Question 1

The ________ "tells managers how much of the total direct materials variance is due to using more or less materials than anticipated the by standards."

Accepted Answer

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

Question 2

Channel One Industries uses a standard costing system to apply manufacturing costs to its production process.In May,Channel One anticipated producing 2,450 units with fixed manufacturing overhead costs allocated at $7.40 per direct labor hour with a standard of 1.5 direct labor hours per unit.In May,actual production was 3,200 units and actual fixed manufacturing overhead costs were $23,000.
What was Channel One's fixed manufacturing overhead volume variance in May?

Accepted Answer

A) $4,195 favorable 
B) $4,195 unfavorable 
C) $8,325 favorable 
D) $8,325 unfavorable 
A) $4,195 favorable 
B) $4,195 unfavorable 
C) $8,325 favorable 
D) $8,325 unfavorable

Question 3

What may cause a sales volume variance for fixed expenses?

Accepted Answer

A) Insurance costs on the factory rise unexpectedly during the year due to a crisis in the insurance industry. 
B) The union calls for a strike of factory workers and temporary workers are hired to fill in for the striking employees. 
C) The lease on the manufacturing facility is renegotiated and the lease payments increase during the year. 
D) The number of units actually sold falls within a different relevant range than the static budget sales volume. 
A) Insurance costs on the factory rise unexpectedly during the year due to a crisis in the insurance industry. 
B) The union calls for a strike of factory workers and temporary workers are hired to fill in for the striking employees. 
C) The lease on the manufacturing facility is renegotiated and the lease payments increase during the year. 
D) The number of units actually sold falls within a different relevant range than the static budget sales volume.

Question 4

Hushovd Iron Works has collected the following data for its Thunderbolt line of products:
 
What is the direct materials quantity variance?

Accepted Answer

A) $3,750 unfavorable 
B) $3,750 favorable 
C) $6,750 unfavorable 
D) $6,750 favorable 
A) $3,750 unfavorable 
B) $3,750 favorable 
C) $6,750 unfavorable 
D) $6,750 favorable

Question 5

Shamrock Manufacturing budgeted fixed overhead costs of $2.75 per unit at an anticipated production level of 1,350 units.In July Shamrock incurred actual fixed overhead costs of $4,400 and actually produced 1,300 units.
What is Shamrock's fixed overhead budget variance for July?

Accepted Answer

A) $687.50 favorable 
B) $687.50 unfavorable 
C) $825.00 favorable 
D) $825.00 unfavorable 
A) $687.50 favorable 
B) $687.50 unfavorable 
C) $825.00 favorable 
D) $825.00 unfavorable

Question 6

A sales volume variance will occur when the number of units actually sold differs from the volume originally planned for in the master budget.

Accepted Answer

A) True 
 B)False

Question 7

Rzepka Corporation manufactures jeweled cell phone cases.The following materials standards have been established for the jewels used to decorate the cell phone cases.
 
The following data relates to the production of the cell phone cases during June:
 
What is the materials price variance for jewels in June?

Accepted Answer

A) $100 favorable 
B) $100 unfavorable 
C) $4,200 favorable 
D) $4,200 unfavorable 
A) $100 favorable 
B) $100 unfavorable 
C) $4,200 favorable 
D) $4,200 unfavorable

Question 8

Circumstances can occur that result in favorable direct materials price variances and unfavorable direct materials quantity variances.

Accepted Answer

A) True 
 B)False

Question 9

Historic Restoration Company budgeted 2.5 hours of direct labor per unit at $14.75 per hour to produce 600 replica door knobs.The 600 knobs were completed using 1,200 hours of direct labor at $14.00 per hour.What is the direct labor rate variance?

Accepted Answer

A) $900 favorable 
B) $1,125 favorable 
C) $900 unfavorable 
D) $1,125 unfavorable 
A) $900 favorable 
B) $1,125 favorable 
C) $900 unfavorable 
D) $1,125 unfavorable

Question 10

When deciding whether or not to adopt standard costs and perform variance analysis,management should do which of the following?

Accepted Answer

A) Examine the costs and benefits of a standard costing system 
B) Update inaccurate standard costs 
C) Adopt lean thinking 
D) Increase automation of assembly lines 
A) Examine the costs and benefits of a standard costing system 
B) Update inaccurate standard costs 
C) Adopt lean thinking 
D) Increase automation of assembly lines

Question 11

The entry to allocate manufacturing overhead costs to production involves which of the following?

Accepted Answer

A) Debit to work in process inventory for the actual cost of overhead 
B) Credit to work in process inventory for the standard rate of overhead times the standard quantity of the allocation base allowed for actual output 
C) Credit to work in process inventory for the actual cost of overhead 
D) Debit to work in process inventory for the standard rate of overhead times the standard quantity of the allocation base allowed for actual output 
A) Debit to work in process inventory for the actual cost of overhead 
B) Credit to work in process inventory for the standard rate of overhead times the standard quantity of the allocation base allowed for actual output 
C) Credit to work in process inventory for the actual cost of overhead 
D) Debit to work in process inventory for the standard rate of overhead times the standard quantity of the allocation base allowed for actual output

Question 12

The standard cost of direct labor per hour is $12.50.One and one half standard direct labor hours are allowed per unit of finished goods.During the current period,560 units were produced using 1,250 direct labor hours.The direct labor rate variance is $1,000 unfavorable.Calculate the actual cost of direct labor per hour.

Accepted Answer

A) $12.50 
B) $32.80 
C) $13.30 
D) $18.75 
A) $12.50 
B) $32.80 
C) $13.30 
D) $18.75

Question 13

The following direct materials variance computations are incomplete.Fill in the missing values,and identify the direct materials flexible budget variance as favorable or unfavorable.
Direct materials price variance = ($? - $12.50)× 7,000 pounds = $3,500 U
Direct materials quantity variance = (? - 6,700 pounds)× $12.50 = ? U
Direct materials flexible budget variance = $?

Accepted Answer

The answer of The following direct materials variance computations are...

Question 14

What does the variable overhead efficiency variance tell management?

Accepted Answer

A) How efficiently variable manufacturing overhead was used 
B) How efficiently fixed manufacturing overhead was used 
C) How efficiently employees applied manufacturing overhead to each unit 
D) How much of the total variable manufacturing overhead variance is due to machine hours used given the actual volume of output 
A) How efficiently variable manufacturing overhead was used 
B) How efficiently fixed manufacturing overhead was used 
C) How efficiently employees applied manufacturing overhead to each unit 
D) How much of the total variable manufacturing overhead variance is due to machine hours used given the actual volume of output

Question 15

All variances discovered by management must be investigated.

Accepted Answer

A) True 
 B)False

Question 16

The ________ is the difference between the actual machine hours run and the standard machine hours allowed for the actual production volume.

Accepted Answer

A) production volume variance 
B) overhead flexible budget variance 
C) variable overhead efficiency variance 
D) both A and C 
A) production volume variance 
B) overhead flexible budget variance 
C) variable overhead efficiency variance 
D) both A and C

Question 17

Chemical Supply Incorporated budgeted two and one half hours of direct labor per unit at $11.75 per hour to produce 650 units of product.The 650 units were completed using 1,750 hours of direct labor at $12.50 per hour.What is the direct labor efficiency variance?

Accepted Answer

A) $1,469 unfavorable 
B) $1,469 favorable 
C) $1,563 unfavorable 
D) $1,563 favorable 
A) $1,469 unfavorable 
B) $1,469 favorable 
C) $1,563 unfavorable 
D) $1,563 favorable

Question 18

Yummy-Tummy Foods has the following information about its standards and production activity for November:  
Assume the allocation base for fixed overhead costs is the number of units to be produced.
How much are the standard overhead costs allocated to actual production?

Accepted Answer

A) $170,400 
B) $142,000 
C) $85,000 
D) $57,500 
A) $170,400 
B) $142,000 
C) $85,000 
D) $57,500

Question 19

Myles Company budgeted 10,500 pounds of direct materials costing $23.50 per pound to make 5,300 units of product.The company actually purchased 11,000 pounds of direct materials costing $25.00 per pound to make the 5,300 units.What is the direct materials quantity variance?

Accepted Answer

A) $12,500 favorable 
B) $11,750 favorable 
C) $11,750 unfavorable 
D) $12,500 unfavorable 
A) $12,500 favorable 
B) $11,750 favorable 
C) $11,750 unfavorable 
D) $12,500 unfavorable

Question 20

A standard cost for production inputs is a carefully predetermined cost that usually is expressed on a per-unit basis.

Accepted Answer

A) True 
 B)False

The ________ "tells managers how much of the total direct materials variance is due to using more or less materials than anticipated the by standards."

What may cause a sales volume variance for fixed expenses?

Hushovd Iron Works has collected the following data for its Thunderbolt line of products: What is the direct materials quantity variance?

Shamrock Manufacturing budgeted fixed overhead costs of $2.75 per unit at an anticipated production level of 1,350 units.In July Shamrock incurred actual fixed overhead costs of $4,400 and actually produced 1,300 units. What is Shamrock's fixed overhead budget variance for July?

A sales volume variance will occur when the number of units actually sold differs from the volume originally planned for in the master budget.

Circumstances can occur that result in favorable direct materials price variances and unfavorable direct materials quantity variances.

Historic Restoration Company budgeted 2.5 hours of direct labor per unit at $14.75 per hour to produce 600 replica door knobs.The 600 knobs were completed using 1,200 hours of direct labor at $14.00 per hour.What is the direct labor rate variance?

When deciding whether or not to adopt standard costs and perform variance analysis,management should do which of the following?

The entry to allocate manufacturing overhead costs to production involves which of the following?

What does the variable overhead efficiency variance tell management?

All variances discovered by management must be investigated.

The ________ is the difference between the actual machine hours run and the standard machine hours allowed for the actual production volume.

Chemical Supply Incorporated budgeted two and one half hours of direct labor per unit at $11.75 per hour to produce 650 units of product.The 650 units were completed using 1,750 hours of direct labor at $12.50 per hour.What is the direct labor efficiency variance?

Yummy-Tummy Foods has the following information about its standards and production activity for November: Assume the allocation base for fixed overhead costs is the number of units to be produced. How much are the standard overhead costs allocated to actual production?

Myles Company budgeted 10,500 pounds of direct materials costing $23.50 per pound to make 5,300 units of product.The company actually purchased 11,000 pounds of direct materials costing $25.00 per pound to make the 5,300 units.What is the direct materials quantity variance?

A standard cost for production inputs is a carefully predetermined cost that usually is expressed on a per-unit basis.

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

The ________ "tells managers how much of the total direct materials variance is due to using more or less materials than anticipated the by standards."

What may cause a sales volume variance for fixed expenses?

Hushovd Iron Works has collected the following data for its Thunderbolt line of products: What is the direct materials quantity variance?

Shamrock Manufacturing budgeted fixed overhead costs of $2.75 per unit at an anticipated production level of 1,350 units.In July Shamrock incurred actual fixed overhead costs of $4,400 and actually produced 1,300 units. What is Shamrock's fixed overhead budget variance for July?

A sales volume variance will occur when the number of units actually sold differs from the volume originally planned for in the master budget.

Circumstances can occur that result in favorable direct materials price variances and unfavorable direct materials quantity variances.

Historic Restoration Company budgeted 2.5 hours of direct labor per unit at $14.75 per hour to produce 600 replica door knobs.The 600 knobs were completed using 1,200 hours of direct labor at $14.00 per hour.What is the direct labor rate variance?

When deciding whether or not to adopt standard costs and perform variance analysis,management should do which of the following?

The entry to allocate manufacturing overhead costs to production involves which of the following?

What does the variable overhead efficiency variance tell management?

All variances discovered by management must be investigated.

The ________ is the difference between the actual machine hours run and the standard machine hours allowed for the actual production volume.

Chemical Supply Incorporated budgeted two and one half hours of direct labor per unit at $11.75 per hour to produce 650 units of product.The 650 units were completed using 1,750 hours of direct labor at $12.50 per hour.What is the direct labor efficiency variance?

Yummy-Tummy Foods has the following information about its standards and production activity for November: Assume the allocation base for fixed overhead costs is the number of units to be produced. How much are the standard overhead costs allocated to actual production?

Myles Company budgeted 10,500 pounds of direct materials costing $23.50 per pound to make 5,300 units of product.The company actually purchased 11,000 pounds of direct materials costing $25.00 per pound to make the 5,300 units.What is the direct materials quantity variance?

A standard cost for production inputs is a carefully predetermined cost that usually is expressed on a per-unit basis.

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