Question 1

On the basis of this information,determine Alexis's total labor variance.

Accepted Answer

A) $15,880U 
B) $9,720F 
C) $15,720F 
D) $9,720U 
E) $15,880F 
A) $15,880U 
B) $9,720F 
C) $15,720F 
D) $9,720U 
E) $15,880F

Question 2

The individual generally responsible for the direct-material price variance is the:

Accepted Answer

A) sales manager. 
B) production supervisor. 
C) purchasing manager. 
D) finance manager. 
E) head of the human resources department. 
A) sales manager. 
B) production supervisor. 
C) purchasing manager. 
D) finance manager. 
E) head of the human resources department.

Question 3

An unfavorable labor rate variance is created when:

Accepted Answer

A) actual labor hours worked exceed standard hours allowed. 
B) actual hours worked are less than standard hours allowed. 
C) actual wages paid are less than amounts that should have been paid. 
D) actual units produced exceed budgeted production levels. 
E) actual wages paid exceed amounts that should have been paid for the number of hours worked. 
A) actual labor hours worked exceed standard hours allowed. 
B) actual hours worked are less than standard hours allowed. 
C) actual wages paid are less than amounts that should have been paid. 
D) actual units produced exceed budgeted production levels. 
E) actual wages paid exceed amounts that should have been paid for the number of hours worked.

Question 4

Standard cost systems can have motivational effects;some are desirable,some are not.Consider the following situation:
The materials purchasing manager is paid a salary plus a bonus based on the net favorable materials price variance.Generally,this bonus amounts to 30 - 40% of the manager's total compensation.Due to the bankruptcy of a company in a related field,there is an opportunity to buy a key raw material.The standards for this material call for grade 2A,usually purchased for $56 per ton.Because of the bankruptcy,the company can obtain a higher grade,4A,for $62 per ton.While the quality of the final product will be the same regardless of the grade of material used,there will be substantial savings in material yield and labor productivity if 4A is used.These savings are expected to be two-to-three times the additional cost of $6 per ton.
Required:
A.An unfavorable price variance reduces any net favorable variance that may have arisen during the year.A sufficient number of such events could cause the net material price variance to be unfavorable and would eliminate the bonus to the materials purchasing manager.
A.How would an unfavorable price variance on a particular purchase affect the overall price variance for the year and the manager's bonus?
B.The use of the variance in this way would lead to an undesirable behavioral outcome.The materials purchasing manager is a gatekeeper;that is,this manager observes the purchasing opportunities available and determines whether or not the company will follow them.In this case,the manager would be unlikely to pursue the grade 4A material because of the negative effect on the bonus calculation.As a result,the overall possibility of offsetting higher purchase costs with savings in yield and productivity would not occur.
B.Would the use of the materials price variance as a basis for the manager's bonus lead to a desirable or undesirable behavioral outcome? Explain,being sure to note whether the manager would likely pursue acquisition of the grade 4A material.

Accepted Answer

A.An unfavorable price variance reduces

Question 5

Halo Enterprises recently experienced a fire,forcing the company to use incomplete information to analyze operations.Consider the following data and assume that all materials purchased during the period were used in production:
Direct materials:
Standard price per pound: $9
Actual price per pound: $8
Price variance: $20,000F
Total of direct-material variances: $2,000F
Direct labor:
Actual hours worked: 40,000
Actual rate per hour: $15
Efficiency variance: $28,000F
Total of direct-labor variances: $12,000U
Halo completed 12,000 units.
Required:
Determine the following: (1)actual materials used,(2)direct-material quantity variance,(3)direct-labor rate variance,(4)standard labor rate per hour,and (5)standard labor time per finished unit.

Accepted Answer

@#IMG-DLM& 
1.Actual materials used:20,000 pounds

Question 6

Variances are computed by taking the difference between which of the following?

Accepted Answer

A) Product cost and period cost. 
B) Actual cost and differential cost. 
C) Price factors and rate factors. 
D) Actual cost and standard cost. 
E) Product cost and standard cost. 
A) Product cost and period cost. 
B) Actual cost and differential cost. 
C) Price factors and rate factors. 
D) Actual cost and standard cost. 
E) Product cost and standard cost.

Question 7

Which of the following correctly lists all the information needed to calculate a labor rate variance?

Accepted Answer

A) Standard labor rate and actual hours worked. 
B) Actual hours worked and actual units produced. 
C) Standard labor rate,actual labor rate,and actual units produced. 
D) Actual labor rate and actual hours workeD. 
E) Actual labor rate,standard labor rate,and actual hours worked. 
A) Standard labor rate and actual hours worked. 
B) Actual hours worked and actual units produced. 
C) Standard labor rate,actual labor rate,and actual units produced. 
D) Actual labor rate and actual hours workeD. 
E) Actual labor rate,standard labor rate,and actual hours worked.

Question 8

Which of the following balanced-scorecard perspectives is influenced by a company's vision and strategy?

