Question 1

Parnell Company prepared its income statement for internal use.How would amounts for cost of goods sold and variances appear?

Accepted Answer

A) Cost of goods sold would be at actual costs and variances would be reported separately. 
B) Cost of goods sold would be combined with the variances and the net amount reported at standard cost. 
C) Cost of goods sold would be at standard costs and variances would be reported separately. 
D) Cost of goods sold would be combined with the variances and the net amount reported at actual cost. 
A) Cost of goods sold would be at actual costs and variances would be reported separately. 
B) Cost of goods sold would be combined with the variances and the net amount reported at standard cost. 
C) Cost of goods sold would be at standard costs and variances would be reported separately. 
D) Cost of goods sold would be combined with the variances and the net amount reported at actual cost. C

Question 2

In reporting variances

Accepted Answer

A) promptness is relatively unimportant. 
B) management normally investigates all variances. 
C) the reports should facilitate management by exception. 
D) the reports are not departmentalized. 
A) promptness is relatively unimportant. 
B) management normally investigates all variances. 
C) the reports should facilitate management by exception. 
D) the reports are not departmentalized. D

Question 3

An unfavorable materials quantity variance would occur if

Accepted Answer

A) more materials were purchased than were used. 
B) actual pounds of materials used were less than the standard pounds allowed. 
C) actual labor hours used were greater than the standard labor hours allowed. 
D) actual pounds of materials used were greater than the standard pounds allowed. 
A) more materials were purchased than were used. 
B) actual pounds of materials used were less than the standard pounds allowed. 
C) actual labor hours used were greater than the standard labor hours allowed. 
D) actual pounds of materials used were greater than the standard pounds allowed. D

Question 4

Allowance for spoilage is part of the direct

Accepted Answer

A) materials price standard. 
B) materials quantity standard. 
C) labor price standard. 
D) labor quantity standard. 
A) materials price standard. 
B) materials quantity standard. 
C) labor price standard. 
D) labor quantity standard.

Question 5

If the labor quantity variance is unfavorable and the cause is inefficient use of direct labor the responsibility rests with the

Accepted Answer

A) sales department. 
B) production department. 
C) budget office. 
D) controller's department. 
A) sales department. 
B) production department. 
C) budget office. 
D) controller's department.

Question 6

Which is not one of the four most commonly used perspectives on a balanced scorecard?

Accepted Answer

A) The financial perspective 
B) The customer perspective 
C) The external process perspective 
D) The learning and growth perspective 
A) The financial perspective 
B) The customer perspective 
C) The external process perspective 
D) The learning and growth perspective

Question 7

Budget data are not journalized in cost accounting systems with the exception of

Accepted Answer

A) the application of manufacturing overhead. 
B) direct labor budgets. 
C) direct materials budgets. 
D) cash budget data. 
A) the application of manufacturing overhead. 
B) direct labor budgets. 
C) direct materials budgets. 
D) cash budget data.

Question 8

Edgar Inc.has a materials price standard of $2.00 per pound.Six thousand pounds of materials were purchased at $2.20 a pound.The actual quantity of materials used was 6000 pounds although the standard quantity allowed for the output was 5400 pounds. Edgar Inc.'s materials price variance is

Accepted Answer

A) $120 U. 
B) $1200 U. 
C) $1080 U. 
D) $1200 F. 
A) $120 U. 
B) $1200 U. 
C) $1080 U. 
D) $1200 F.

Question 9

Monster Company produces a product requiring 3 direct labor hours at $16.00 per hour.During January 2000 products are produced using 6300 direct labor hours.Monster's actual payroll during January was $98280.What is the labor quantity variance?

Accepted Answer

A) $2280 U 
B) $4800 F 
C) $2520 F 
D) $4800 U 
A) $2280 U 
B) $4800 F 
C) $2520 F 
D) $4800 U

Question 10

Variance reports are

Accepted Answer

A) external financial reports. 
B) SEC financial reports. 
C) internal reports for management. 
D) All of these answers are correct. 
A) external financial reports. 
B) SEC financial reports. 
C) internal reports for management. 
D) All of these answers are correct.

