Exam 16: Topic Focus Standard Costing Systems

When using a standard costing system,the direct materials quantity variance is recorded at the time direct materials are transferred to the production floor.

When using a standard costing system,which of the following should be recorded when recording the purchase of direct materials?

Using a normal costing system,direct materials and direct labor are recorded at actual cost,and overhead is applied to products using a predetermined overhead rate.

The easiest approach to close variances accounts is to the Raw Materials Inventory account.

A costing system where all product costs are recorded at standard cost while the products are being made is referred to as

An advantage of standard costing is that it gives visibility to the variances that arise in the production process.

Wolfe Manufacturing Company has the following direct labor standards: Required: a. Calculate the direct labor rate variance. b. Calculate the direct labor efficiency variance.

Answer the following questions regarding costing systems. a. What is the difference between a normal costing system and a standard costing system? b. What adjustments are required at the end of each period for each? c. What is an advantage of standard costing? d. Are inventory and costs of goods sold accounts reported on financial statements at actual cost or standard cost?

Haven Industries purchased 1,000 units of product at a cost of $1.20 per unit. Haven’s standard price per unit was set at $1.10. Which of the following is the correct journal entry to record the purchase?

Wolfe Manufacturing Company’s standards are set at one gallon of liquid for each unit of production at a cost of $2.10 per gallon. Actual production was 50,000 units using 45,000 gallons of liquid at a cost of $2.20 per gallon. Required: a. Calculate the direct material price variance. b. Calculate the direct material quantity variance.

Suggest one reason for each of the following variances. a.Unfavorable direct material quantity variance b.Favorable direct labor rate variance c.Favorable variable overhead spending variance d.Unfavorable fixed overhead volume variance

When using a normal costing system

Wolfe Manufacturing Company has the following information related to variable overhead: a.Calculate the variable overhead spending variance for the period. b.Calculate the variable overhead efficiency variance for the period.

When using a standard costing system,the direct materials price variance is recorded at the time direct materials are purchased.

When using a standard costing system,which of the following statements is true?

Haven Industries transferred 5,500 units of raw material into production to produce 2,500 units. The standard quantity of raw material required for each unit is 2 and the standard cost is $1.20 per unit. Which of the following is the correct journal entry to record the transfer?

When using a standard costing system,which of the following should be recorded to transfer

The standard cost of labor consists of two components: standard quantity of direct labor hours allowed for actual production and standard direct labor rate per hour.

When using a normal costing system,only over- or under-applied overhead cost needs to be adjusted to the actual overhead cost.

When using a standard costing system,which of the following should be recorded when finished goods are sold?