, using 2 hours of direct labor at a rate of $8.50 per hour. The materials and labor standards for manufacturing the t-shirts are:
   It took James 1,400,000 yards at $2.50 per yard to make the 250,000 t-shirts.
-Refer to Figure 10-9. What is the entry to record the purchase of materials?

Accepted Answer

A)  Materials 3,500,000
Materials Price Variance 750,000
Accounts Payable 4,250,000 
B)  Materials 4,200,000
Materials Price Variance 750,000
Accounts Payable 4,950,000 
C)  Materials 4,200,000
Materials Price Variance 700,000
Accounts Payable 3,500,000 
D)  Materials 3,500,000
Materials Price Variance 700,000
Accounts Payable 4,200,000 
A)  Materials 3,500,000
Materials Price Variance 750,000
Accounts Payable 4,250,000 
B)  Materials 4,200,000
Materials Price Variance 750,000
Accounts Payable 4,950,000 
C)  Materials 4,200,000
Materials Price Variance 700,000
Accounts Payable 3,500,000 
D)  Materials 3,500,000
Materials Price Variance 700,000
Accounts Payable 4,200,000

Question 12

Perfect Builders makes all sorts of moldings. Its standard quantity of material allowed is 1 foot of wood per 1 foot of molding at a standard price of $2.00 per foot. During August, it purchased 500,000 feet of wood at a cost of $1.90 per foot, which produced only 499,000 feet of molding. Calculate the materials price variance and the materials usage variance, respectively.

Accepted Answer

A)  $50,000 F and $2,000 U 
B)  $49,900 U and $2,000 F 
C)  $50,000 F and $1,900 U 
D)  $49,900 F and $1,900 U 
A)  $50,000 F and $2,000 U 
B)  $49,900 U and $2,000 F 
C)  $50,000 F and $1,900 U 
D)  $49,900 F and $1,900 U

Question 13

In a ____________________, costs are assigned to products using quantity and price standards for all three manufacturing costs: direct materials, direct labor, and overhead.

Accepted Answer

standard c

Question 14

During September, 40,000 units were produced. The standard quantity of material allowed per unit was 5 pounds at a standard cost of $2.50 per pound. If there was a favorable usage variance of $25,000 for September, the actual quantity of materials used must have been

Accepted Answer

A)  210,000 pounds. 
B)  190,000 pounds. 
C)  105,000 pounds. 
D)  95,000 pounds. 
A)  210,000 pounds. 
B)  190,000 pounds. 
C)  105,000 pounds. 
D)  95,000 pounds.

Question 15

The actual quantity of input at the actual price less the actual quantity of input at the standard price is the price variance.

Accepted Answer

A) True 
 B)False

Question 16

The unit standard quantity of inputs is vital to the computation of total amount of inputs allowed for the actual output and efficiency variances.

Accepted Answer

A) True 
 B)False

Question 17

The sum of the price and usage variances will add up to the total materials variance only if the materials purchased is equal to the materials used.

Accepted Answer

A) True 
 B)False

Question 18

Standards based on the amount of input that should be used per unit of output are called

Accepted Answer

A)  quantity standards. 
B)  price standards. 
C)  ideal standards. 
D)  currently attainable standards. 
E)  kaizen standards. 
A)  quantity standards. 
B)  price standards. 
C)  ideal standards. 
D)  currently attainable standards. 
E)  kaizen standards.

Question 19

Figure 10-2.
Highland Company's standard cost is $250,000. The allowable deviation is$\pm$10%. Its actual costs for six months are
  
-Refer to Figure 10-2. The variance that is higher than the upper control limit is

Accepted Answer

A)  $220,000 
B)  $280,000 
C)  $265,000 
D)  $235,000 
A)  $220,000 
B)  $280,000 
C)  $265,000 
D)  $235,000

Question 20

Stratford Company inspects every steam iron it manufactures for safety issues. The standard labor cost is $12 per hour. The maintenance standard at the beginning of the first quarter is 20 minutes per iron. Stratford is implementing a new production process that will aid in reducing any potential electrical defects in the irons. This will decrease the inspection time to 15 minutes per iron. After the end of the first quarter, the new process had reduced the inspection time per iron from 20 minutes to 14 minutes.

Accepted Answer

The answer of Stratford Company inspects every steam iron it...

The usage variance is the difference between the actual and standard quantity of inputs

In setting price standards for materials and labor,

The ____________________ is the difference between the actual cost of the input and its planned cost.

The standard quantity of materials allowed is computed by the equation

Mersey Company produced 1,000 trash cans during March using 450 direct labor hours and purchased and used 3,100 pounds of rubber. Its materials and labor standards are: Its materials price variance was a favorable $620 and its labor rate variance was an unfavorable $900.

Standards are set by using historical experiences, ___________________, and input from operating personnel, marketing, and accounting.

In a ____________________, costs are assigned to products using quantity and price standards for all three manufacturing costs: direct materials, direct labor, and overhead.

During September, 40,000 units were produced. The standard quantity of material allowed per unit was 5 pounds at a standard cost of $2.50 per pound. If there was a favorable usage variance of $25,000 for September, the actual quantity of materials used must have been

The actual quantity of input at the actual price less the actual quantity of input at the standard price is the price variance.

The unit standard quantity of inputs is vital to the computation of total amount of inputs allowed for the actual output and efficiency variances.

The sum of the price and usage variances will add up to the total materials variance only if the materials purchased is equal to the materials used.

Standards based on the amount of input that should be used per unit of output are called

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Profit Planning

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

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Exam 10: Standard Costing: a Managerial Control Tool

The usage variance is the difference between the actual and standard quantity of inputs

In setting price standards for materials and labor,

The ____________________ is the difference between the actual cost of the input and its planned cost.

The standard quantity of materials allowed is computed by the equation

Mersey Company produced 1,000 trash cans during March using 450 direct labor hours and purchased and used 3,100 pounds of rubber. Its materials and labor standards are: Its materials price variance was a favorable $620 and its labor rate variance was an unfavorable $900.

Standards are set by using historical experiences, ___________________, and input from operating personnel, marketing, and accounting.

In a ____________________, costs are assigned to products using quantity and price standards for all three manufacturing costs: direct materials, direct labor, and overhead.

During September, 40,000 units were produced. The standard quantity of material allowed per unit was 5 pounds at a standard cost of $2.50 per pound. If there was a favorable usage variance of $25,000 for September, the actual quantity of materials used must have been

The actual quantity of input at the actual price less the actual quantity of input at the standard price is the price variance.

The unit standard quantity of inputs is vital to the computation of total amount of inputs allowed for the actual output and efficiency variances.

The sum of the price and usage variances will add up to the total materials variance only if the materials purchased is equal to the materials used.

Standards based on the amount of input that should be used per unit of output are called

Figure 10-2. Highland Company's standard cost is $250,000. The allowable deviation is ±\pm± 10%. Its actual costs for six months are -Refer to Figure 10-2. The variance that is higher than the upper control limit is

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Profit Planning

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

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