Question 1

Jennings Manufacturing gathered the following flexible budget information:
 
How much is the total budgeted overhead cost at 90% of normal capacity?

Accepted Answer

A) $230,000 
B) $100,000 
C) $217,000 
D) $207,000 
A) $230,000 
B) $100,000 
C) $217,000 
D) $207,000

Question 2

A favorable direct labor efficiency variance and an unfavorable direct labor rate variance might indicate which of the following?

Accepted Answer

A) Unskilled workers using more actual hours than standard,paid at a higher rate per hour than the standard rate 
B) Unskilled workers using less actual hours than standard,paid a lesser rate per hour than the standard rate 
C) Skilled workers using less actual hours than standard,paid at a higher rate per hour than the standard rate 
D) Skilled workers using more actual hours than standard,paid at a higher rate per hour than the standard rate 
A) Unskilled workers using more actual hours than standard,paid at a higher rate per hour than the standard rate 
B) Unskilled workers using less actual hours than standard,paid a lesser rate per hour than the standard rate 
C) Skilled workers using less actual hours than standard,paid at a higher rate per hour than the standard rate 
D) Skilled workers using more actual hours than standard,paid at a higher rate per hour than the standard rate

Question 3

Schenley Manufacturing builds playground equipment that it sells to elementary schools and municipalities.Schenley's management has contracted you to perform a variance analysis on the fixed manufacturing overhead for its line of slides.Schenley's cost accounting team informs you that it allocates fixed overhead based on machine hours.This period production was budgeted at 375 slides.Budgeted and actual production data follows:
 
What is the fixed manufacturing overhead volume variance in this period?

Accepted Answer

A) $2,750 unfavorable 
B) $1,320 unfavorable 
C) $2,750 favorable 
D) $1,320 favorable 
A) $2,750 unfavorable 
B) $1,320 unfavorable 
C) $2,750 favorable 
D) $1,320 favorable

Question 4

The ________ "shows how well management has controlled overhead costs."

Accepted Answer

A) overhead flexible budget variance 
B) production volume variance 
C) quantity variance 
D) price variance 
A) overhead flexible budget variance 
B) production volume variance 
C) quantity variance 
D) price variance

Question 5

Active Lifestyle Beverages gathered the following information for Job #928:
 
What is the direct labor rate variance?

Accepted Answer

A) $125 favorable 
B) $125 unfavorable 
C) $135 favorable 
D) $135 unfavorable 
A) $125 favorable 
B) $125 unfavorable 
C) $135 favorable 
D) $135 unfavorable

Question 6

A favorable direct materials price variance and an unfavorable direct materials quantity variance might indicate which of the following?

Accepted Answer

A) Less expensive,inferior materials requiring less than the standard amount were used in production. 
B) Less expensive,inferior materials requiring more than the standard amount were used in production. 
C) More expensive,superior materials requiring more than the standard amount were used in production. 
D) More expensive,superior materials requiring less than the standard amount were used in production. 
A) Less expensive,inferior materials requiring less than the standard amount were used in production. 
B) Less expensive,inferior materials requiring more than the standard amount were used in production. 
C) More expensive,superior materials requiring more than the standard amount were used in production. 
D) More expensive,superior materials requiring less than the standard amount were used in production.

Question 7

A price variance for production inputs is the difference between the actual unit price of an input and the standard unit price of the input,multiplied by the actual input quantity.

Accepted Answer

A) True 
 B)False

Question 8

How is the direct labor efficiency variance calculated?

Accepted Answer

A) The difference between the standard labor hours allowed and the actual labor hours used multiplied by the actual labor rate 
B) The difference between the standard labor hours allowed and the actual labor hours used multiplied by the standard labor rate 
C) The difference between the standard labor hours and the actual labor hours used 
D) The difference between the standard labor rate and the actual labor rate 
A) The difference between the standard labor hours allowed and the actual labor hours used multiplied by the actual labor rate 
B) The difference between the standard labor hours allowed and the actual labor hours used multiplied by the standard labor rate 
C) The difference between the standard labor hours and the actual labor hours used 
D) The difference between the standard labor rate and the actual labor rate

Question 9

The direct labor rate variance is calculated by multiplying the standard hours that should have been worked for the actual output by the difference between the standard labor rate and the actual labor rate.

