Question 1

The standard variable overhead application rate is multiplied by what factor in determining split costs?

Accepted Answer

Actual usage of the cost driver for variable overhead

Question 2

Urban Transit Authority (UTA) runs a mass transit system in a large metropolitan area. UTA applies the costs of its services to each bus route. The standard direct labor cost (i.e. the drivers) is $15.50/hour. The standard route takes 2 hours to complete. This month, the company ran 4,000 routes, averaged 2.25 hours per route, and paid an average wage of $14/hour. 
What is the entry to record wages incurred?

Accepted Answer

Direct labor actual cost:
$14/hour × 2.25 hours/route ×4,000 routes
= $126,000
Direct labor split cost:
$15.50/hour × 2.25 hours/route ×4,000 routes
= $139,500
Direct labor standard cost:
$15/hour × 2 hours/route ×4,000 routes
= $124,000
Direct labor efficiency variance:
$139,500 - $124,000
= $15,500
Direct labor rate variance:
$126,000 - 139,500
= ($13,500)
Entry:

Question 3

The difference between the split cost and the standard cost for direct materials is called the:

Accepted Answer

A)  Materials Price Variance 
B)  Materials Usage Variance 
C)  Materials Efficiency Variance 
D)  Materials Budget Variance 
E)  None of the above 
A)  Materials Price Variance 
B)  Materials Usage Variance 
C)  Materials Efficiency Variance 
D)  Materials Budget Variance 
E)  None of the above C

Question 4

Use the following information to answer Questions below: 
The following actual and standard cost data for direct material and direct labor relate to the production of 4,000 units of product:
  
-Determine the labor rate variance.

Accepted Answer

A)  $950 F 
B)  $950 U 
C)  $1,000 F 
D)  $1,000 U 
E)  None of the above 
A)  $950 F 
B)  $950 U 
C)  $1,000 F 
D)  $1,000 U 
E)  None of the above

Question 5

Martin Corporation's accountant provided the following information:
   Assuming that there is no direct labor price variance, what is the variable overhead efficiency variance?

Accepted Answer

If there is no DL price variance, then t

Question 6

Use the following information to answer Questions below.
The following actual and standard cost data for direct material and direct labor relate to the production of 4,000 units of product:
  
-Determine the labor rate variance.

Accepted Answer

A)  $347 U 
B)  $347 F 
C)  $350 U 
D)  $350 F 
E)  None of the above 
A)  $347 U 
B)  $347 F 
C)  $350 U 
D)  $350 F 
E)  None of the above

Question 7

The following information is provided for Jibson, Inc.:
   What is the direct labor rate variance?

Accepted Answer

DL Rate Variance = AH × (AP - SP)
Actual

Question 8

Jessup Corp.'s Management only tracks the total amount of Utilities Expense incurred. However, the accounting manager wants to know whether the rate that the company is being charged for its utilities has gone up. Utilities are Jessup Corp.'s only variable overhead expense. Variable overhead is applied at a rate of $0.50/machine hour (calculated based on last year's utility bills and machine usage). Actual machine hours this period were 60,000, while the standard machine hours (given the current level of production) were 70,000. Actual utility payments were $34,000. 
Has the company's utility rate increased?
What should Jessup Corp. have expected utility bills to be, given actual machine hours?

Accepted Answer

Split Cost = Actual Driver Usage × Stand

Question 9

Using higher-quality materials in production can help to reduce an unfavorable direct materials efficiency variance.

Accepted Answer

A) True 
 B)False

Question 10

Use the following information to answer Questions below .
The following data relates to Koontz Corporation's operations for the month. 1,000 finished units of product were produced and the normal monthly capacity is 2,200 direct labor hours.
  
-What is the labor efficiency variance?

Accepted Answer

A)  $4,000 U 
B)  $8,000 U 
C)  $4,000 F 
D)  $8,000 F 
E)  None of the above 
A)  $4,000 U 
B)  $8,000 U 
C)  $4,000 F 
D)  $8,000 F 
E)  None of the above

Question 11

Which of the following could cause a variable overhead flexible budget variance?

Accepted Answer

A)  Variable overhead costs being greater than expected for the given driver usage 
B)  Variable overhead costs being less than expected for the given driver usage 
C)  Driver usage being greater than expected for the given level of production 
D)  Driver usage being less than expected for the given level of production 
E)  All of the above 
A)  Variable overhead costs being greater than expected for the given driver usage 
B)  Variable overhead costs being less than expected for the given driver usage 
C)  Driver usage being greater than expected for the given level of production 
D)  Driver usage being less than expected for the given level of production 
E)  All of the above

Question 12

What normally happens with variances at the end of the period?

Accepted Answer

They are t

Question 13

The actual cost of variable overhead is determined by multiplying the actual driver usage by the actual variable cost rate.

Accepted Answer

A) True 
 B)False

Question 14

Standard costing assumes that a company is producing 100% efficiently and allocates estimated costs appropriately.

Accepted Answer

A) True 
 B)False

Question 15

The following data relates to Potawatomi Corporation's operations for the month. Potawatomi produced 8,500 units and the normal monthly capacity is 20,000 direct labor hours.
   Use fork diagrams to calculate the following variances:
a. Materials price variance
b. Materials efficiency variance
c. Labor rate variance
d. Labor efficiency variance
e. Variable overhead spending variance
f. Variable overhead efficiency variance

Accepted Answer

a. Materials price variance = $3,900 U (

Question 16

The amount credited to Wages Payable for direct labor is the actual cost, rather than the standard cost.