Accepted Answer

A) Financial. 
B) Customer. 
C) Internal operations. 
D) Learning and growth. 
E) All of thesE. 
A) Financial. 
B) Customer. 
C) Internal operations. 
D) Learning and growth. 
E) All of thesE.

Question 9

Standard costs are said to be useful in performance evaluation.Assume that the standard direct materials cost per unit of finished product is $6 (three pounds at $2 per pound).
Required:
A.Explain how such a standard can be used to evaluate performance.
A.The standard provides a measure of how much material should be used for a unit of product and how much each pound of raw material should cost.This standard serves as a basis for evaluating performance by allowing a comparison to be made of standard cost/usage against actual cost/usage.
B.The degree of controllability is important because not all factors are subject to the same amount of control.For example,the market for the raw material may be a seller's market in which case management would have very little control over the material price variance.On the other hand,management generally has more control over the usage of materials because of the ability to influence the amount of scrap and rejected units produced.In short,a manager should be held accountable only for those items under his/her control.
B.Why is the degree of controllability important when utilizing standard costs to evaluate performance?

Accepted Answer

A.The standard provides a measure of how

Question 10

The direct-labor efficiency variance is:

Accepted Answer

A) $8,000F. 
B) $8,000U. 
C) $8,250F. 
D) $8,250U. 
E) None of thesE. 
A) $8,000F. 
B) $8,000U. 
C) $8,250F. 
D) $8,250U. 
E) None of thesE.

Question 11

The direct-material price variance is:

Accepted Answer

A) $4,620F. 
B) $4,620U. 
C) $5,200F. 
D) $5,200U. 
E) None of thesE. 
A) $4,620F. 
B) $4,620U. 
C) $5,200F. 
D) $5,200U. 
E) None of thesE.

Question 12

Lead indicators guide management to:

Accepted Answer

A) take actions now that will have positive effects on organizational performance now. 
B) take actions now that will have positive effects on organizational performance in the future. 
C) take actions in the future that will have positive effects on organizational performance now. 
D) take actions in the past that will have positive effects on organizational performance in the future. 
E) pursue identical strategies as those implemented with lag indicators. 
A) take actions now that will have positive effects on organizational performance now. 
B) take actions now that will have positive effects on organizational performance in the future. 
C) take actions in the future that will have positive effects on organizational performance now. 
D) take actions in the past that will have positive effects on organizational performance in the future. 
E) pursue identical strategies as those implemented with lag indicators.

Question 13

Which of the following is a predetermined estimated cost that can be used in the calculation of a variance?

Accepted Answer

A) Product cost. 
B) Actual cost. 
C) Standard cost. 
D) Differential cost. 
E) Marginal cost. 
A) Product cost. 
B) Actual cost. 
C) Standard cost. 
D) Differential cost. 
E) Marginal cost.

Question 14

Chen Enterprises purchased 67,000 pounds (cost = $616,400)of direct material to be used in the manufacture of the company's only product.According the production specifications,each completed unit requires four pounds of direct material at a standard cost of $9 per pound.Direct materials consumed by the end of the period totaled 65,500 pounds in the manufacture of 16,050 finished units.
An examination of Chen's payroll records revealed that the company worked 42,000 labor hours (cost = $621,600)during the period,and specifications called for each completed unit requiring 2.6 hours of labor at a standard cost of $15 per hour.
Assume that the company computes variances at the earliest point in time.
Required:
Calculate the direct-material price and quantity variances,and the direct-labor rate and efficiency variances.Indicate whether each variance is favorable or unfavorable.

Accepted Answer

The answer of Chen Enterprises purchased 67,000 pounds (cost =...

Question 15

A favorable labor rate variance is created when:

Accepted Answer

A) actual labor hours worked exceed standard hours allowed. 
B) actual hours worked are less than standard hours allowed. 
C) actual wages paid are less than amounts that should have been paid for the number of hours worked. 
D) actual units produced exceed budgeted production levels. 
E) actual units produced exceed standard hours allowed. 
A) actual labor hours worked exceed standard hours allowed. 
B) actual hours worked are less than standard hours allowed. 
C) actual wages paid are less than amounts that should have been paid for the number of hours worked. 
D) actual units produced exceed budgeted production levels. 
E) actual units produced exceed standard hours allowed.

Question 16

The direct-material quantity variance is:

Accepted Answer

A) $1,000F. 
B) $1,000U. 
C) $1,040F. 
D) $1,040U. 
E) $2,000F. 
A) $1,000F. 
B) $1,000U. 
C) $1,040F. 
D) $1,040U. 
E) $2,000F.

Question 17

Consider the following statements:
I.Behavioral scientists find that perfection standards often discourage employees and result in low worker morale.
II.Practical standards are also known as attainable standards.
III.Practical standards incorporate a certain amount of inefficiency such as that caused by an occasional machine breakdown.
Which of the above statements is (are)true?

Accepted Answer

A) I only. 
B) II only. 
C) III only. 
D) II and III. 
E) I,II,and III. 
A) I only. 
B) II only. 
C) III only. 
D) II and III. 
E) I,II,and III.

Question 18

Taylor's direct-labor efficiency variance was

Accepted Answer

A) $2,900F. 
B) $2,900U. 
C) $2,960F. 
D) $2,960U. 
E) None of thesE. 
A) $2,900F. 
B) $2,900U. 
C) $2,960F. 
D) $2,960U. 
E) None of thesE.

Question 19

In the calculation of manufacturing cycle efficiency,which of the following activities results in value-added time?

Accepted Answer

A) Moving. 
B) Processing. 
C) Inspection. 
D) Waiting. 
E) All of thesE. 
A) Moving. 
B) Processing. 
C) Inspection. 
D) Waiting. 
E) All of thesE.

Question 20

Howard Company has established the following standards:
Direct materials: 2.0 pounds at $4.10
Direct labor: 1.5 hours at $7 per hour
Additional information was extracted from the accounting records:
Actual production: 32,000 completed units
Direct materials purchased: 70,000 pounds at $3.82,or $267,400
Direct materials consumed: 65,000 pounds
Actual labor incurred: 51,000 hours at $6.30,or $321,300
Direct-labor rate variance: $35,700 favorable
Direct-labor efficiency variance: $21,000 unfavorable
Assume that the company computes variances at the earliest point in time.
Required:
Prepare journal entries to record the:
A.Purchase of direct materials.
B.Usage of direct materials.
C.Incurrence of direct labor costs.
   
In "C" the Direct-Labor Efficiency Variance should be 21,000 and the Direct-Labor Rate Variance should be 35,700.

Accepted Answer

@#IMG-DLM& In "C" the Direct-Labor Effic

On the basis of this information,determine Alexis's total labor variance.

The individual generally responsible for the direct-material price variance is the:

An unfavorable labor rate variance is created when:

Variances are computed by taking the difference between which of the following?

Which of the following correctly lists all the information needed to calculate a labor rate variance?

Which of the following balanced-scorecard perspectives is influenced by a company's vision and strategy?

The direct-labor efficiency variance is:

The direct-material price variance is:

Lead indicators guide management to:

Which of the following is a predetermined estimated cost that can be used in the calculation of a variance?

A favorable labor rate variance is created when:

The direct-material quantity variance is:

Taylor's direct-labor efficiency variance was

In the calculation of manufacturing cycle efficiency,which of the following activities results in value-added time?

The Changing Role of Managerial Accounting in a Dynamic Business Environment

Basic Cost Management Concepts and Accounting for Mass Customization Operations

Product Costing and Cost Accumulation in a Batch Production Environment

Process Costing and Hybrid Product-Costing Systems

Activity-Based Costing and Management

Activity Analysis,cost Behavior,and Cost Estimation

Appendix I: The Sarbanes-Oxley Act, Internal Controls, and Management Accounting

Cost-Volume-Profit Analysis

Absorption and Variable Costing

Profit Planning and Activity-Based Budgeting

Flexible Budgeting and the Management of Overhead and Support Activity Costs

Responsibility Accounting, Quality Control, and Environmental Cost Management

Investment Centers and Transfer Pricing

Decision Making: Relevant Costs and Benefits

Target Costing and Cost Analysis for Pricing Decisions

Capital Expenditure Decisions

Allocation of Support Activity Costs and Joint Costs

compound Interest and the Concept of Present Value

Inventory Management

Filters

Exam 10: Standard Costing,Operational Performance Measures,and the Balanced Scorecard

On the basis of this information,determine Alexis's total labor variance.

The individual generally responsible for the direct-material price variance is the:

An unfavorable labor rate variance is created when:

Variances are computed by taking the difference between which of the following?

Which of the following correctly lists all the information needed to calculate a labor rate variance?

Which of the following balanced-scorecard perspectives is influenced by a company's vision and strategy?

The direct-labor efficiency variance is:

The direct-material price variance is:

Lead indicators guide management to:

Which of the following is a predetermined estimated cost that can be used in the calculation of a variance?

A favorable labor rate variance is created when:

The direct-material quantity variance is:

Taylor's direct-labor efficiency variance was

In the calculation of manufacturing cycle efficiency,which of the following activities results in value-added time?

The Changing Role of Managerial Accounting in a Dynamic Business Environment

Basic Cost Management Concepts and Accounting for Mass Customization Operations

Product Costing and Cost Accumulation in a Batch Production Environment

Process Costing and Hybrid Product-Costing Systems

Activity-Based Costing and Management

Activity Analysis,cost Behavior,and Cost Estimation

Appendix I: The Sarbanes-Oxley Act, Internal Controls, and Management Accounting

Cost-Volume-Profit Analysis

Absorption and Variable Costing

Profit Planning and Activity-Based Budgeting

Flexible Budgeting and the Management of Overhead and Support Activity Costs

Responsibility Accounting, Quality Control, and Environmental Cost Management

Investment Centers and Transfer Pricing

Decision Making: Relevant Costs and Benefits

Target Costing and Cost Analysis for Pricing Decisions

Capital Expenditure Decisions

Allocation of Support Activity Costs and Joint Costs

compound Interest and the Concept of Present Value

Inventory Management

Filters