Question 1

The variable overhead rate variance is also known as which of the following?

Accepted Answer

A) Variable overhead efficiency variance 
B) Variable overhead usage variance 
C) Variable overhead spending variance 
D) Variable overhead price variance 
A) Variable overhead efficiency variance 
B) Variable overhead usage variance 
C) Variable overhead spending variance 
D) Variable overhead price variance

Question 2

Buckley Manufacturing reported the following budgeted and actual figures for one of its products:   Given this data, what is the total variable overhead variance for this product?

Accepted Answer

A) $4150 favorable 
B) $4150 unfavorable 
C) $3300 favorable 
D) $3300 unfavorable 
A) $4150 favorable 
B) $4150 unfavorable 
C) $3300 favorable 
D) $3300 unfavorable

Question 3

Perry Company gathered the following actual results for the current month: Actual amounts:
  Budgeted production and standard costs were:
  What is the direct labor rate variance?

Accepted Answer

A) $83,520 unfavorable 
B) $83,520 favorable 
C) $19,224 unfavorable 
D) $19,224 favorable 
A) $83,520 unfavorable 
B) $83,520 favorable 
C) $19,224 unfavorable 
D) $19,224 favorable

Question 4

The managerial accountant at Sailboat World compiles a monthly overhead variance report. The company produced 30,584 sailboats in the past month at 0.28 machine hours per unit. The budgeted fixed overhead cost was $95,000 whereas actual fixed overhead cost was $96,400. Calculate the standard fixed overhead cost allocated to production at $11 per machine-hour. Compute the fixed overhead volume variance and the fixed overhead budget variance.

Accepted Answer

$94,198.72

Question 5

Fitness Bands Corporation gathered the following information for Job #928:   What is the direct labor efficiency variance?

Accepted Answer

A) $2750 favorable 
B) $2750 unfavorable 
C) $3500 favorable 
D) $3500 unfavorable 
A) $2750 favorable 
B) $2750 unfavorable 
C) $3500 favorable 
D) $3500 unfavorable

Question 6

What type of variance results when the actual fixed overhead costs incurred are greater than the budgeted fixed overhead costs?

Accepted Answer

A) Favorable fixed overhead budget variance 
B) Unfavorable fixed overhead budget variance 
C) Favorable fixed overhead volume variance 
D) Unfavorable fixed overhead volume variance 
A) Favorable fixed overhead budget variance 
B) Unfavorable fixed overhead budget variance 
C) Favorable fixed overhead volume variance 
D) Unfavorable fixed overhead volume variance

Question 7

The direct labor variance can be divided into two variances

Accepted Answer

A) rate variance and price variance. 
B) price variance and usage variance. 
C) rate variance and efficiency variance. 
D) price variance and efficiency variance. 
A) rate variance and price variance. 
B) price variance and usage variance. 
C) rate variance and efficiency variance. 
D) price variance and efficiency variance.

Question 8

The two fixed overhead variances are the

Accepted Answer

A) budget and volume variances. 
B) rate and efficiency variances. 
C) price and usage variances. 
D) rate and volume variances. 
A) budget and volume variances. 
B) rate and efficiency variances. 
C) price and usage variances. 
D) rate and volume variances.

Question 9

Oliver Enterprises has collected the following data for one of its products:   What is the total actual cost of the direct materials used?

Accepted Answer

A) $57,720 
B) $23,440 
C) $51,440 
D) $37,440 
A) $57,720 
B) $23,440 
C) $51,440 
D) $37,440

Question 10

The fixed overhead budget variance measures the difference between the actual fixed overhead costs incurred and the budgeted fixed overhead costs.

Accepted Answer

A) True 
 B)False

Question 11

Tiara Industries has the following information about its standards and production activity for December: Actual manufacturing overhead cost incurred, $90,000
Variable manufacturing overhead cost @ $5.00 per unit produced
Fixed manufacturing overhead cost @ $3.00 per unit produced
($51,000/17,000 budgeted units)
Actual units produced, 5200
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) $85,000 
B) $90,000 
C) $136,000 
D) $41,600 
A) $85,000 
B) $90,000 
C) $136,000 
D) $41,600

Question 12

The ________ department is most likely responsible to incur a "direct material price variance."

Accepted Answer

A) production 
B) marketing 
C) personnel 
D) purchasing 
A) production 
B) marketing 
C) personnel 
D) purchasing

Question 13

The direct materials price variance tells managers how much of the total variance is due to paying higher or lower prices than expected for the direct materials purchased.

Accepted Answer

A) True 
 B)False

Question 14

The Dogwood Technology Company managerial accountant computes the May total variance report. The budgeted fixed overhead was $46,140 and the standard fixed overhead cost allocated to production was $45,910. The actual fixed overhead totaled $45,490. Compute the fixed overhead budget variance and the fixed overhead volume variance.