Accepted Answer

A) True 
 B)False

Question 17

The following information is provided for Taylor Enterprises:
   What is the direct labor Split Cost?

Accepted Answer

Split Cost: Actual Hours (Actu

Question 18

Use the following information to complete Problems below 
Clayton Company manufactures titanium molds and uses standard costing to account for its production line results. The company's standard costs and quantities are listed below:
   Actual costs and quantities are listed below:
   Assume that beginning Work in Process inventory was zero.
-What is the entry to record the accrual of direct labor wages?

Accepted Answer

The answer of Use the following information to complete Problems...

Question 19

The standard variable overhead per-unit cost is equal to:

Accepted Answer

A)  Standard total overhead application rate × Standard capacity 
B)  Standard total overhead application rate × Actual capacity 
C)  Standard variable overhead application rate × Standard capacity 
D)  Standard variable overhead application rate × Actual capacity 
A)  Standard total overhead application rate × Standard capacity 
B)  Standard total overhead application rate × Actual capacity 
C)  Standard variable overhead application rate × Standard capacity 
D)  Standard variable overhead application rate × Actual capacity

Question 20

What is the term for the difference between actual wages paid and standard wages that would have been paid given the current level of production?

Accepted Answer

The labor

The standard variable overhead application rate is multiplied by what factor in determining split costs?

The difference between the split cost and the standard cost for direct materials is called the:

Use the following information to answer Questions below: The following actual and standard cost data for direct material and direct labor relate to the production of 4,000 units of product: -Determine the labor rate variance.

Martin Corporation's accountant provided the following information: Assuming that there is no direct labor price variance, what is the variable overhead efficiency variance?

Use the following information to answer Questions below. The following actual and standard cost data for direct material and direct labor relate to the production of 4,000 units of product: -Determine the labor rate variance.

The following information is provided for Jibson, Inc.: What is the direct labor rate variance?

Using higher-quality materials in production can help to reduce an unfavorable direct materials efficiency variance.

Use the following information to answer Questions below . The following data relates to Koontz Corporation's operations for the month. 1,000 finished units of product were produced and the normal monthly capacity is 2,200 direct labor hours. -What is the labor efficiency variance?

Which of the following could cause a variable overhead flexible budget variance?

What normally happens with variances at the end of the period?

The actual cost of variable overhead is determined by multiplying the actual driver usage by the actual variable cost rate.

Standard costing assumes that a company is producing 100% efficiently and allocates estimated costs appropriately.

The amount credited to Wages Payable for direct labor is the actual cost, rather than the standard cost.

The following information is provided for Taylor Enterprises: What is the direct labor Split Cost?

The standard variable overhead per-unit cost is equal to:

What is the term for the difference between actual wages paid and standard wages that would have been paid given the current level of production?

Overview of Managerial Accounting

Managerial Accounting Concepts and Cost Flows

Cost Accounting Systems: Job Order Costing

Cost Accounting Systems: Process Costing

Activity-Based Costing

Cost-Volume-Profit Relationships

Variable Costing: A Tool for Decision Making

Relevant Costs and Short-Term Decision Making

Planning and Budgeting

Flexible Budgets, Segment Analysis, and Performance Reporting

Capital Budgeting

Statement of Cash Flows

Analysis and Interpretation of Financial Statements

Appendix: Accounting and the Time Value of Money

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Exam 10: Standard Costing and Variance Analysis

The standard variable overhead application rate is multiplied by what factor in determining split costs?

The difference between the split cost and the standard cost for direct materials is called the:

Use the following information to answer Questions below: The following actual and standard cost data for direct material and direct labor relate to the production of 4,000 units of product: -Determine the labor rate variance.

Martin Corporation's accountant provided the following information: Assuming that there is no direct labor price variance, what is the variable overhead efficiency variance?

Use the following information to answer Questions below. The following actual and standard cost data for direct material and direct labor relate to the production of 4,000 units of product: -Determine the labor rate variance.

The following information is provided for Jibson, Inc.: What is the direct labor rate variance?

Using higher-quality materials in production can help to reduce an unfavorable direct materials efficiency variance.

Use the following information to answer Questions below . The following data relates to Koontz Corporation's operations for the month. 1,000 finished units of product were produced and the normal monthly capacity is 2,200 direct labor hours. -What is the labor efficiency variance?

Which of the following could cause a variable overhead flexible budget variance?

What normally happens with variances at the end of the period?

The actual cost of variable overhead is determined by multiplying the actual driver usage by the actual variable cost rate.

Standard costing assumes that a company is producing 100% efficiently and allocates estimated costs appropriately.

The amount credited to Wages Payable for direct labor is the actual cost, rather than the standard cost.

The following information is provided for Taylor Enterprises: What is the direct labor Split Cost?

The standard variable overhead per-unit cost is equal to:

What is the term for the difference between actual wages paid and standard wages that would have been paid given the current level of production?

Overview of Managerial Accounting

Managerial Accounting Concepts and Cost Flows

Cost Accounting Systems: Job Order Costing

Cost Accounting Systems: Process Costing

Activity-Based Costing

Cost-Volume-Profit Relationships

Variable Costing: A Tool for Decision Making

Relevant Costs and Short-Term Decision Making

Planning and Budgeting

Flexible Budgets, Segment Analysis, and Performance Reporting

Capital Budgeting

Statement of Cash Flows

Analysis and Interpretation of Financial Statements

Appendix: Accounting and the Time Value of Money

Filters