Question 1

Standard cost is the industry average cost for a particular item.

Accepted Answer

A) True 
 B)False

Question 2

Marburg Co.expects direct materials cost of $6 per unit for 100000 units (a total of $600000 of direct materials costs).Marburg's standard direct materials cost and budgeted direct materials cost is
$\begin{array}{llcc}
 \underline{ \text { \quad\quad  Standard }}&\underline{    \text { \quad\quad\quad Budgeted } }
\end{array}$
a. $\begin{array}{llcc}
  \text { $ \$ 6 $ per unit  } &\text {\quad\quad $ \$ 600,000 $ per year } 
\end{array}$

b. $\begin{array}{llcc}
  \text { $ \$ 6 $ per unit } &   \text { \quad\quad$ \$ 6 $ per unit  } 
\end{array}$

c. $\begin{array}{llcc}
  \text {$ \$ 600,000 $ per year } &   \text { $ \$ 6 $ per unit  } 
\end{array}$

d.  $\begin{array}{llcc}
  \text {$ \$ 600,000 $ per year } &   \text { $ \$ 600,000 $ per year } 
\end{array}$

Accepted Answer

The answer of Marburg Co.expects direct materials cost of $6...

Question 3

Most companies that use standards set them at

Accepted Answer

A) the normal level. 
B) a conceivable level. 
C) the ideal level. 
D) last year's level. 
A) the normal level. 
B) a conceivable level. 
C) the ideal level. 
D) last year's level.

Question 4

A company purchases 20000 pounds of materials.The materials price variance is $4000 favorable.What is the difference between the standard and actual price paid for the materials?

Accepted Answer

A) $1.00 
B) $0.20 
C) $5.00 
D) Cannot be determined from the data provided. 
A) $1.00 
B) $0.20 
C) $5.00 
D) Cannot be determined from the data provided.

Question 5

The total variance is $35000.The total materials variance is $14000.The total labor variance is twice the total overhead variance.What is the total overhead variance?

Accepted Answer

A) $3500 
B) $7000 
C) $10500 
D) $14000 
A) $3500 
B) $7000 
C) $10500 
D) $14000

Question 6

Which of the following is true?

Accepted Answer

A) The form content and frequency of variance reports vary considerably among companies. 
B) The form content and frequency of variance reports do not vary among companies. 
C) The form and content of variance reports vary considerably among companies but the frequency is always weekly. 
D) The form and content of variance reports are consistent among companies but the frequency varies. 
A) The form content and frequency of variance reports vary considerably among companies. 
B) The form content and frequency of variance reports do not vary among companies. 
C) The form and content of variance reports vary considerably among companies but the frequency is always weekly. 
D) The form and content of variance reports are consistent among companies but the frequency varies.

Question 7

Alex Co.prepared its income statement for management using a standard cost accounting system.Which of the following appears at the "standard" amount?

Accepted Answer

A) Sales 
B) Selling expenses 
C) Gross profit 
D) Cost of goods sold 
A) Sales 
B) Selling expenses 
C) Gross profit 
D) Cost of goods sold

Question 8

Manufacturing overhead costs are applied to work in process on the basis of

Accepted Answer

A) actual hours worked. 
B) standard hours allowed. 
C) ratio of actual variable to fixed costs. 
D) actual overhead costs incurred. 
A) actual hours worked. 
B) standard hours allowed. 
C) ratio of actual variable to fixed costs. 
D) actual overhead costs incurred.

Question 9

It is possible that a company's financial statements may report inventories at

Accepted Answer

A) budgeted costs. 
B) standard costs. 
C) both budgeted and standard costs. 
D) None of these answers are correct. 
A) budgeted costs. 
B) standard costs. 
C) both budgeted and standard costs. 
D) None of these answers are correct.

Question 10

Inventories cannot be valued at standard cost in financial statements.

Accepted Answer

A) True 
 B)False

Question 11

The total standard cost to produce one unit of product is shown

Accepted Answer

A) at the bottom of the income statement. 
B) at the bottom of the balance sheet. 
C) on the standard cost card. 
D) in the Work in Process Inventory account. 
A) at the bottom of the income statement. 
B) at the bottom of the balance sheet. 
C) on the standard cost card. 
D) in the Work in Process Inventory account.

Question 12

If a company is concerned with the potential negative effects of establishing standards it should

Accepted Answer

A) set loose standards that are easy to fulfill. 
B) offer wage incentives to those meeting standards. 
C) not employ any standards. 
D) set tight standards in order to motivate people. 
A) set loose standards that are easy to fulfill. 
B) offer wage incentives to those meeting standards. 
C) not employ any standards. 
D) set tight standards in order to motivate people.

