Exam 10: Standard Costing: a Managerial Control Tool

Which of the following is not true regarding engineering studies?

Price standards are based on

MATCHING Match each item with the correct statement below. a. Quantity Standards b. Ideal Standards c. Price Standards d. Standard Cost Sheet e. Upper Control Limit f. Currently Attainable Standards g. Kaizen Standards -This is the standard plus the allowable deviation when determining whether variances are significant.

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 Price Variance

The ___________________ measures the difference between the labor hours that were actually used and the labor hours that should have been used.

Which of the following is not true regarding normal costing systems?

Currently attainable standards can be achieved under efficient operating conditions.

Which of the following is true regarding currently attainable standards?

Which of the following is true concerning the materials price variance?

Ideal standards can be achieved only if everything operates perfectly, meaning that they do not allow for any machine breakdowns, slack, etc.

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 -Total Materials Variance

Allison Company adopted a standard cost system several years ago. The standard costs for the prime costs of its single product follow: The following operating data were taken from the records for November: Compute the following:

The standard cost per unit of output for a particular input is calculated by multiplying the standard input price by the standard input allowed per unit of output produced.

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

________________ demands maximum efficiency and can be achieved only if everything operates perfectly.

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 total budget variances for materials and labor, respectively.

_______________ often means the difference between success and failure or between above-average profits and lesser profits.

Figure 10-5. -Refer to Figure 10-5. What is the materials usage variance?

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 -Actual Costs

In setting standards, historical experience should be used with caution because it can perpetuate operating inefficiencies.