Question 1

The direct labor time variance measures the efficiency of the direct labor force.

Accepted Answer

A) True 
 B)False

Question 2

Accounting systems that use standards for product costs are called budgeted cost systems.

Accepted Answer

A) True 
 B)False

Question 3

Favorable fixed factory overhead volume variances are never harmful, since achieving them encourages managers to run the factory above normal capacity.

Accepted Answer

A) True 
 B)False

Question 4

Prepare an income statement (through income before income tax) for presentation to management, using the following data from the records of Greenway Manufacturing Company for November of the current year:

Accepted Answer

The answer of Prepare an income statement (through income before...

Question 5

The following data relate to direct labor costs for the current period:   What is the direct labor rate variance?

Accepted Answer

A)  $2,250 unfavorable 
B)  $2,125 unfavorable 
C)  $2,250 favorable 
D)  $2,125 favorable 
A)  $2,250 unfavorable 
B)  $2,125 unfavorable 
C)  $2,250 favorable 
D)  $2,125 favorable

Question 6

Sally's Chocolate Company makes gourmet cupcakes which are sold by the dozen. Compute the standard cost for one dozen cupcakes, based on the following standards:

Accepted Answer

The answer of Sally's Chocolate Company makes gourmet cupcakes which...

Question 7

The formula to the compute direct labor time variance is to calculate the difference between

Accepted Answer

A)  Actual costs - Standard costs 
B)  Actual costs + Standard costs 
C)  (Actual hours × Standard rate) - Standard costs 
D)  Actual costs - (Actual hours × Standard rate) 
A)  Actual costs - Standard costs 
B)  Actual costs + Standard costs 
C)  (Actual hours × Standard rate) - Standard costs 
D)  Actual costs - (Actual hours × Standard rate)

Question 8

The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory overhead) based on 100% of normal capacity of 30,000 direct labor hours. The standard cost and the actual cost of factory overhead for the production of 5,000 units during May were as follows:   What is the amount of the fixed factory overhead volume variance?

Accepted Answer

A)  $12,500 favorable 
B)  $10,000 unfavorable 
C)  $12,500 unfavorable 
D)  $10,000 favorable 
A)  $12,500 favorable 
B)  $10,000 unfavorable 
C)  $12,500 unfavorable 
D)  $10,000 favorable

Question 9

At the end of the fiscal year, the variances from standard are usually transferred to the finished goods account.

Accepted Answer

A) True 
 B)False

Question 10

Standard costs are divided into which of the following components?

Accepted Answer

A)  variance standard and quantity standard 
B)  materials standard and labor standard 
C)  quality standard and quantity standard 
D)  price standard and quantity standard 
A)  variance standard and quantity standard 
B)  materials standard and labor standard 
C)  quality standard and quantity standard 
D)  price standard and quantity standard

Question 11

The standard cost is how much a product should cost to manufacture.

Accepted Answer

A) True 
 B)False

Question 12

Oak Company produces a chair that requires 6 yards of material per unit. The standard price of one yard of material is $7.50. During the month, 8,500 chairs were manufactured, using 48,875 yards. 
Journalize the entry to record the standard direct materials used in production.

Accepted Answer

The answer of Oak Company produces a chair that requires...

Question 13

The following data is given for the Bahia Company:   Overhead is applied on standard labor hours.
The fixed factory overhead volume variance is

Accepted Answer

A)  $65 unfavorable 
B)  $65favorable 
C)  $540 unfavorable 
D)  $540 favorable 
A)  $65 unfavorable 
B)  $65favorable 
C)  $540 unfavorable 
D)  $540 favorable

Question 14

*Actual hours are equal to standard hours for units produced.
Tthe variable factory overhead controllable variance is

Accepted Answer

A)  $8,981.75 favorable 
B)  $7,280.75 unfavorable 
C)  $8,981.75 unfavorable 
D)  $7,280.75 favorable 
A)  $8,981.75 favorable 
B)  $7,280.75 unfavorable 
C)  $8,981.75 unfavorable 
D)  $7,280.75 favorable

Question 15

Standard costs should always be revised when they differ from actual costs.

Accepted Answer

A) True 
 B)False

Question 16

Ruby Company produces a chair that requires 5 yards of material per unit. The standard price of one yard of material is $7.50. During the month, 8,500 chairs were manufactured, using 43,600 yards at a cost of $7.55 per yard. 
Determine: 
(a) price variance 
(b) quantity variance 
(c) cost variance.

Accepted Answer

(a) Price variance = ($7.50 -

Question 17

Compute the standard cost for one pair of boots, based on the following standards for each pair of boots:

Accepted Answer

The answer of Compute the standard cost for one pair...

Question 18

At the end of the fiscal year, variances from standard costs are usually transferred to the

Accepted Answer

A)  direct labor account 
B)  factory overhead account 
C)  cost of goods sold account 
D)  direct materials account 
A)  direct labor account 
B)  factory overhead account 
C)  cost of goods sold account 
D)  direct materials account

Question 19

Ruby Company produces a chair that requires 5 yards of material per unit. The standard price of one yard of material is $7.50. During the month, 8,400 chairs were manufactured, using 43,700 yards at a cost of $7.30 per yard. 
 
Determine: 
(a) price variance 
(b) quantity variance 
(c) total cost variance.

Accepted Answer

(a) Price variance = ($7.30 -

Question 20

The total manufacturing cost variance consists of

Accepted Answer

A)  direct materials price variance, direct labor cost variance, and fixed factory overhead volume variance 
B)  direct materials cost variance, direct labor rate variance, and factory overhead cost variance 
C)  direct materials cost variance, direct labor cost variance, and variable factory overhead controllable variance 
D)  direct materials cost variance, direct labor cost variance, and factory overhead cost variance 
A)  direct materials price variance, direct labor cost variance, and fixed factory overhead volume variance 
B)  direct materials cost variance, direct labor rate variance, and factory overhead cost variance 
C)  direct materials cost variance, direct labor cost variance, and variable factory overhead controllable variance 
D)  direct materials cost variance, direct labor cost variance, and factory overhead cost variance

The direct labor time variance measures the efficiency of the direct labor force.

Accounting systems that use standards for product costs are called budgeted cost systems.

Favorable fixed factory overhead volume variances are never harmful, since achieving them encourages managers to run the factory above normal capacity.

Prepare an income statement (through income before income tax) for presentation to management, using the following data from the records of Greenway Manufacturing Company for November of the current year:

The following data relate to direct labor costs for the current period: What is the direct labor rate variance?

Sally's Chocolate Company makes gourmet cupcakes which are sold by the dozen. Compute the standard cost for one dozen cupcakes, based on the following standards:

The formula to the compute direct labor time variance is to calculate the difference between

At the end of the fiscal year, the variances from standard are usually transferred to the finished goods account.

Standard costs are divided into which of the following components?

The standard cost is how much a product should cost to manufacture.

Oak Company produces a chair that requires 6 yards of material per unit. The standard price of one yard of material is $7.50. During the month, 8,500 chairs were manufactured, using 48,875 yards. Journalize the entry to record the standard direct materials used in production.

The following data is given for the Bahia Company: Overhead is applied on standard labor hours. The fixed factory overhead volume variance is

*Actual hours are equal to standard hours for units produced. Tthe variable factory overhead controllable variance is

Standard costs should always be revised when they differ from actual costs.

Ruby Company produces a chair that requires 5 yards of material per unit. The standard price of one yard of material is $7.50. During the month, 8,500 chairs were manufactured, using 43,600 yards at a cost of $7.55 per yard. Determine: (a) price variance (b) quantity variance (c) cost variance.

Compute the standard cost for one pair of boots, based on the following standards for each pair of boots:

At the end of the fiscal year, variances from standard costs are usually transferred to the

The total manufacturing cost variance consists of

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity Based Costing

Cost Volume Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

Statement of Cash Flows

Financial Statement Analysis

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Exam 8: Evaluating Variances From Standard Costs

The direct labor time variance measures the efficiency of the direct labor force.

Accounting systems that use standards for product costs are called budgeted cost systems.

Favorable fixed factory overhead volume variances are never harmful, since achieving them encourages managers to run the factory above normal capacity.

Prepare an income statement (through income before income tax) for presentation to management, using the following data from the records of Greenway Manufacturing Company for November of the current year:

The following data relate to direct labor costs for the current period: What is the direct labor rate variance?

Sally's Chocolate Company makes gourmet cupcakes which are sold by the dozen. Compute the standard cost for one dozen cupcakes, based on the following standards:

The formula to the compute direct labor time variance is to calculate the difference between

At the end of the fiscal year, the variances from standard are usually transferred to the finished goods account.

Standard costs are divided into which of the following components?

The standard cost is how much a product should cost to manufacture.

Oak Company produces a chair that requires 6 yards of material per unit. The standard price of one yard of material is $7.50. During the month, 8,500 chairs were manufactured, using 48,875 yards. Journalize the entry to record the standard direct materials used in production.

The following data is given for the Bahia Company: Overhead is applied on standard labor hours. The fixed factory overhead volume variance is

*Actual hours are equal to standard hours for units produced. Tthe variable factory overhead controllable variance is

Standard costs should always be revised when they differ from actual costs.

Ruby Company produces a chair that requires 5 yards of material per unit. The standard price of one yard of material is $7.50. During the month, 8,500 chairs were manufactured, using 43,600 yards at a cost of $7.55 per yard. Determine: (a) price variance (b) quantity variance (c) cost variance.

Compute the standard cost for one pair of boots, based on the following standards for each pair of boots:

At the end of the fiscal year, variances from standard costs are usually transferred to the

The total manufacturing cost variance consists of

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity Based Costing

Cost Volume Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

Statement of Cash Flows

Financial Statement Analysis

Filters