Question 11

Shipp Inc.manufactures a product requiring two pounds of direct material.During 2019 Shipp purchases 24000 pounds of material for $99200 when the standard price per pound is $4.During 2019 Shipp uses 22000 pounds to make 12000 products.The standard direct material cost per unit of finished product is

Accepted Answer

A) $8.27. 
B) $9.01. 
C) $8.00. 
D) $8.53. 
A) $8.27. 
B) $9.01. 
C) $8.00. 
D) $8.53.

Question 12

Labor efficiency is measured by the

Accepted Answer

A) materials quantity variance. 
B) total labor variance. 
C) labor quantity variance. 
D) labor rate variance. 
A) materials quantity variance. 
B) total labor variance. 
C) labor quantity variance. 
D) labor rate variance.

Question 13

Variance analysis facilitates the principle of "management by exception."

Accepted Answer

A) True 
 B)False

Question 14

The total overhead variance is the difference between the

Accepted Answer

A) actual overhead costs and overhead costs applied based on standard hours allowed. 
B) actual overhead costs and overhead costs applied based on actual hours. 
C) overhead costs applied based on actual hours and overhead costs applied based on standard hours allowed. 
D) the actual overhead costs and the standard direct labor costs. 
A) actual overhead costs and overhead costs applied based on standard hours allowed. 
B) actual overhead costs and overhead costs applied based on actual hours. 
C) overhead costs applied based on actual hours and overhead costs applied based on standard hours allowed. 
D) the actual overhead costs and the standard direct labor costs.

Question 15

Income statements prepared internally for management often show cost of goods sold at standard cost and variances are

Accepted Answer

A) separately disclosed. 
B) deducted as other expenses and revenues. 
C) added to cost of goods sold. 
D) closed directly to retained earnings. 
A) separately disclosed. 
B) deducted as other expenses and revenues. 
C) added to cost of goods sold. 
D) closed directly to retained earnings.

Question 16

A company purchases 12000 pounds of materials.The materials price variance is $6000 favorable.What is the difference between the standard and actual price paid for the materials?

Accepted Answer

A) $1.00 
B) $.50 
C) $2.00 
D) $6.00 
A) $1.00 
B) $.50 
C) $2.00 
D) $6.00

Question 17

The standard number of hours that should have been worked for the output attained is 10000 direct labor hours and the actual number of direct labor hours worked was 10500.If the direct labor price variance was $10500 unfavorable and the standard rate of pay was $12 per direct labor hour what was the actual rate of pay for direct labor?

Accepted Answer

A) $11 per direct labor hour 
B) $9 per direct labor hour 
C) $13 per direct labor hour 
D) $12 per direct labor hour 
A) $11 per direct labor hour 
B) $9 per direct labor hour 
C) $13 per direct labor hour 
D) $12 per direct labor hour

Question 18

A standard is a unit amount whereas a budget is a total amount.

Accepted Answer

A) True 
 B)False

Question 19

All Urban Company produces a product requiring 4 pounds of material costing $3.50 per pound.During December All Urban purchased 4200 pounds of material for $14112 and used the material to produce 500 products.What was the materials price variance for December?

Accepted Answer

A) $560 F 
B) $588 F 
C) $112 U 
D) $672 U 
A) $560 F 
B) $588 F 
C) $112 U 
D) $672 U

Question 20

If actual direct materials costs are greater than standard direct materials costs it means that

Accepted Answer

A) actual costs were calculated incorrectly. 
B) the actual unit price of direct materials was greater than the standard unit price of direct materials. 
C) the actual unit price of raw materials or the actual quantities of raw materials used was greater than the standard unit price or standard quantities of raw materials expected. 
D) the purchasing agent or the production foreman is inefficient. 
A) actual costs were calculated incorrectly. 
B) the actual unit price of direct materials was greater than the standard unit price of direct materials. 
C) the actual unit price of raw materials or the actual quantities of raw materials used was greater than the standard unit price or standard quantities of raw materials expected. 
D) the purchasing agent or the production foreman is inefficient.

