Question 1

The costing of inventories at standard cost for external financial statement reporting purposes is

Accepted Answer

A) not permitted. 
B) preferable to reporting at actual costs. 
C) in accordance with generally accepted accounting principles if significant differences exist between actual and standard costs. 
D) in accordance with generally accepted accounting principles if significant differences do not exist between actual and standard costs. 
A) not permitted. 
B) preferable to reporting at actual costs. 
C) in accordance with generally accepted accounting principles if significant differences exist between actual and standard costs. 
D) in accordance with generally accepted accounting principles if significant differences do not exist between actual and standard costs.

Question 2

The direct materials quantity standard would not be expressed in

Accepted Answer

A) pounds. 
B) barrels. 
C) dollars. 
D) board feet. 
A) pounds. 
B) barrels. 
C) dollars. 
D) board feet.

Question 3

The standard direct materials price per pound is

Accepted Answer

A) $1.96. 
B) $2.00. 
C) $2.13 
D) $2.17 
A) $1.96. 
B) $2.00. 
C) $2.13 
D) $2.17

Question 4

A favorable variance

Accepted Answer

A) is an indication that the company is not operating in an optimal manner. 
B) implies a positive result if quality control standards are met. 
C) implies a positive result if standards are flexible. 
D) means that standards are too loosely specified. 
A) is an indication that the company is not operating in an optimal manner. 
B) implies a positive result if quality control standards are met. 
C) implies a positive result if standards are flexible. 
D) means that standards are too loosely specified.

Question 5

Atkins Inc.produces a product requiring 8 pounds of material at $1.50 per pound.Atkins produced 10000 units of this product during 2022 resulting in a $30000 unfavorable materials quantity variance.How many pounds of direct material did Atkins use during 2022?

Accepted Answer

A) 100000 pounds 
B) 80000 pounds 
C) 160000 pounds 
D) 125000 pounds 
A) 100000 pounds 
B) 80000 pounds 
C) 160000 pounds 
D) 125000 pounds

Question 6

An unfavorable labor quantity variance may be caused by

Accepted Answer

A) paying workers higher wages than expected. 
B) misallocation of workers. 
C) worker fatigue or carelessness. 
D) higher pay rates mandated by union contracts. 
A) paying workers higher wages than expected. 
B) misallocation of workers. 
C) worker fatigue or carelessness. 
D) higher pay rates mandated by union contracts.

Question 7

In developing a standard cost for direct materials a price factor and a quantity factor must be considered.

Accepted Answer

A) True 
 B)False

Question 8

The purchasing agent of the Poplin Inc.ordered materials of lower quality in an effort to economize on price.What variance will most likely result?

Accepted Answer

A) Favorable materials quantity variance 
B) Favorable total materials variance 
C) Unfavorable materials price variance 
D) Unfavorable labor quantity variance 
A) Favorable materials quantity variance 
B) Favorable total materials variance 
C) Unfavorable materials price variance 
D) Unfavorable labor quantity variance

Question 9

What is a standard cost?

Accepted Answer

A) The total number of units times the budgeted amount expected 
B) Any amount that appears on a budget 
C) The total amount that appears on the budget for product costs 
D) The amount management thinks should be incurred to produce a good or service 
A) The total number of units times the budgeted amount expected 
B) Any amount that appears on a budget 
C) The total amount that appears on the budget for product costs 
D) The amount management thinks should be incurred to produce a good or service

Question 10

When is a variance considered to be significant?

Accepted Answer

A) When it is large compared to the actual cost 
B) When it is infrequent 
C) When it is unfavorable 
D) When it could have been controlled more effectively 
A) When it is large compared to the actual cost 
B) When it is infrequent 
C) When it is unfavorable 
D) When it could have been controlled more effectively

Question 11

Setting standard costs is relatively simple because it is done entirely by accountants.

Accepted Answer

A) True 
 B)False

Question 12

All of the following are advantages of standard costs except they

Accepted Answer

A) facilitate management planning. 
B) are useful in setting selling prices. 
C) simplify costing in inventories. 
D) increase net income. 
A) facilitate management planning. 
B) are useful in setting selling prices. 
C) simplify costing in inventories. 
D) increase net income.

Question 13

Dillon has a standard of 2 hours of labor per unit at $12 per hour.In producing 2000 units Dillon used 3850 hours of labor at a total cost of $46970.Dillon's labor price variance is

Accepted Answer

A) $770 U. 
B) $800 U. 
C) $1030 F. 
D) $1930 F. 
A) $770 U. 
B) $800 U. 
C) $1030 F. 
D) $1930 F.

Question 14

Using standard costs

Accepted Answer

A) makes employees less "cost-conscious." 
B) provides a basis for evaluating cost control. 
C) makes management by exception more difficult. 
D) increases clerical costs. 
A) makes employees less "cost-conscious." 
B) provides a basis for evaluating cost control. 
C) makes management by exception more difficult. 
D) increases clerical costs.

Question 15

The use of standard costs in inventory costing is prohibited in financial statements.

Accepted Answer

A) True 
 B)False

Question 16

Using standard costs

Accepted Answer

A) can make management planning more difficult. 
B) promotes greater economy. 
C) does not help in setting prices. 
D) weakens management control. 
A) can make management planning more difficult. 
B) promotes greater economy. 
C) does not help in setting prices. 
D) weakens management control.

Question 17

The standard direct labor hours per unit is

Accepted Answer

A) 1 hour. 
B) 1.1 hours. 
C) 1.2 hours. 
D) 1.3 hours. 
A) 1 hour. 
B) 1.1 hours. 
C) 1.2 hours. 
D) 1.3 hours.

Question 18

In using variance reports top management normally looks carefully at every variance.

Accepted Answer

A) True 
 B)False

Question 19

Actual costs that vary from standard costs always indicate inefficiencies.

Accepted Answer

A) True 
 B)False

Question 20

A variance is the difference between actual costs and standard costs.

Accepted Answer

A) True 
 B)False

The costing of inventories at standard cost for external financial statement reporting purposes is

The direct materials quantity standard would not be expressed in

The standard direct materials price per pound is

A favorable variance

Atkins Inc.produces a product requiring 8 pounds of material at $1.50 per pound.Atkins produced 10000 units of this product during 2022 resulting in a $30000 unfavorable materials quantity variance.How many pounds of direct material did Atkins use during 2022?

An unfavorable labor quantity variance may be caused by

In developing a standard cost for direct materials a price factor and a quantity factor must be considered.

The purchasing agent of the Poplin Inc.ordered materials of lower quality in an effort to economize on price.What variance will most likely result?

What is a standard cost?

When is a variance considered to be significant?

Setting standard costs is relatively simple because it is done entirely by accountants.

All of the following are advantages of standard costs except they

Dillon has a standard of 2 hours of labor per unit at $12 per hour.In producing 2000 units Dillon used 3850 hours of labor at a total cost of $46970.Dillon's labor price variance is

Using standard costs

The use of standard costs in inventory costing is prohibited in financial statements.

Using standard costs

The standard direct labor hours per unit is

In using variance reports top management normally looks carefully at every variance.

Actual costs that vary from standard costs always indicate inefficiencies.

A variance is the difference between actual costs and standard costs.

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

The costing of inventories at standard cost for external financial statement reporting purposes is

The direct materials quantity standard would not be expressed in

The standard direct materials price per pound is

A favorable variance

Atkins Inc.produces a product requiring 8 pounds of material at $1.50 per pound.Atkins produced 10000 units of this product during 2022 resulting in a $30000 unfavorable materials quantity variance.How many pounds of direct material did Atkins use during 2022?

An unfavorable labor quantity variance may be caused by

In developing a standard cost for direct materials a price factor and a quantity factor must be considered.

The purchasing agent of the Poplin Inc.ordered materials of lower quality in an effort to economize on price.What variance will most likely result?

What is a standard cost?

When is a variance considered to be significant?

Setting standard costs is relatively simple because it is done entirely by accountants.

All of the following are advantages of standard costs except they

Dillon has a standard of 2 hours of labor per unit at $12 per hour.In producing 2000 units Dillon used 3850 hours of labor at a total cost of $46970.Dillon's labor price variance is

Using standard costs

The use of standard costs in inventory costing is prohibited in financial statements.

Using standard costs

The standard direct labor hours per unit is

In using variance reports top management normally looks carefully at every variance.

Actual costs that vary from standard costs always indicate inefficiencies.

A variance is the difference between actual costs and standard costs.

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