Accepted Answer

A) True 
 B)False

Question 10

The Chilton Corporation specializes in manufacturing one type of desk lamp.Chilton allocates variable manufacturing overhead costs on the basis of machine hours.Chilton budgeted .5 machine hours per lamp and allocates overhead at a rate of $1.80 per machine hour.Last year Chilton manufactured 23,000 lamps,used 13,800 machine hours and incurred actual overhead costs of $15,180.
What was Chilton's variable manufacturing overhead efficiency variance last year?

Accepted Answer

A) $4,140 favorable 
B) $4,140 unfavorable 
C) $9,660 favorable 
D) $9,660 unfavorable 
A) $4,140 favorable 
B) $4,140 unfavorable 
C) $9,660 favorable 
D) $9,660 unfavorable

Question 11

Price and quantity variances are a way to motivate employees.

Accepted Answer

A) True 
 B)False

Question 12

The variable overhead rate variance may be affected by both indirect labor and indirect materials.

Accepted Answer

A) True 
 B)False

Question 13

The following information describes a company's usage of direct labor in a recent period:
 
How much is the direct labor rate variance?

Accepted Answer

A) $8,375 favorable 
B) $8,500 favorable 
C) $8,375 unfavorable 
D) $8,500 unfavorable 
A) $8,375 favorable 
B) $8,500 favorable 
C) $8,375 unfavorable 
D) $8,500 unfavorable

Question 14

Dozen Bakery makes cupcakes and cookies.Dozen gathered the following information for the current year regarding its use of flour and butter (flour is a direct material for cupcakes and butter is a direct material for cookies):
 
What is the direct material quantity variance for butter in the cookies?

Accepted Answer

A) $2,900 favorable 
B) $1,900 favorable 
C) $2,900 unfavorable 
D) $1,900 unfavorable 
A) $2,900 favorable 
B) $1,900 favorable 
C) $2,900 unfavorable 
D) $1,900 unfavorable

Question 15

The managerial accountant at Red Ribbon Distribution Company prepared a report in the previous quarter and reported 4,200 actual machine hours were used.The actual rate per machine hour was $32.75 while the standard rate was $28.50.The standard hours allowed was calculated at 4,000.Compute the variable manufacturing overhead (MOH)rate variance to determine the accuracy of the forecasted MOH and,the variable MOH efficiency variance,to determine whether the volume of output was consistent with the number of machine hours used.

Accepted Answer

$17,850U;$5,700U
Explanation: Explanatio

Question 16

The standard for the direct labor rate per hour does not include fringe benefits such as health care insurance and vacations.

Accepted Answer

A) True 
 B)False

Question 17

The ________ variance "measures whether the quantity of direct labor used to make the actual number of outputs is within the standard allowed for that number of outputs."

Accepted Answer

A) direct labor production volume 
B) direct labor overhead flexible budget 
C) direct labor rate 
D) direct labor efficiency 
A) direct labor production volume 
B) direct labor overhead flexible budget 
C) direct labor rate 
D) direct labor efficiency

Question 18

A(n)________ "arises because the number of units actually sold differs from the static budget units."

Accepted Answer

A) flexible budget 
B) sales volume variance 
C) benchmarking 
D) overhead flexible budget variance 
A) flexible budget 
B) sales volume variance 
C) benchmarking 
D) overhead flexible budget variance

Question 19

The direct materials flexible budget variance can be divided into which of the following two variances?

Accepted Answer

A) Price variance and the rate variance 
B) Price variance and the standard variance 
C) Price variance and the quantity variance 
D) Quantity variance and the efficiency variance 
A) Price variance and the rate variance 
B) Price variance and the standard variance 
C) Price variance and the quantity variance 
D) Quantity variance and the efficiency variance

Question 20

Nixon's Diner bakes pies in large batches.One batch of pies has the following standard costs and amounts:
   
Nixon's Diner baked 425 batches of pies in the most recent month.Actual costs and usage levels were as follows:
   
Required:
a.Calculate the material price variance.
b.Calculate the material quantity variance.
c.Calculate the labor rate variance.
d.Calculate the labor efficiency variance.

Accepted Answer

The answer of Nixon's Diner bakes pies in large batches.One...

Jennings Manufacturing gathered the following flexible budget information: How much is the total budgeted overhead cost at 90% of normal capacity?

A favorable direct labor efficiency variance and an unfavorable direct labor rate variance might indicate which of the following?

The ________ "shows how well management has controlled overhead costs."

Active Lifestyle Beverages gathered the following information for Job #928: What is the direct labor rate variance?

A favorable direct materials price variance and an unfavorable direct materials quantity variance might indicate which of the following?

A price variance for production inputs is the difference between the actual unit price of an input and the standard unit price of the input,multiplied by the actual input quantity.

How is the direct labor efficiency variance calculated?

The direct labor rate variance is calculated by multiplying the standard hours that should have been worked for the actual output by the difference between the standard labor rate and the actual labor rate.

Price and quantity variances are a way to motivate employees.

The variable overhead rate variance may be affected by both indirect labor and indirect materials.

The following information describes a company's usage of direct labor in a recent period: How much is the direct labor rate variance?

Dozen Bakery makes cupcakes and cookies.Dozen gathered the following information for the current year regarding its use of flour and butter (flour is a direct material for cupcakes and butter is a direct material for cookies): What is the direct material quantity variance for butter in the cookies?

The standard for the direct labor rate per hour does not include fringe benefits such as health care insurance and vacations.

The ________ variance "measures whether the quantity of direct labor used to make the actual number of outputs is within the standard allowed for that number of outputs."

A(n)________ "arises because the number of units actually sold differs from the static budget units."

The direct materials flexible budget variance can be divided into which of the following two variances?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters

Exam 11: Standard Costs and Variances

Jennings Manufacturing gathered the following flexible budget information: How much is the total budgeted overhead cost at 90% of normal capacity?

A favorable direct labor efficiency variance and an unfavorable direct labor rate variance might indicate which of the following?

The ________ "shows how well management has controlled overhead costs."

Active Lifestyle Beverages gathered the following information for Job #928: What is the direct labor rate variance?

A favorable direct materials price variance and an unfavorable direct materials quantity variance might indicate which of the following?

A price variance for production inputs is the difference between the actual unit price of an input and the standard unit price of the input,multiplied by the actual input quantity.

How is the direct labor efficiency variance calculated?

The direct labor rate variance is calculated by multiplying the standard hours that should have been worked for the actual output by the difference between the standard labor rate and the actual labor rate.

Price and quantity variances are a way to motivate employees.

The variable overhead rate variance may be affected by both indirect labor and indirect materials.

The following information describes a company's usage of direct labor in a recent period: How much is the direct labor rate variance?

Dozen Bakery makes cupcakes and cookies.Dozen gathered the following information for the current year regarding its use of flour and butter (flour is a direct material for cupcakes and butter is a direct material for cookies): What is the direct material quantity variance for butter in the cookies?

The standard for the direct labor rate per hour does not include fringe benefits such as health care insurance and vacations.

The ________ variance "measures whether the quantity of direct labor used to make the actual number of outputs is within the standard allowed for that number of outputs."

A(n)________ "arises because the number of units actually sold differs from the static budget units."

The direct materials flexible budget variance can be divided into which of the following two variances?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters