Question 1

The difference between total actual cost incurred and total standard cost applied is referred to as _________________________.

Accepted Answer

The answer of The difference between total actual cost incurred...

Question 2

Wimberley Company
Wimberley Company has the following information available for December when 3,500 units were produced (round answers to the nearest dollar).
$\begin{array}{ll}
\text { Standards: } & 3.5 \text { pounds } \
\text { Material } & \text { per unit @ } \
& \$ 4.50 \text { per } \
& \text { pound } \
& 5.0 \text { hours } \
\text { Labor } & \text { per unit @ } \
& \$ 10.25 \text { per } \
& \text { hour }
\end{array}$

$\begin{array}{ll}
\text { Actual: } & \
\text { Material purchased } & 12,300 \
&  \text { pounds } @ \
& \$ 4.25 \
\text { Material used } & 11,750 \
& \text { pounds } \
17,300 \text { direct1abor hours @ } &
\end{array}$
$\$ 10.20 \text { per hour }$

Refer to Wimberley Company.Assume that the company computes the material price variance on the basis of material issued to production.What is the total material variance?

Accepted Answer

A) $2,850 U 
B) $2,850 F 
C) $5,188 U 
D) $5,188 F 
A) $2,850 U 
B) $2,850 F 
C) $5,188 U 
D) $5,188 F

Question 3

Cibolo Company
Cibolo Company has the following information available for March when 4,200 units were produced (round answers to the nearest dollar).
$\begin{array}{ll}
\text { Standards: } &4.0 \text { pounds } \
\text { Material } & \text { per unit @ } \
& \$ 5.25 \text { per } \
& \text { pound } \
& 6.0 \text { hours } \
\text { Labor } & \text { per unit @ } \
& \$ 10.00 \text { per } \
& \text { hour }
\end{array}$

$\begin{array}{ll}
\text { Actual: } & \
\text { Material purchased } & 17,500 \
&  \text { pounds } @ \
& \$ 5.10 \
\text { Material used } & 16,700 \
& \text { pounds } \
25,500 \text { direct1abor hours @ } &
\end{array}$
$\$9.85 \text { per hour }$

Refer to Cibolo Company.Assume that the company computes the material price variance on the basis of material issued to production.What is the total material variance?

Accepted Answer

A) $1,050 U 
B) $1,050 F 
C) $3,030 U 
D) $3,030 F 
A) $1,050 U 
B) $1,050 F 
C) $3,030 U 
D) $3,030 F

Question 4

Buckingham Company
Buckingham Company uses a standard cost system for its production process and applies overhead based on direct labor hours.The following information is available for May when Buckingham produced 4,500 units:
             Standard:                      DLH per unit        2.50               Variable overhead per DLH         $1.75               Fixed overhead per DLH       $3.10               Budgeted variable overhead       $21,875               Budgeted fixed overhead       $38,750                   Actual:                      Direct labor hours         10,000               Variable overhead       $26,250               Fixed overhead       $38,000      
Refer to Buckingham Company.Using the four-variance approach,what is the volume variance?

Accepted Answer

A) $3,125 F 
B) $3,875 F 
C) $6,063 U 
D) $3,875 U 
A) $3,125 F 
B) $3,875 F 
C) $6,063 U 
D) $3,875 U

Question 5

The difference between budgeted and applied fixed factory overhead is referred to as a fixed overhead volume variance.

Accepted Answer

A) True 
 B)False

Question 6

A flexible budget is an effective tool for budgeting factory overhead.

Accepted Answer

A) True 
 B)False

Question 7

Ideal standards generally yield unfavorable variances.

Accepted Answer

A) True 
 B)False

Question 8

An operations flow document shows all processes necessary to manufacture one unit of a product.

Accepted Answer

A) True 
 B)False

Question 9

Under the two-variance approach,the volume variance is computed by subtracting ____ based on standard input allowed for the production achieved from budgeted overhead.

Accepted Answer

A) applied overhead 
B) actual overhead 
C) budgeted fixed overhead plus actual variable overhead 
D) budgeted variable overhead 
A) applied overhead 
B) actual overhead 
C) budgeted fixed overhead plus actual variable overhead 
D) budgeted variable overhead

Question 10

The usage variance reflects the difference between the price paid for inputs and the standard price for those inputs.

Accepted Answer

A) True 
 B)False

Question 11

Explain the source of variable overhead spending and efficiency variances and how these variances are computed.

Accepted Answer

The variable overhead spending variance

Question 12

The material price variance (computed at point of purchase)is

Accepted Answer

A) the difference between the actual cost of material purchased and the standard cost of material purchased. 
B) the difference between the actual cost of material purchased and the standard cost of material used. 
C) primarily the responsibility of the production manager. 
D) both a and c. 
A) the difference between the actual cost of material purchased and the standard cost of material purchased. 
B) the difference between the actual cost of material purchased and the standard cost of material used. 
C) primarily the responsibility of the production manager. 
D) both a and c.

Question 13

Pearce Company
Pearce Company uses a standard cost system for its production process.Pearce Company applies overhead based on direct labor hours.The following information is available for July:
             Standard:                      DLH per unit      2.20               Variable overhead per DLH         $2.50               Fixed overhead per DLH                      Budgeted variable overhead      $3.00              (based on 11,990 DLHs)                          Actual:                 Units produced       4,400               Direct labor hours        8,800               Variable overhead      $29,950               Fixed overhead      $42,300      
Refer to Pearce Company Using the four-variance approach,what is the fixed overhead spending variance?

Accepted Answer

A) $15,900 U 
B) $6,330 U 
C) $6,930 U 
D) $935 F 
A) $15,900 U 
B) $6,330 U 
C) $6,930 U 
D) $935 F

Question 14

The formula for usage variance is (AQ - SQ)* AP.

Accepted Answer

A) True 
 B)False

Question 15

When multiple materials are used,the difference between the total quantity and the standard quantity of output when a nonstandard mix of materials is used is known as the _________________________ variance.

Accepted Answer

The answer of When multiple materials are used,the difference between...

Question 16

The difference between the actual wages paid to employees and the standard wages for all hours worked is the labor efficiency variance.

Accepted Answer

A) True 
 B)False

Question 17

Industrial Solutions Company
Industrial Solutions Company manufactures a cleaning solvent.The company employs both skilled and unskilled workers.To produce one 55-gallon drum of solvent requires Materials A and B as well as skilled labor and unskilled labor.The standard and actual material and labor information is presented below:
Standard:
Material A: 30.25 gallons @ $1.25 per gallon
Material B: 24.75 gallons @ $2.00 per gallon
Skilled Labor: 4 hours @ $12 per hour
Unskilled Labor: 2 hours @ $ 7 per hour
Actual:
Material A: 10,716 gallons purchased and used @ $1.50 per gallon
Material B: 17,484 gallons purchased and used @ $1.90 per gallon
Skilled labor hours: 1,950 @ $11.90 per hour
Unskilled labor hours: 1,300 @ $7.15 per hour
During the current month Industrial Solutions Company manufactured 500 55-gallon drums.
Round all answers to the nearest whole dollar.
Refer to Industrial Solutions Company.What is the total material yield variance?

Accepted Answer

A) $1,111 U 
B) $1,111 F 
C) $2,670 U 
D) $2,670 F 
A) $1,111 U 
B) $1,111 F 
C) $2,670 U 
D) $2,670 F

Question 18

A primary purpose of using a standard cost system is

Accepted Answer

A) to make things easier for managers in the production facility. 
B) to provide a distinct measure of cost control. 
C) to minimize the cost per unit of production. 
D) b and c are correct. 
A) to make things easier for managers in the production facility. 
B) to provide a distinct measure of cost control. 
C) to minimize the cost per unit of production. 
D) b and c are correct.