Question 13

A manufacturing company would include setup and downtime in their 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 14

The per-unit standards for direct materials are 2 pounds at $5 per pound.Last month 11200 pounds of direct materials that actually cost $53000 were used to produce 6000 units of product.The direct materials quantity variance for last month was

Accepted Answer

A) $4000 favorable. 
B) $3000 favorable. 
C) $4000 unfavorable. 
D) $7000 unfavorable. 
A) $4000 favorable. 
B) $3000 favorable. 
C) $4000 unfavorable. 
D) $7000 unfavorable.

Question 15

The investigation of a materials quantity variance usually begins in the

Accepted Answer

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

Question 16

The formula for the materials quantity variance is

Accepted Answer

A) (SQ × AP) - (SQ × SP). 
B) (AQ × AP) - (AQ × SP). 
C) (AQ × SP) - (SQ × SP). 
D) (AQ × AP) - (SQ × SP). 
A) (SQ × AP) - (SQ × SP). 
B) (AQ × AP) - (AQ × SP). 
C) (AQ × SP) - (SQ × SP). 
D) (AQ × AP) - (SQ × SP).

Question 17

Normal standards incorporate normal contingencies of production into the standards.

Accepted Answer

A) True 
 B)False

Question 18

If actual costs are greater than standard costs there is a(n)

Accepted Answer

A) normal variance. 
B) unfavorable variance. 
C) favorable variance. 
D) error in the accounting system. 
A) normal variance. 
B) unfavorable variance. 
C) favorable variance. 
D) error in the accounting system.

Question 19

In using variance reports management looks for

Accepted Answer

A) total assets invested. 
B) significant variances. 
C) competitors' costs in comparison to the company's costs. 
D) more efficient ways of valuing inventories. 
A) total assets invested. 
B) significant variances. 
C) competitors' costs in comparison to the company's costs. 
D) more efficient ways of valuing inventories.

Question 20

Which of the following statements is true?

Accepted Answer

A) Variances are the differences between total actual costs and total standard costs. 
B) When actual costs exceed standard costs the variance is favorable. 
C) An unfavorable variance results when actual costs are decreasing but standards are not changed. 
D) All of the above are true. 
A) Variances are the differences between total actual costs and total standard costs. 
B) When actual costs exceed standard costs the variance is favorable. 
C) An unfavorable variance results when actual costs are decreasing but standards are not changed. 
D) All of the above are true.

Standard cost is the industry average cost for a particular item.

Most companies that use standards set them at

A company purchases 20000 pounds of materials.The materials price variance is $4000 favorable.What is the difference between the standard and actual price paid for the materials?

The total variance is $35000.The total materials variance is $14000.The total labor variance is twice the total overhead variance.What is the total overhead variance?

Which of the following is true?

Alex Co.prepared its income statement for management using a standard cost accounting system.Which of the following appears at the "standard" amount?

Manufacturing overhead costs are applied to work in process on the basis of

It is possible that a company's financial statements may report inventories at

Inventories cannot be valued at standard cost in financial statements.

The total standard cost to produce one unit of product is shown

If a company is concerned with the potential negative effects of establishing standards it should

A manufacturing company would include setup and downtime in their direct

The per-unit standards for direct materials are 2 pounds at $5 per pound.Last month 11200 pounds of direct materials that actually cost $53000 were used to produce 6000 units of product.The direct materials quantity variance for last month was

The investigation of a materials quantity variance usually begins in the

The formula for the materials quantity variance is

Normal standards incorporate normal contingencies of production into the standards.

If actual costs are greater than standard costs there is a(n)

In using variance reports management looks for

Which of the following statements is true?

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

Exam 16: Activity Based Costing

Standard cost is the industry average cost for a particular item.

Most companies that use standards set them at

A company purchases 20000 pounds of materials.The materials price variance is $4000 favorable.What is the difference between the standard and actual price paid for the materials?

The total variance is $35000.The total materials variance is $14000.The total labor variance is twice the total overhead variance.What is the total overhead variance?

Which of the following is true?

Alex Co.prepared its income statement for management using a standard cost accounting system.Which of the following appears at the "standard" amount?

Manufacturing overhead costs are applied to work in process on the basis of

It is possible that a company's financial statements may report inventories at

Inventories cannot be valued at standard cost in financial statements.

The total standard cost to produce one unit of product is shown

If a company is concerned with the potential negative effects of establishing standards it should

A manufacturing company would include setup and downtime in their direct

The per-unit standards for direct materials are 2 pounds at $5 per pound.Last month 11200 pounds of direct materials that actually cost $53000 were used to produce 6000 units of product.The direct materials quantity variance for last month was

The investigation of a materials quantity variance usually begins in the

The formula for the materials quantity variance is

Normal standards incorporate normal contingencies of production into the standards.

If actual costs are greater than standard costs there is a(n)

In using variance reports management looks for

Which of the following statements is true?

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