Question 1

A variance that is considered immaterial should be closed to the cost of goods sold account.

Accepted Answer

A) True 
 B)False

Question 2

In a traditional manufacturing accounting system, the standard cost of a unit of output is the sum of the standard costs of

Accepted Answer

A)  Direct material, direct labor, and variable overhead 
B)  Direct material, direct labor, and fixed overhead 
C)  Direct material, direct labor, and period costs 
D)  Direct material, direct labor, variable overhead, and fixed overhead 
A)  Direct material, direct labor, and variable overhead 
B)  Direct material, direct labor, and fixed overhead 
C)  Direct material, direct labor, and period costs 
D)  Direct material, direct labor, variable overhead, and fixed overhead

Question 3

The process of calculating variances and analysing the reasons they occurred is called

Accepted Answer

A)  Variance analysis 
B)  Budget analysis 
C)  Historical analysis 
D)  Activity-based analysis 
A)  Variance analysis 
B)  Budget analysis 
C)  Historical analysis 
D)  Activity-based analysis

Question 4

Expected costs per unit of input are called

Accepted Answer

A)  Standard prices 
B)  Standard costs 
C)  Standard quantities 
D)  Standard ideals 
A)  Standard prices 
B)  Standard costs 
C)  Standard quantities 
D)  Standard ideals

Question 5

Welch Company budgeted the following cost standards for the current year: Direct materials = 1.40 kilos per unit @ $1.50 per kilo
Direct labor = 0.75 hours per unit @ $6 per hour
Actual production and costs were as follows:
Units produced = 2,800
Direct materials used = 4,500 kg.
Direct materials purchased = 5,000 kg. @ a cost of $5,850
Direct labor incurred = 2,000 hours at a cost of $13,000
The material efficiency variance was

Accepted Answer

A)  $1,650 F 
B)  $870 U 
C)  $2,520 U 
D)  $780 F 
A)  $1,650 F 
B)  $870 U 
C)  $2,520 U 
D)  $780 F

Question 6

Hogle Manufacturing uses a standard costing system. The standard time to produce one unit is 4 hours, and normal production is 3,000 units monthly. Overhead costs were estimated to be $135,000. The standard variable overhead rate is $5 per machine hour. During April the following results were recorded:   The combined fixed and variable overhead spending variance was

Accepted Answer

A)  $1,000 U 
B)  $2,000 F 
C)  $7,000 U 
D)  $3,000 F 
A)  $1,000 U 
B)  $2,000 F 
C)  $7,000 U 
D)  $3,000 F

Question 7

A standard cost variance is the difference between a standard cost and an actual cost.

Accepted Answer

A) True 
 B)False

Question 8

Hyteck Ltd is a capital intensive firm. Indirect costs make up nearly 70% of the product costs. The company has no direct material costs because customers provide the direct materials used for each job. To plan and control such costs, the firm employs flexible budgets and standard costs. Overhead rates, based on direct labor hours, are derived from the master budget. The direct labor efficiency variance was

Accepted Answer

A)  $2,000 F 
B)  $2,800 U 
C)  $1,000 U 
D)  $1,000 F 
A)  $2,000 F 
B)  $2,800 U 
C)  $1,000 U 
D)  $1,000 F

Question 9

During the period Richeleau produced 1,000 units of product. The flexible budget for standard costs is: The total under- or overapplied overhead for the period was

Accepted Answer

A)  $400 overapplied 
B)  $500 underapplied 
C)  $900 overapplied 
D)  $100 underapplied 
A)  $400 overapplied 
B)  $500 underapplied 
C)  $900 overapplied 
D)  $100 underapplied

Question 10

The production volume variance provides information about

Accepted Answer

A)  Capacity utilisation 
B)  Variable overhead costs which vary with volume 
C)  Fixed overhead costs which vary with volume 
D)  Sales levels 
A)  Capacity utilisation 
B)  Variable overhead costs which vary with volume 
C)  Fixed overhead costs which vary with volume 
D)  Sales levels

Question 11

Identifying the reasons for variances is usually a quick and easy process.

Accepted Answer

A) True 
 B)False

Question 12

Unattainable standards are likely to lead to

Accepted Answer

A)  I only 
B)  II only 
C)  III only 
D)  I and III only 
A)  I only 
B)  II only 
C)  III only 
D)  I and III only

Question 13

Hogle Manufacturing uses a standard costing system. The standard time to produce one unit is 4 hours, and normal production is 3,000 units monthly. Overhead costs were estimated to be $135,000. The standard variable overhead rate is $5 per machine hour. During April the following results were recorded:   The variable overhead efficiency variance was

Accepted Answer

A)  $8,000 U 
B)  $4,000U 
C)  $2,000 U 
D)  $4,000 F 
A)  $8,000 U 
B)  $4,000U 
C)  $2,000 U 
D)  $4,000 F

Question 14

Theft of raw materials is most likely to lead to

Accepted Answer

A)  Direct materials price variance 
B)  Favorable direct materials price variance 
C)  Unfavorable direct materials efficiency variance 
D)  Favorable direct materials efficiency variance 
A)  Direct materials price variance 
B)  Favorable direct materials price variance 
C)  Unfavorable direct materials efficiency variance 
D)  Favorable direct materials efficiency variance

Question 15

Hogle Manufacturing uses a standard costing system. The standard time to produce one unit is 4 hours, and normal production is 3,000 units monthly. Overhead costs were estimated to be $135,000. The standard variable overhead rate is $5 per machine hour. During April the following results were recorded:   The fixed overhead production volume variance was