Accepted Answer

A) $880 U; $420 F 
B) $650 F; $230 U 
C) $420 U; $880 F 
D) $230 F; $650 U 
A) $880 U; $420 F 
B) $650 F; $230 U 
C) $420 U; $880 F 
D) $230 F; $650 U

Question 15

How is the fixed overhead volume variance calculated?

Accepted Answer

A) The difference between the standard fixed overhead rate and the actual fixed overhead rate multiplied by the actual hours used 
B) The difference between the standard fixed overhead costs allocated to production and the budgeted fixed overhead costs 
C) The difference between the actual fixed overhead costs incurred and the budgeted fixed overhead costs 
D) The difference between the actual fixed overhead costs incurred and the standard fixed overhead costs allocated 
A) The difference between the standard fixed overhead rate and the actual fixed overhead rate multiplied by the actual hours used 
B) The difference between the standard fixed overhead costs allocated to production and the budgeted fixed overhead costs 
C) The difference between the actual fixed overhead costs incurred and the budgeted fixed overhead costs 
D) The difference between the actual fixed overhead costs incurred and the standard fixed overhead costs allocated

Question 16

The type of standard that expects no waste and no inefficiencies in the production process is referred to as a(n)

Accepted Answer

A) ideal standard. 
B) efficiency standard. 
C) realistic standard. 
D) practical standard. 
A) ideal standard. 
B) efficiency standard. 
C) realistic standard. 
D) practical standard.

Question 17

Disadvantages of using standard costs and variances include all of the following except

Accepted Answer

A) the excessive cost to keep standards up-to-date. 
B) companies that pay employees a salary because direct labor is a fixed cost rather than a variable cost. 
C) those manufacturing costs that enter Work in Process Inventory are recorded at standard cost, rather than actual cost. 
D) traditional standards can promote unfavorable employee behavior. 
A) the excessive cost to keep standards up-to-date. 
B) companies that pay employees a salary because direct labor is a fixed cost rather than a variable cost. 
C) those manufacturing costs that enter Work in Process Inventory are recorded at standard cost, rather than actual cost. 
D) traditional standards can promote unfavorable employee behavior.

Question 18

Ideal standards allow for a normal amount of waste and inefficiency.

Accepted Answer

A) True 
 B)False

Question 19

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 20

The variable overhead efficiency variance tells management how efficiently manufacturing overhead was used during the period.

Accepted Answer

A) True 
 B)False

The variable overhead rate variance is also known as which of the following?

Buckley Manufacturing reported the following budgeted and actual figures for one of its products: Given this data, what is the total variable overhead variance for this product?

Perry Company gathered the following actual results for the current month: Actual amounts: Budgeted production and standard costs were: What is the direct labor rate variance?

Fitness Bands Corporation gathered the following information for Job #928: What is the direct labor efficiency variance?

What type of variance results when the actual fixed overhead costs incurred are greater than the budgeted fixed overhead costs?

The direct labor variance can be divided into two variances

The two fixed overhead variances are the

Oliver Enterprises has collected the following data for one of its products: What is the total actual cost of the direct materials used?

The fixed overhead budget variance measures the difference between the actual fixed overhead costs incurred and the budgeted fixed overhead costs.

The ________ department is most likely responsible to incur a "direct material price variance."

The direct materials price variance tells managers how much of the total variance is due to paying higher or lower prices than expected for the direct materials purchased.

How is the fixed overhead volume variance calculated?

The type of standard that expects no waste and no inefficiencies in the production process is referred to as a(n)

Disadvantages of using standard costs and variances include all of the following except

Ideal standards allow for a normal amount of waste and inefficiency.

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.

The variable overhead efficiency variance tells management how efficiently manufacturing overhead was used during the period.

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 Evalulation

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 variable overhead rate variance is also known as which of the following?

Buckley Manufacturing reported the following budgeted and actual figures for one of its products: Given this data, what is the total variable overhead variance for this product?

Perry Company gathered the following actual results for the current month: Actual amounts: Budgeted production and standard costs were: What is the direct labor rate variance?

Fitness Bands Corporation gathered the following information for Job #928: What is the direct labor efficiency variance?

What type of variance results when the actual fixed overhead costs incurred are greater than the budgeted fixed overhead costs?

The direct labor variance can be divided into two variances

The two fixed overhead variances are the

Oliver Enterprises has collected the following data for one of its products: What is the total actual cost of the direct materials used?

The fixed overhead budget variance measures the difference between the actual fixed overhead costs incurred and the budgeted fixed overhead costs.

The ________ department is most likely responsible to incur a "direct material price variance."

The direct materials price variance tells managers how much of the total variance is due to paying higher or lower prices than expected for the direct materials purchased.

How is the fixed overhead volume variance calculated?

The type of standard that expects no waste and no inefficiencies in the production process is referred to as a(n)

Disadvantages of using standard costs and variances include all of the following except

Ideal standards allow for a normal amount of waste and inefficiency.

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.

The variable overhead efficiency variance tells management how efficiently manufacturing overhead was used during the period.

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 Evalulation

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters