Question 1

Variances from standard costs are reported to

Accepted Answer

A) suppliers 
B) stockholders 
C) management 
D) creditors 
A) suppliers 
B) stockholders 
C) management 
D) creditors

Question 2

Though favorable fixed factory overhead volume variances are usually good news, if inventory levels are too high, additional production could be harmful.

Accepted Answer

A) True 
 B)False

Question 3

The formula to compute the direct materials price variance is to calculate the difference between

Accepted Answer

A) Actual costs - Actual quantity × Standard price 
B) Actual cost + Standard costs 
C) Actual cost - Standard costs 
D) Actual quantity × Standard price - Standard costs 
A) Actual costs - Actual quantity × Standard price 
B) Actual cost + Standard costs 
C) Actual cost - Standard costs 
D) Actual quantity × Standard price - Standard costs

Question 4

What is the direct labor time variance?

Accepted Answer

A) $7,700 favorable 
B) $7,700 unfavorable 
C) $11,200 unfavorable 
D) $11,200 favorable 
A) $7,700 favorable 
B) $7,700 unfavorable 
C) $11,200 unfavorable 
D) $11,200 favorable

Question 5

It is correct to rely exclusively on past cost data when establishing standards.

Accepted Answer

A) True 
 B)False

Question 6

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual was 800 units at $12, the direct materials quantity variance was $2,200 unfavorable.

Accepted Answer

A) True 
 B)False

Question 7

A company must choose either a standard system or nonfinancial performance measures to evaluate the performance of a company.

Accepted Answer

A) True 
 B)False

Question 8

If the wage rate paid per hour differs from the standard wage rate per hour for direct labor, the variance is a

Accepted Answer

A) variable variance 
B) rate variance 
C) quantity variance 
D) volume variance 
A) variable variance 
B) rate variance 
C) quantity variance 
D) volume variance

Question 9

Non-financial measures are often linked to the inputs or outputs of an activity or process.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not a reason for a direct materials quantity variance?

Accepted Answer

A) malfunctioning equipment 
B) purchasing of inferior raw materials 
C) increased material cost per unit 
D) spoilage of materials 
A) malfunctioning equipment 
B) purchasing of inferior raw materials 
C) increased material cost per unit 
D) spoilage of materials

Question 11

Since the controllable variance measures the efficiency of using variable overhead resources, if budgeted variable overhead exceeds actual results, the variance is favorable.

Accepted Answer

A) True 
 B)False

Question 12

Standard and actual costs for direct labor for the manufacture of 300 units of product were as follows:
Actual costs 125 hours @ $54.00
Standard costs 131 hours @ $53.00
Determine the direct labor a time variance, b rate variance, and c total cost variance.

Accepted Answer

The answer of Standard and actual costs for direct labor...

Question 13

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual was 800 units at $12, the direct materials price variance was $800 favorable.

Accepted Answer

A) True 
 B)False

Question 14

Standard costs are determined by multiplying expected price by expected quantity.

Accepted Answer

A) True 
 B)False

Question 15

Because accountants have financial expertise, they are the only ones that are able to set standard costs for the production area.

Accepted Answer

A) True 
 B)False

Question 16

The labor time variance is

Accepted Answer

A) $9,880 favorable 
B) $9,880 unfavorable 
C) $7,800 unfavorable 
D) $7,800 favorable 
A) $9,880 favorable 
B) $9,880 unfavorable 
C) $7,800 unfavorable 
D) $7,800 favorable

Question 17

Calculate the direct labor rate variance.

Accepted Answer

A) $4,488.75 unfavorable 
B) $6,851.25 favorable 
C) $4,488.75 favorable 
D) $6,851.25 unfavorable 
A) $4,488.75 unfavorable 
B) $6,851.25 favorable 
C) $4,488.75 favorable 
D) $6,851.25 unfavorable

Question 18

Ideal standards are developed under conditions that assume no idle time, no machine breakdowns, and no materials spoilage.

Accepted Answer

A) True 
 B)False

Question 19

Currently attainable standards do not allow for reasonable production difficulties.

Accepted Answer

A) True 
 B)False

Question 20

What is the amount of the variable factory overhead controllable variance?

Accepted Answer

A) $10,000 favorable 
B) $2,500 unfavorable 
C) $10,000 unfavorable 
D) $2,500 favorable 
A) $10,000 favorable 
B) $2,500 unfavorable 
C) $10,000 unfavorable 
D) $2,500 favorable

Variances from standard costs are reported to

Though favorable fixed factory overhead volume variances are usually good news, if inventory levels are too high, additional production could be harmful.

The formula to compute the direct materials price variance is to calculate the difference between

What is the direct labor time variance?

It is correct to rely exclusively on past cost data when establishing standards.

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual was 800 units at $12, the direct materials quantity variance was $2,200 unfavorable.

A company must choose either a standard system or nonfinancial performance measures to evaluate the performance of a company.

If the wage rate paid per hour differs from the standard wage rate per hour for direct labor, the variance is a

Non-financial measures are often linked to the inputs or outputs of an activity or process.

Which of the following is not a reason for a direct materials quantity variance?

Since the controllable variance measures the efficiency of using variable overhead resources, if budgeted variable overhead exceeds actual results, the variance is favorable.

Standard and actual costs for direct labor for the manufacture of 300 units of product were as follows: Actual costs 125 hours @ $54.00 Standard costs 131 hours @ $53.00 Determine the direct labor a time variance, b rate variance, and c total cost variance.

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual was 800 units at $12, the direct materials price variance was $800 favorable.

Standard costs are determined by multiplying expected price by expected quantity.

Because accountants have financial expertise, they are the only ones that are able to set standard costs for the production area.

The labor time variance is

Calculate the direct labor rate variance.

Ideal standards are developed under conditions that assume no idle time, no machine breakdowns, and no materials spoilage.

Currently attainable standards do not allow for reasonable production difficulties.

What is the amount of the variable factory overhead controllable variance?

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

Statement of Cash Flows

Financial Statement Analysis

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Exam 7: Performance Evaluation Using Variances From Standard Costs

Variances from standard costs are reported to

Though favorable fixed factory overhead volume variances are usually good news, if inventory levels are too high, additional production could be harmful.

The formula to compute the direct materials price variance is to calculate the difference between

What is the direct labor time variance?

It is correct to rely exclusively on past cost data when establishing standards.

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual was 800 units at $12, the direct materials quantity variance was $2,200 unfavorable.

A company must choose either a standard system or nonfinancial performance measures to evaluate the performance of a company.

If the wage rate paid per hour differs from the standard wage rate per hour for direct labor, the variance is a

Non-financial measures are often linked to the inputs or outputs of an activity or process.

Which of the following is not a reason for a direct materials quantity variance?

Since the controllable variance measures the efficiency of using variable overhead resources, if budgeted variable overhead exceeds actual results, the variance is favorable.

Standard and actual costs for direct labor for the manufacture of 300 units of product were as follows: Actual costs 125 hours @ $54.00 Standard costs 131 hours @ $53.00 Determine the direct labor a time variance, b rate variance, and c total cost variance.

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual was 800 units at $12, the direct materials price variance was $800 favorable.

Standard costs are determined by multiplying expected price by expected quantity.

Because accountants have financial expertise, they are the only ones that are able to set standard costs for the production area.

The labor time variance is

Calculate the direct labor rate variance.

Ideal standards are developed under conditions that assume no idle time, no machine breakdowns, and no materials spoilage.

Currently attainable standards do not allow for reasonable production difficulties.

What is the amount of the variable factory overhead controllable variance?

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

Statement of Cash Flows

Financial Statement Analysis

Filters