Question 1

A standard cost system:

Accepted Answer

A) Cannot be used in conjunction with a job-cost system. 
B) Is not permissible for financial-reporting purposes. 
C) Is most easily introduced in conjunction with a process-cost system. 
D) Is useful for planning but not control purposes. 
E) Is useful for cost control but not planning purposes. 
A) Cannot be used in conjunction with a job-cost system. 
B) Is not permissible for financial-reporting purposes. 
C) Is most easily introduced in conjunction with a process-cost system. 
D) Is useful for planning but not control purposes. 
E) Is useful for cost control but not planning purposes. C

Question 2

Which of the following is not an anticipated benefit of switching to a JIT production system?

Accepted Answer

A) Reduction in inventory holding costs. 
B) Reduction of monitoring costs associated with the production system. 
C) Reduction in customer-response time. 
D) Increased sales due to increases in quality and customer satisfaction. 
E) Reduction in internal failure costs, such as the cost of reworking defective outputs. 
A) Reduction in inventory holding costs. 
B) Reduction of monitoring costs associated with the production system. 
C) Reduction in customer-response time. 
D) Increased sales due to increases in quality and customer satisfaction. 
E) Reduction in internal failure costs, such as the cost of reworking defective outputs. B

Question 3

The actual direct labor hours worked (AQ) during November was:

Accepted Answer

A) 18,720. 
B) 19,200. 
C) 20,800. 
D) 22,400. 
E) 22,464. 
A) 18,720. 
B) 19,200. 
C) 20,800. 
D) 22,400. 
E) 22,464. E

Question 4

What were the total standard hours allowed for the units manufactured in August?

Accepted Answer

A) 10,000. 
B) 12,000. 
C) 12,500. 
D) 15,000. 
E) 15,625. 
A) 10,000. 
B) 12,000. 
C) 12,500. 
D) 15,000. 
E) 15,625.

Question 5

Chapter 14 argues that a comprehensive management accounting and control system would include nonfinancial as well as financial performance indicators. Two such nonfinancial performance indicators were discussed in conjunction with organizations that adopt a just-in-time (JIT) production philosophy: customer-response time (CRT) and process cycle efficiency (PCE). Explain each of these two performance indicators.

Accepted Answer

Answer may vary
Feedback: As indicated i

Question 6

A company's flexible budget for 15,000 units of production showed sales of $48,000; variable costs of $18,000; and fixed costs of $12,000. The operating income in the master budget for 20,000 units is:

Accepted Answer

A) $8,000. 
B) $13,500. 
C) $24,000. 
D) $28,000. 
E) $30,000. 
A) $8,000. 
B) $13,500. 
C) $24,000. 
D) $28,000. 
E) $30,000.

Question 7

For a direct material, which one of the following is the difference between the actual and standard unit price of the direct material multiplied by the actual quantity of the material purchased?

Accepted Answer

A) Direct materials purchase price variance. 
B) Direct materials volume variance. 
C) Direct materials usage variance. 
D) Direct materials flexible-budget variance. 
E) Direct materials mix variance. 
A) Direct materials purchase price variance. 
B) Direct materials volume variance. 
C) Direct materials usage variance. 
D) Direct materials flexible-budget variance. 
E) Direct materials mix variance.

Question 8

A standard cost system should be designed to generate and report cost and revenue variances:

Accepted Answer

A) Coincidental with regular reporting intervals. 
B) As soon as possible. 
C) Only when significant in amount. 
D) Only when negative in impact. 
E) Only when requested by decision-makers. 
A) Coincidental with regular reporting intervals. 
B) As soon as possible. 
C) Only when significant in amount. 
D) Only when negative in impact. 
E) Only when requested by decision-makers.

Question 9

What was Mandy's actual direct labor rate per hour (AP)?

Accepted Answer

A) $43.20. 
B) $45.60. 
C) $48.00. 
D) $52.20. 
E) $54.00. 
A) $43.20. 
B) $45.60. 
C) $48.00. 
D) $52.20. 
E) $54.00.

Question 10

What was the actual hourly rate for direct labor?

Accepted Answer

A) $30. 
B) $36. 
C) $44. 
D) $50. 
E) $56. 
A) $30. 
B) $36. 
C) $44. 
D) $50. 
E) $56.

Question 11

A flexible-budget variance measures the impact on short-term operating profit of:

Accepted Answer

A) Changes in sales volume. 
B) Changes in output during the period. 
C) Differences in sales mix-budgeted versus actual. 
D) Selling price and cost differences-actual versus budgeted. 
E) Selling price, but not cost differences-actual versus budgeted. 
A) Changes in sales volume. 
B) Changes in output during the period. 
C) Differences in sales mix-budgeted versus actual. 
D) Selling price and cost differences-actual versus budgeted. 
E) Selling price, but not cost differences-actual versus budgeted.

Question 12

The actual total quantity of materials purchased during the month was:

Accepted Answer

A) 10,000 square feet. 
B) 10,400 square feet. 
C) 11,000 square feet. 
D) 13,840 square feet. 
E) 14,880 square feet. 
A) 10,000 square feet. 
B) 10,400 square feet. 
C) 11,000 square feet. 
D) 13,840 square feet. 
E) 14,880 square feet.

Question 13

The actual purchase price per pound of direct materials is:

Accepted Answer

A) $6.12. 
B) $6.15. 
C) $6.50. 
D) $6.75. 
E) $7.13. 
A) $6.12. 
B) $6.15. 
C) $6.50. 
D) $6.75. 
E) $7.13.

Question 14

What was the direct materials usage variance in August?

Accepted Answer

A) $180 unfavorable. 
B) $360 unfavorable. 
C) $540 favorable. 
D) $540 unfavorable. 
E) $720 unfavorable. 
A) $180 unfavorable. 
B) $360 unfavorable. 
C) $540 favorable. 
D) $540 unfavorable. 
E) $720 unfavorable.

Question 15

Flexible budgets and standard costs are useful for assessing:

Accepted Answer

A) Strategic performance during the most recent period. 
B) Operating performance during the period. 
C) Short-term financial performance. 
D) Management control. 
E) The level of control over basic business processes. 
A) Strategic performance during the most recent period. 
B) Operating performance during the period. 
C) Short-term financial performance. 
D) Management control. 
E) The level of control over basic business processes.

Question 16

The direct labor rate variance for November is:

Accepted Answer

A) $26,624.00 unfavorable. 
B) $31,948.80 unfavorable. 
C) $39,936.00 favorable. 
D) $71,884.80 favorable. 
E) $103,833.60 favorable. 
A) $26,624.00 unfavorable. 
B) $31,948.80 unfavorable. 
C) $39,936.00 favorable. 
D) $71,884.80 favorable. 
E) $103,833.60 favorable.

Question 17

What is a direct labor efficiency variance, and what are some of the likely causes of this variance?

Accepted Answer

Answer may vary
Feedback: The direct lab

Question 18

What were the total standard hours allowed (SQ) for the units manufactured during the month?

Accepted Answer

A) 1,000. 
B) 2,500. 
C) 4,000. 
D) 5,000. 
E) 6,000. 
A) 1,000. 
B) 2,500. 
C) 4,000. 
D) 5,000. 
E) 6,000.

Question 19

The column heading identified as B is:

Accepted Answer

A) Selling price variance. 
B) Efficiency variance. 
C) Flexible-budget (F
B)  variances. 
D) Sales volume variance. 
E) Production volume variance. 
A) Selling price variance. 
B) Efficiency variance. 
C) Flexible-budget (F
B)  variances. 
D) Sales volume variance. 
E) Production volume variance.

Question 20

Chapter 14 introduces you to the concept of operational control systems. Within the context of this discussion, certain limitations of financial control systems were presented. Provide a summary of the primary limitations of short-term financial performance indicators, such as the variances discussed in the main part of the chapter.

Accepted Answer

Answer may vary
Feedback: As indicated i

A standard cost system:

Which of the following is not an anticipated benefit of switching to a JIT production system?

The actual direct labor hours worked (AQ) during November was:

What were the total standard hours allowed for the units manufactured in August?

A company's flexible budget for 15,000 units of production showed sales of $48,000; variable costs of $18,000; and fixed costs of $12,000. The operating income in the master budget for 20,000 units is:

For a direct material, which one of the following is the difference between the actual and standard unit price of the direct material multiplied by the actual quantity of the material purchased?

A standard cost system should be designed to generate and report cost and revenue variances:

What was Mandy's actual direct labor rate per hour (AP)?

What was the actual hourly rate for direct labor?

A flexible-budget variance measures the impact on short-term operating profit of:

The actual total quantity of materials purchased during the month was:

The actual purchase price per pound of direct materials is:

What was the direct materials usage variance in August?

Flexible budgets and standard costs are useful for assessing:

The direct labor rate variance for November is:

What is a direct labor efficiency variance, and what are some of the likely causes of this variance?

What were the total standard hours allowed (SQ) for the units manufactured during the month?

The column heading identified as B is:

Short-Term Profit Planning: Cost-Volume-Profit CVP Analysis

Implementing Strategy: The Value Chain, the Balanced Scorecard, and the Strategy Map

Basic Cost Management Concepts

Job Costing

Activity-Based Costing and Customer Profitability Analysis

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit Cvp Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

The Management and Control of Quality

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

Filters

Exam 14: Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

A standard cost system:

Which of the following is not an anticipated benefit of switching to a JIT production system?

The actual direct labor hours worked (AQ) during November was:

What were the total standard hours allowed for the units manufactured in August?

A company's flexible budget for 15,000 units of production showed sales of $48,000; variable costs of $18,000; and fixed costs of $12,000. The operating income in the master budget for 20,000 units is:

For a direct material, which one of the following is the difference between the actual and standard unit price of the direct material multiplied by the actual quantity of the material purchased?

A standard cost system should be designed to generate and report cost and revenue variances:

What was Mandy's actual direct labor rate per hour (AP)?

What was the actual hourly rate for direct labor?

A flexible-budget variance measures the impact on short-term operating profit of:

The actual total quantity of materials purchased during the month was:

The actual purchase price per pound of direct materials is:

What was the direct materials usage variance in August?

Flexible budgets and standard costs are useful for assessing:

The direct labor rate variance for November is:

What is a direct labor efficiency variance, and what are some of the likely causes of this variance?

What were the total standard hours allowed (SQ) for the units manufactured during the month?

The column heading identified as B is:

Short-Term Profit Planning: Cost-Volume-Profit CVP Analysis

Implementing Strategy: The Value Chain, the Balanced Scorecard, and the Strategy Map

Basic Cost Management Concepts

Job Costing

Activity-Based Costing and Customer Profitability Analysis

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit Cvp Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

The Management and Control of Quality

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

Filters