Question 1

The flexible budget variance for fixed overhead is known as the

Accepted Answer

A) static budget variance. 
B) fixed overhead efficiency variance. 
C) the fixed overhead volume variance. 
D) the fixed overhead spending variance. 
A) static budget variance. 
B) fixed overhead efficiency variance. 
C) the fixed overhead volume variance. 
D) the fixed overhead spending variance.

Question 2

If a company uses more direct labor hours than the standard allowed,the result is

Accepted Answer

A) an inflated prepaid salary account on the balance sheet. 
B) an unfavorable direct labor hour variance. 
C) a favorable efficiency variance. 
D) a reduction in operating income. 
A) an inflated prepaid salary account on the balance sheet. 
B) an unfavorable direct labor hour variance. 
C) a favorable efficiency variance. 
D) a reduction in operating income.

Question 3

The direct labor rate variance arises when

Accepted Answer

A) actual wage rates differ from the standard wage rate. 
B) actual hours worked differ from budgeted hours. 
C) standard wage rates do not match last year's rates. 
D) last year's actual hours worked do not match this year's hours worked. 
A) actual wage rates differ from the standard wage rate. 
B) actual hours worked differ from budgeted hours. 
C) standard wage rates do not match last year's rates. 
D) last year's actual hours worked do not match this year's hours worked.

Question 4

The variable overhead spending variance captures

Accepted Answer

A) whether the company has paid more or less for variable overhead items. 
B) the relative efficiency with which variable overhead items are used. 
C) whether a company is more or less efficient with respect to the production activity,since variable overhead varies with production activity. 
D) both whether the company has paid more or less for variable overhead items and the relative efficiency with which variable overhead items are used. 
A) whether the company has paid more or less for variable overhead items. 
B) the relative efficiency with which variable overhead items are used. 
C) whether a company is more or less efficient with respect to the production activity,since variable overhead varies with production activity. 
D) both whether the company has paid more or less for variable overhead items and the relative efficiency with which variable overhead items are used.

Question 5

Purchasing a higher quality of materials than is specified by the standard will likely result in

Accepted Answer

A) a favorable price variance. 
B) an unfavorable quantity variance. 
C) an unfavorable price variance. 
D) a favorable price variance and an unfavorable quantity variance. 
A) a favorable price variance. 
B) an unfavorable quantity variance. 
C) an unfavorable price variance. 
D) a favorable price variance and an unfavorable quantity variance.

Question 6

The variance that captures the effect of efficient use of the activity base on the cost of variable overhead is the

Accepted Answer

A) variable overhead spending variance. 
B) variable overhead efficiency variance. 
C) variable overhead volume variance. 
D) variable overhead rate variance. 
A) variable overhead spending variance. 
B) variable overhead efficiency variance. 
C) variable overhead volume variance. 
D) variable overhead rate variance.

Question 7

Assume the actual sales volume is 69,000

Accepted Answer

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

Question 8

Morgan's,Inc.has provided you with the following financial information:
   Required:
Prepare a static budget.

Accepted Answer

The answer of Morgan's,Inc.has provided you with the following financial...

Question 9

The standard number of direct labor hours used in calculating the direct labor efficiency variance is based on

Accepted Answer

A) the static budget. 
B) the actual number of finished units produced. 
C) the number of units on the production budget. 
D) the number of 
A) the static budget. 
B) the actual number of finished units produced. 
C) the number of units on the production budget. 
D) the number of

Question 10

When the budget being used is a static budget,the difference between actual results and budgeted results is referred to as "budget slack".

Accepted Answer

A) True 
 B)False

Question 11

The following labor standards have been set for a product:
   The following data pertain to operations for the period.
   Required
Calculate the direct labor rate and efficiency variances and indicate whether the variances are favorable or unfavorable.

Accepted Answer

Direct labor rate variance $12

Question 12

The algebraic equation for the direct labor rate variance is

Accepted Answer

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

Question 13

Jasmine Manufacturing produces the glass vases used by florists.Each vase requires 15 minutes of direct labor time for which glass blowers are paid $30 per hour.During November,Jasmine produced 10,000 glass vases which required 2,550 hours of direct labor.Jasmine paid wages to the glass blowers of $74,500 during November.What is Jasmine's direct labor efficiency variance for November?

Accepted Answer

A) $2,000 unfavorable 
B) $2,000 favorable 
C) $1,500 favorable 
D) $1,500 unfavorable 
A) $2,000 unfavorable 
B) $2,000 favorable 
C) $1,500 favorable 
D) $1,500 unfavorable

Question 14

The direct materials quantity variance is calculated using which of the three amounts?

Accepted Answer

A) Actual quantity used,standard quantity allowed for actual production,actual price paid 
B) Actual quantity used,standard quantity allowed for actual production,standard price paid 
C) Standard quantity used,actual price paid,standard price paid 
D) Actual quantity used,actual price paid,standard price paid 
A) Actual quantity used,standard quantity allowed for actual production,actual price paid 
B) Actual quantity used,standard quantity allowed for actual production,standard price paid 
C) Standard quantity used,actual price paid,standard price paid 
D) Actual quantity used,actual price paid,standard price paid

Question 15

Which of the following is not used in calculating the direct labor efficiency variance?

Accepted Answer

A) The actual quantity of direct labor hours used 
B) The standard quantity of direct labor hours allowed for actual production 
C) The actual wage rate 
D) The standard wage rate 
A) The actual quantity of direct labor hours used 
B) The standard quantity of direct labor hours allowed for actual production 
C) The actual wage rate 
D) The standard wage rate

Question 16

Which of the following is a method companies use to reduce their labor costs?

Accepted Answer

A) Paying overtime to get a job done in fewer days 
B) Offshoring 
C) Both paying overtime to get a job done in fewer days and offshoring. 
D) Neither paying overtime to get a job done in fewer days nor offshoring 
A) Paying overtime to get a job done in fewer days 
B) Offshoring 
C) Both paying overtime to get a job done in fewer days and offshoring. 
D) Neither paying overtime to get a job done in fewer days nor offshoring

Question 17

R&N Manufacturing produces music boxes.This year's budget was based on the production of 3,000 music boxes using a standard of 3 direct labor hours per music box and $4 variable overhead per direct labor hour.R&N incurred 9,200 hours to produce 2,950 music boxes.If actual variable overhead for the year is $32,000,what is R&N's variable overhead spending variance?

Accepted Answer

A) $4,000 favorable 
B) $4,000 unfavorable 
C) $4,800 favorable 
D) $4,800 unfavorable 
A) $4,000 favorable 
B) $4,000 unfavorable 
C) $4,800 favorable 
D) $4,800 unfavorable

Question 18

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 flexible budget variable overhead variance?

Accepted Answer

A) $27,000 unfavorable 
B) $19,000 favorable 
C) $4,000 unfavorable 
D) $23,000 unfavorable 
A) $27,000 unfavorable 
B) $19,000 favorable 
C) $4,000 unfavorable 
D) $23,000 unfavorable

Question 19

Which of the following variances would not be investigated by a manager following the management by exception principle?

Accepted Answer

A) A 10% favorable variance in raw materials price 
B) A 10% unfavorable variance in direct labor rates 
C) A 10% unfavorable variance in payroll tax expense 
D) An unfavorable variance that has increased by 5% in each of the last five months 
A) A 10% favorable variance in raw materials price 
B) A 10% unfavorable variance in direct labor rates 
C) A 10% unfavorable variance in payroll tax expense 
D) An unfavorable variance that has increased by 5% in each of the last five months

Question 20

Hobart Company manufactures patio umbrellas.The direct labor standard for each umbrella is 1.25 direct labor hours at a standard rate of $12.00 per hour.During June,Hobart used 36,000 direct labor hours to produce 30,000 umbrellas.Hobart's direct labor payroll totaled $428,400.What is Hobart's direct labor efficiency variance for November?

Accepted Answer

A) $3,600 unfavorable 
B) $3,600 favorable 
C) $18,000 favorable 
D) $18,000 unfavorable 
A) $3,600 unfavorable 
B) $3,600 favorable 
C) $18,000 favorable 
D) $18,000 unfavorable

The flexible budget variance for fixed overhead is known as the

If a company uses more direct labor hours than the standard allowed,the result is

The direct labor rate variance arises when

The variable overhead spending variance captures

Purchasing a higher quality of materials than is specified by the standard will likely result in

The variance that captures the effect of efficient use of the activity base on the cost of variable overhead is the

Assume the actual sales volume is 69,000

Morgan's,Inc.has provided you with the following financial information: Required: Prepare a static budget.

The standard number of direct labor hours used in calculating the direct labor efficiency variance is based on

When the budget being used is a static budget,the difference between actual results and budgeted results is referred to as "budget slack".

The following labor standards have been set for a product: The following data pertain to operations for the period. Required Calculate the direct labor rate and efficiency variances and indicate whether the variances are favorable or unfavorable.

The algebraic equation for the direct labor rate variance is

The direct materials quantity variance is calculated using which of the three amounts?

Which of the following is not used in calculating the direct labor efficiency variance?

Which of the following is a method companies use to reduce their labor costs?

Which of the following variances would not be investigated by a manager following the management by exception principle?

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

Exam 6: Performance Evaluation: Variance Analysis

The flexible budget variance for fixed overhead is known as the

If a company uses more direct labor hours than the standard allowed,the result is

The direct labor rate variance arises when

The variable overhead spending variance captures

Purchasing a higher quality of materials than is specified by the standard will likely result in

The variance that captures the effect of efficient use of the activity base on the cost of variable overhead is the

Assume the actual sales volume is 69,000

Morgan's,Inc.has provided you with the following financial information: Required: Prepare a static budget.

The standard number of direct labor hours used in calculating the direct labor efficiency variance is based on

When the budget being used is a static budget,the difference between actual results and budgeted results is referred to as "budget slack".

The following labor standards have been set for a product: The following data pertain to operations for the period. Required Calculate the direct labor rate and efficiency variances and indicate whether the variances are favorable or unfavorable.

The algebraic equation for the direct labor rate variance is

The direct materials quantity variance is calculated using which of the three amounts?

Which of the following is not used in calculating the direct labor efficiency variance?

Which of the following is a method companies use to reduce their labor costs?

Which of the following variances would not be investigated by a manager following the management by exception principle?

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