Question 1

Assembly line workers at Thompson Manufacturing worked a total of 12,000 direct labor hours to produce 36,000

Accepted Answer

A) $6,000 favorable 
B) $6,000 unfavorable 
C) $4,500 favorable 
D) $4,500 unfavorable 
A) $6,000 favorable 
B) $6,000 unfavorable 
C) $4,500 favorable 
D) $4,500 unfavorable

Question 2

Adobe Company produces electric lawn mowers suitable for home and industrial use.During the year Adobe produced 54,000 mowers,using 163,000 direct labor hours.Adobe's fixed overhead rate is $12 per direct labor hour and the company budgeted 166,500 direct labor hours.Actual fixed overhead for the year was $1,996,000.What is Adobe's fixed overhead spending variance?

Accepted Answer

A) $2,000 unfavorable 
B) $2,000 favorable 
C) $40,000 favorable 
D) $42,000 favorable 
A) $2,000 unfavorable 
B) $2,000 favorable 
C) $40,000 favorable 
D) $42,000 favorable

Question 3

The algebraic equation for the direct labor efficiency variance is

Accepted Answer

A) direct labor efficiency variance = AQ x AP - SP. 
B) direct labor efficiency variance = SQ x AP - SP. 
C) direct labor efficiency variance = SP x AQ - SQ. 
D) direct labor efficiency variance = AP x AQ - SQ. 
A) direct labor efficiency variance = AQ x AP - SP. 
B) direct labor efficiency variance = SQ x AP - SP. 
C) direct labor efficiency variance = SP x AQ - SQ. 
D) direct labor efficiency variance = AP x AQ - SQ.

Question 4

Which of the following is a factor in the amount of material used in production,resulting in a direct materials quantity variance?

Accepted Answer

A) The quality of the material. 
B) The skill level of the production workers. 
C) The supervision provided by the production manager. 
D) All of these answer choices are correct. 
A) The quality of the material. 
B) The skill level of the production workers. 
C) The supervision provided by the production manager. 
D) All of these answer choices are correct.

Question 5

Thrope,Inc.purchased 1,700 pounds of direct material at a price of $1.20 per pound.The standard price of the material is $1.30 per pound.Thrope used 1,500 pounds in production while the standard pounds allowed for actual production was 1,300.
Required:
Calculate the direct materials price and quantity variances and indicate whether the variances are favorable or unfavorable.

Accepted Answer

Direct material price variance

Question 6

The sales volume variance is the difference between

Accepted Answer

A) the static budget and the flexible budget. 
B) the flexible budget and actual results. 
C) the actual quantity and budgeted quantity. 
D) the actual price and the standard price. 
A) the static budget and the flexible budget. 
B) the flexible budget and actual results. 
C) the actual quantity and budgeted quantity. 
D) the actual price and the standard price.

Question 7

The flexible budget variance for direct labor is separated into two components: a direct labor rate variance and a direct labor quantity variance.

Accepted Answer

A) True 
 B)False

Question 8

The variable overhead efficiency variance is calculated as

Accepted Answer

A) actual cost - actual quantity x standard price. 
B) actual cost - standard quantity x standard price. 
C) standard price x actual quantity x standard quantity. 
D) actual results minus flexible budget amount. 
A) actual cost - actual quantity x standard price. 
B) actual cost - standard quantity x standard price. 
C) standard price x actual quantity x standard quantity. 
D) actual results minus flexible budget amount.

Question 9

The direct labor flexible budget variance is due to

Accepted Answer

A) what the company pays for labor and how efficiently employees work. 
B) what the company pays for labor and how management allocates the labor rate. 
C) how efficiently employees work and how management allocates the workers to products. 
D) what the company pays for labor but not how efficiently employees work. 
A) what the company pays for labor and how efficiently employees work. 
B) what the company pays for labor and how management allocates the labor rate. 
C) how efficiently employees work and how management allocates the workers to products. 
D) what the company pays for labor but not how efficiently employees work.

Question 10

The variable overhead spending variance is the difference between the actual cost of variable overhead items and the amount of variable overhead cost that is expected to be incurred at the budgeted level of activity base experienced.

Accepted Answer

A) True 
 B)False

Question 11

Investigating the cause of a variance is a part of a manager's responsibility under which of the following management functions?

Accepted Answer

A) Planning 
B) Controlling 
C) Evaluating 
D) Decision-making 
A) Planning 
B) Controlling 
C) Evaluating 
D) Decision-making

Question 12

The direct materials quantity variance is based on the amount of materials

Accepted Answer

A) purchased. 
B) on hand. 
C) used. 
D) budgeted. 
A) purchased. 
B) on hand. 
C) used. 
D) budgeted.

Question 13

Culver,Inc.manufactures motors used in electric toothbrushes and other small appliances.Culver's fixed overhead rate is $7.60 and the company budgeted 165,000 direct labor hours for the year.During the year Culver produced 320,000 motors and used 164,000 direct labor hours.Culver's fixed overhead spending variance was $3,500 unfavorable for the year.What was Culver's actual fixed overhead for the year?

Accepted Answer

A) $1,250,500 
B) $1,257,500 
C) $1,246,400 
D) $1,249,900 
A) $1,250,500 
B) $1,257,500 
C) $1,246,400 
D) $1,249,900

Question 14

Employee theft of direct materials is likely to result in an

Accepted Answer

A) unfavorable materials quantity variance. 
B) unfavorable materials price variance. 
C) favorable materials quantity variance. 
D) favorable materials price variance. 
A) unfavorable materials quantity variance. 
B) unfavorable materials price variance. 
C) favorable materials quantity variance. 
D) favorable materials price variance.

Question 15

Which of the following is not a reason wage rates may vary from the standard?

Accepted Answer

A) To get a job done on time,a manager may need to use more highly skilled,higher-paid workers than prescribed by the standard. 
B) If a manger must pay overtime to meet production requirements,a direct labor rate variance will likely result. 
C) At the time standards are set,managers generally do not have a good idea of the wage rates they will need to pay. 
D) At the time standards are set,managers generally know the actual wage rates they will need to pay. 
A) To get a job done on time,a manager may need to use more highly skilled,higher-paid workers than prescribed by the standard. 
B) If a manger must pay overtime to meet production requirements,a direct labor rate variance will likely result. 
C) At the time standards are set,managers generally do not have a good idea of the wage rates they will need to pay. 
D) At the time standards are set,managers generally know the actual wage rates they will need to pay.

Question 16

The fixed overhead spending variance is the difference between actual fixed overhead cost and budgeted fixed overhead cost.

Accepted Answer

A) True 
 B)False

Question 17

Melrose Manufacturing produces gourmet blackberry preserves.Melrose based its current year budget on a production level of 540,000 jars of preserves using ½ hour direct labor time for each jar which includes hand-sorting and trimming the berries.Total budgeted variable overhead for the year was $1,242,000.During the year,Melrose used 280,000 direct labor hours to produce 550,000 jars of blackberry preserves.Actual variable overhead for the year was $1,246,000.What is Melrose's variable overhead spending variance?

Accepted Answer

A) $42,000 favorable 
B) $42,000 unfavorable 
C) $23,000 favorable 
D) $23,000 unfavorable 
A) $42,000 favorable 
B) $42,000 unfavorable 
C) $23,000 favorable 
D) $23,000 unfavorable

Question 18

The sales volume variance reflects

Accepted Answer

A) how efficiently the company operated in producing a given level of sales. 
B) how effectively the company reached its strategic goals. 
C) a different volume of products than that specified in the static budget. 
D) only favorable variances. 
A) how efficiently the company operated in producing a given level of sales. 
B) how effectively the company reached its strategic goals. 
C) a different volume of products than that specified in the static budget. 
D) only favorable variances.

Assembly line workers at Thompson Manufacturing worked a total of 12,000 direct labor hours to produce 36,000

The algebraic equation for the direct labor efficiency variance is

Which of the following is a factor in the amount of material used in production,resulting in a direct materials quantity variance?

The sales volume variance is the difference between

The flexible budget variance for direct labor is separated into two components: a direct labor rate variance and a direct labor quantity variance.

The variable overhead efficiency variance is calculated as

The direct labor flexible budget variance is due to

The variable overhead spending variance is the difference between the actual cost of variable overhead items and the amount of variable overhead cost that is expected to be incurred at the budgeted level of activity base experienced.

Investigating the cause of a variance is a part of a manager's responsibility under which of the following management functions?

The direct materials quantity variance is based on the amount of materials

Employee theft of direct materials is likely to result in an

Which of the following is not a reason wage rates may vary from the standard?

The fixed overhead spending variance is the difference between actual fixed overhead cost and budgeted fixed overhead cost.

The sales volume variance reflects

Accounting As a Tool for Management

Cost Behavior and Cost Estimation

Cost-Volume-Profit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting

Activity-Based Costing and Activity Based Management

Using Accounting Information to Make Managerial Decisions

Capital Budgeting

Decentralizing and Performance Evaluation

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

Statement of Cash Flows

Topic Focus: Process Costing

Topic Focus Variable and Absorption Costing

Topic Focus Standard Costing Systems

Topic Focus Customer Profitability

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Exam 6: Performance Evaluation: Variance Analysis

Assembly line workers at Thompson Manufacturing worked a total of 12,000 direct labor hours to produce 36,000

The algebraic equation for the direct labor efficiency variance is

Which of the following is a factor in the amount of material used in production,resulting in a direct materials quantity variance?

The sales volume variance is the difference between

The flexible budget variance for direct labor is separated into two components: a direct labor rate variance and a direct labor quantity variance.

The variable overhead efficiency variance is calculated as

The direct labor flexible budget variance is due to

The variable overhead spending variance is the difference between the actual cost of variable overhead items and the amount of variable overhead cost that is expected to be incurred at the budgeted level of activity base experienced.

Investigating the cause of a variance is a part of a manager's responsibility under which of the following management functions?

The direct materials quantity variance is based on the amount of materials

Employee theft of direct materials is likely to result in an

Which of the following is not a reason wage rates may vary from the standard?

The fixed overhead spending variance is the difference between actual fixed overhead cost and budgeted fixed overhead cost.

The sales volume variance reflects

Accounting As a Tool for Management

Cost Behavior and Cost Estimation

Cost-Volume-Profit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting

Activity-Based Costing and Activity Based Management

Using Accounting Information to Make Managerial Decisions

Capital Budgeting

Decentralizing and Performance Evaluation

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

Statement of Cash Flows

Topic Focus: Process Costing

Topic Focus Variable and Absorption Costing

Topic Focus Standard Costing Systems

Topic Focus Customer Profitability

Filters