Accepted Answer

A)  $1,000 U 
B)  $2,500 F 
C)  $1,500 F 
D)  $5,000 U 
A)  $1,000 U 
B)  $2,500 F 
C)  $1,500 F 
D)  $5,000 U

Question 16

Given the following account balances at the end of the first year of operations:   Assuming that variances are considered material, the entry and amount of the direct material efficiency variance allocated to work in process inventory is

Accepted Answer

A)  Credit $26,000 
B)  Credit $24,375 
C)  Debit $17,333 
D)  Debit $8,125 
A)  Credit $26,000 
B)  Credit $24,375 
C)  Debit $17,333 
D)  Debit $8,125

Question 17

Welch Company budgeted the following cost standards for the current year: Direct materials = 1.40 kilos per unit @ $1.50 per kilo
Direct labor = 0.75 hours per unit @ $6 per hour
Actual production and costs were as follows:
Units produced = 2,800
Direct materials used = 4,500 kg.
Direct materials purchased = 5,000 kg. @ a cost of $5,850
Direct labor incurred = 2,000 hours at a cost of $13,000
The labor price variance was

Accepted Answer

A)  $600 F 
B)  $400 U 
C)  $4,800 F 
D)  $1,000 U 
A)  $600 F 
B)  $400 U 
C)  $4,800 F 
D)  $1,000 U

Question 18

Hyteck Ltd is a capital intensive firm. Indirect costs make up nearly 70% of the product costs. The company has no direct material costs because customers provide the direct materials used for each job. To plan and control such costs, the firm employs flexible budgets and standard costs. Overhead rates, based on direct labor hours, are derived from the master budget. The variable overhead spending variance was

Accepted Answer

A)  $1,200 F 
B)  $2,000 F 
C)  $2,800 U 
D)  $1,600 U 
A)  $1,200 F 
B)  $2,000 F 
C)  $2,800 U 
D)  $1,600 U

Question 19

The direct materials efficiency variance tells managers about the efficiency of the purchasing process.

Accepted Answer

A) True 
 B)False

Question 20

Standard costing allows management to

Accepted Answer

A)  I and II only 
B)  I and III only 
C)  II and III only 
D)  I, II, and III 
A)  I and II only 
B)  I and III only 
C)  II and III only 
D)  I, II, and III

A variance that is considered immaterial should be closed to the cost of goods sold account.

In a traditional manufacturing accounting system, the standard cost of a unit of output is the sum of the standard costs of

The process of calculating variances and analysing the reasons they occurred is called

Expected costs per unit of input are called

A standard cost variance is the difference between a standard cost and an actual cost.

During the period Richeleau produced 1,000 units of product. The flexible budget for standard costs is: The total under- or overapplied overhead for the period was

The production volume variance provides information about

Identifying the reasons for variances is usually a quick and easy process.

Unattainable standards are likely to lead to

Theft of raw materials is most likely to lead to

Given the following account balances at the end of the first year of operations: Assuming that variances are considered material, the entry and amount of the direct material efficiency variance allocated to work in process inventory is

The direct materials efficiency variance tells managers about the efficiency of the purchasing process.

Standard costing allows management to

The Role of Accounting Information in Management Decision Making

Cost Concepts, Behaviour and Estimation

A Costing Framework and Cost Allocation

Cost-Volume-Profit Cvp Analysis

Job Costing Systems

Process Costing Systems

Absorption, Variable and Throughput Costing

Activity Analysis: Costing and Management

Relevant Costs for Decision Making

Operational Budgets

Strategy and Control

Planning and Budgeting for Strategic Success

Capital Budgeting and Strategic Investment Decisions

The Strategic Management of Costs and Revenues

Strategic Management Control: a Lean Perspective

Responsibility Accounting, Performance Evaluation and Transfer Pricing

The Balanced Scorecard and Strategy Maps

Rewards, Incentives and Risk Management

Sustainability Management Accounting

Filters

Exam 10: Standard Costs, Flexible Budgets and Variance Analysis

A variance that is considered immaterial should be closed to the cost of goods sold account.

In a traditional manufacturing accounting system, the standard cost of a unit of output is the sum of the standard costs of

The process of calculating variances and analysing the reasons they occurred is called

Expected costs per unit of input are called

A standard cost variance is the difference between a standard cost and an actual cost.

During the period Richeleau produced 1,000 units of product. The flexible budget for standard costs is: The total under- or overapplied overhead for the period was

The production volume variance provides information about

Identifying the reasons for variances is usually a quick and easy process.

Unattainable standards are likely to lead to

Theft of raw materials is most likely to lead to

Given the following account balances at the end of the first year of operations: Assuming that variances are considered material, the entry and amount of the direct material efficiency variance allocated to work in process inventory is

The direct materials efficiency variance tells managers about the efficiency of the purchasing process.

Standard costing allows management to

The Role of Accounting Information in Management Decision Making

Cost Concepts, Behaviour and Estimation

A Costing Framework and Cost Allocation

Cost-Volume-Profit Cvp Analysis

Job Costing Systems

Process Costing Systems

Absorption, Variable and Throughput Costing

Activity Analysis: Costing and Management

Relevant Costs for Decision Making

Operational Budgets

Strategy and Control

Planning and Budgeting for Strategic Success

Capital Budgeting and Strategic Investment Decisions

The Strategic Management of Costs and Revenues

Strategic Management Control: a Lean Perspective

Responsibility Accounting, Performance Evaluation and Transfer Pricing

The Balanced Scorecard and Strategy Maps

Rewards, Incentives and Risk Management

Sustainability Management Accounting

Filters