Parnell Company prepared its income statement for internal use.How would amounts for cost of goods sold and variances appear?

In reporting variances

An unfavorable materials quantity variance would occur if

Allowance for spoilage is part of the direct

If the labor quantity variance is unfavorable and the cause is inefficient use of direct labor the responsibility rests with the

Which is not one of the four most commonly used perspectives on a balanced scorecard?

Budget data are not journalized in cost accounting systems with the exception of

Edgar Inc.has a materials price standard of $2.00 per pound.Six thousand pounds of materials were purchased at $2.20 a pound.The actual quantity of materials used was 6000 pounds although the standard quantity allowed for the output was 5400 pounds. Edgar Inc.'s materials price variance is

Monster Company produces a product requiring 3 direct labor hours at $16.00 per hour.During January 2000 products are produced using 6300 direct labor hours.Monster's actual payroll during January was $98280.What is the labor quantity variance?

Variance reports are

Labor efficiency is measured by the

Variance analysis facilitates the principle of "management by exception."

The total overhead variance is the difference between the

Income statements prepared internally for management often show cost of goods sold at standard cost and variances are

A company purchases 12000 pounds of materials.The materials price variance is $6000 favorable.What is the difference between the standard and actual price paid for the materials?

A standard is a unit amount whereas a budget is a total amount.

All Urban Company produces a product requiring 4 pounds of material costing $3.50 per pound.During December All Urban purchased 4200 pounds of material for $14112 and used the material to produce 500 products.What was the materials price variance for December?

If actual direct materials costs are greater than standard direct materials costs it means that

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Fraud, Internal Control, and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities and Stockholders Equity

Financial Analysis: the Big Picture

Managerial Accounting

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Cost-Volume Profit Analysis: Additional Issues

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Exam 16: Activity Based Costing

Parnell Company prepared its income statement for internal use.How would amounts for cost of goods sold and variances appear?

In reporting variances

An unfavorable materials quantity variance would occur if

Allowance for spoilage is part of the direct

If the labor quantity variance is unfavorable and the cause is inefficient use of direct labor the responsibility rests with the

Which is not one of the four most commonly used perspectives on a balanced scorecard?

Budget data are not journalized in cost accounting systems with the exception of

Edgar Inc.has a materials price standard of $2.00 per pound.Six thousand pounds of materials were purchased at $2.20 a pound.The actual quantity of materials used was 6000 pounds although the standard quantity allowed for the output was 5400 pounds. Edgar Inc.'s materials price variance is

Monster Company produces a product requiring 3 direct labor hours at $16.00 per hour.During January 2000 products are produced using 6300 direct labor hours.Monster's actual payroll during January was $98280.What is the labor quantity variance?

Variance reports are

Labor efficiency is measured by the

Variance analysis facilitates the principle of "management by exception."

The total overhead variance is the difference between the

Income statements prepared internally for management often show cost of goods sold at standard cost and variances are

A company purchases 12000 pounds of materials.The materials price variance is $6000 favorable.What is the difference between the standard and actual price paid for the materials?

A standard is a unit amount whereas a budget is a total amount.

All Urban Company produces a product requiring 4 pounds of material costing $3.50 per pound.During December All Urban purchased 4200 pounds of material for $14112 and used the material to produce 500 products.What was the materials price variance for December?

If actual direct materials costs are greater than standard direct materials costs it means that

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Fraud, Internal Control, and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities and Stockholders Equity

Financial Analysis: the Big Picture

Managerial Accounting

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Cost-Volume Profit Analysis: Additional Issues

Filters