Question 19

A standard cost system may be used in

Accepted Answer

A) job order costing,but not process costing. 
B) process costing,but not job order costing. 
C) either job order costing or process costing. 
D) neither job order costing nor process costing. 
A) job order costing,but not process costing. 
B) process costing,but not job order costing. 
C) either job order costing or process costing. 
D) neither job order costing nor process costing.

Question 20

Buckingham Company
Buckingham Company uses a standard cost system for its production process and applies overhead based on direct labor hours.The following information is available for May when Buckingham produced 4,500 units:
             Standard:                      DLH per unit        2.50               Variable overhead per DLH         $1.75               Fixed overhead per DLH       $3.10               Budgeted variable overhead       $21,875               Budgeted fixed overhead       $38,750                   Actual:                      Direct labor hours         10,000               Variable overhead       $26,250               Fixed overhead       $38,000      
Refer to Buckingham Company.Using the two-variance approach,what is the noncontrollable variance?

Accepted Answer

A) $3,125 F 
B) $3,875 U 
C) $3,875 F 
D) $6,062 U 
A) $3,125 F 
B) $3,875 U 
C) $3,875 F 
D) $6,062 U

The difference between total actual cost incurred and total standard cost applied is referred to as _________________________.

The difference between budgeted and applied fixed factory overhead is referred to as a fixed overhead volume variance.

A flexible budget is an effective tool for budgeting factory overhead.

Ideal standards generally yield unfavorable variances.

An operations flow document shows all processes necessary to manufacture one unit of a product.

Under the two-variance approach,the volume variance is computed by subtracting ____ based on standard input allowed for the production achieved from budgeted overhead.

The usage variance reflects the difference between the price paid for inputs and the standard price for those inputs.

Explain the source of variable overhead spending and efficiency variances and how these variances are computed.

The material price variance (computed at point of purchase)is

The formula for usage variance is (AQ - SQ)* AP.

When multiple materials are used,the difference between the total quantity and the standard quantity of output when a nonstandard mix of materials is used is known as the _________________________ variance.

The difference between the actual wages paid to employees and the standard wages for all hours worked is the labor efficiency variance.

A primary purpose of using a standard cost system is

A standard cost system may be used in

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting,support Department Allocations,and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters

Standard:
DLH per unit	2.50
Variable overhead per DLH	$1.75
Fixed overhead per DLH	$3.10
Budgeted variable overhead	$21,875
Budgeted fixed overhead	$38,750

Actual:
Direct labor hours	10,000
Variable overhead	$26,250
Fixed overhead	$38,000

Standard:
DLH per unit	2.20
Variable overhead per DLH	$2.50
Fixed overhead per DLH
Budgeted variable overhead	$3.00
(based on 11,990 DLHs)

Actual:
Units produced	4,400
Direct labor hours	8,800
Variable overhead	$29,950
Fixed overhead	$42,300

Exam 7: Standard Costing and Variance Analysis

The difference between total actual cost incurred and total standard cost applied is referred to as _________________________.

The difference between budgeted and applied fixed factory overhead is referred to as a fixed overhead volume variance.

A flexible budget is an effective tool for budgeting factory overhead.

Ideal standards generally yield unfavorable variances.

An operations flow document shows all processes necessary to manufacture one unit of a product.

Under the two-variance approach,the volume variance is computed by subtracting ____ based on standard input allowed for the production achieved from budgeted overhead.

The usage variance reflects the difference between the price paid for inputs and the standard price for those inputs.

Explain the source of variable overhead spending and efficiency variances and how these variances are computed.

The material price variance (computed at point of purchase)is

The formula for usage variance is (AQ - SQ)* AP.

When multiple materials are used,the difference between the total quantity and the standard quantity of output when a nonstandard mix of materials is used is known as the _________________________ variance.

The difference between the actual wages paid to employees and the standard wages for all hours worked is the labor efficiency variance.

A primary purpose of using a standard cost system is

A standard cost system may be used in

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting,support Department Allocations,and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters