Question 1

Incurring actual indirect factory wages in excess of budgeted amounts for actual production results in a

Accepted Answer

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

Question 2

Ruby Company produces a chair that requires 5 yards of material per unit.The standard price of one yard of material is $7.50.During the month, 8,500 chairs were manufactured, using 43,600 yards at a cost of $7.55 per yard.
Determine the a price variance, b quantity variance, and c cost variance.

Accepted Answer

a Price variance = $7.50 - $7.

Question 3

The following data relate to direct labor costs for the current period: Standard costs 7,500 hours at $11.70
Actual costs 6,000 hours at $12.00
What is the direct labor time variance?

Accepted Answer

A) $18,000 favorable 
B) $18,000 unfavorable 
C) $17,550 unfavorable 
D) $17,550 favorable 
A) $18,000 favorable 
B) $18,000 unfavorable 
C) $17,550 unfavorable 
D) $17,550 favorable

Question 4

Favorable fixed factory overhead volume variances are never harmful, since achieving them encourages managers to run the factory above normal capacity.

Accepted Answer

A) True 
 B)False

Question 5

Changes in technology, machinery, or production methods may make past cost data irrelevant when setting standards.

Accepted Answer

A) True 
 B)False

Question 6

The labor rate variance is

Accepted Answer

A) $4,920 unfavorable 
B) $4,920 favorable 
C) $4,560 favorable 
D) $4,560 unfavorable 
A) $4,920 unfavorable 
B) $4,920 favorable 
C) $4,560 favorable 
D) $4,560 unfavorable

Question 7

Match the following formulas or descriptions with the term a-e it defines.
-Standard variable overhead for actual units produced

Accepted Answer

A) Direct materials price variance 
B) Direct labor rate variance 
C) Direct labor time variance 
D) Direct materials quantity variance 
E) Budgeted variable factory overhead 
A) Direct materials price variance 
B) Direct labor rate variance 
C) Direct labor time variance 
D) Direct materials quantity variance 
E) Budgeted variable factory overhead

Question 8

Sally's Chocolate Company makes gourmet cupcakes which are sold by the dozen.Compute the standard cost for one dozen cupcakes, based on the following standards:
Standard materials quantity: 4.25 cups of ingredients at $0.56 per cup
Standard labor: 1.10 hours at $8.30 per hour
Factory overhead: $3.80 per direct labor hour

Accepted Answer

The answer of Sally's Chocolate Company makes gourmet cupcakes which...

Question 9

If at the end of the fiscal year, the variances from standard are significant, the variances should be transferred to the

Accepted Answer

A) work in process account 
B) cost of goods sold account 
C) finished goods account 
D) work in process, cost of goods sold, and finished goods accounts 
A) work in process account 
B) cost of goods sold account 
C) finished goods account 
D) work in process, cost of goods sold, and finished goods accounts

Question 10

A favorable cost variance occurs when actual cost is less than budgeted cost at actual volumes.

Accepted Answer

A) True 
 B)False

Question 11

Calculate the total direct labor variance.

Accepted Answer

A) $2,051.25 favorable 
B) $2,051.25 unfavorable 
C) $2,362.50 unfavorable 
D) $2,362.50 favorable 
A) $2,051.25 favorable 
B) $2,051.25 unfavorable 
C) $2,362.50 unfavorable 
D) $2,362.50 favorable

Question 12

An example of a nonfinancial measure is the number of customer complaints.

Accepted Answer

A) True 
 B)False

Question 13

The variance from standard for factory overhead cost resulting from operating at a level above or below 100% of normal capacity is termed volume variance.

Accepted Answer

A) True 
 B)False

Question 14

Robin Company purchased and used 520 pounds of direct materials to produce a product with a 510 pound standard direct materials requirement.The standard materials price is $2.10 per pound.The actual materials price was $2.00 per pound.
Prepare the journal entries to record 1 the purchase of the materials and 2 the material entering production.

Accepted Answer

Materials 520 × $2.1

Question 15

Match the following formulas or descriptions with the term a-e it defines.
-Actual quantity - Standard quantity × Standard price

Accepted Answer

A) Direct materials price variance 
B) Direct labor rate variance 
C) Direct labor time variance 
D) Direct materials quantity variance 
E) Budgeted variable factory overhead 
A) Direct materials price variance 
B) Direct labor rate variance 
C) Direct labor time variance 
D) Direct materials quantity variance 
E) Budgeted variable factory overhead

Question 16

If the standard to produce a given amount of product is 600 direct labor hours at $15 and the actual was 600 hours at $17, the rate variance was $1,200 unfavorable.

Accepted Answer

A) True 
 B)False

Question 17

The direct labor time variance measures the efficiency of the direct labor force.

Accepted Answer

A) True 
 B)False

Question 18

In most businesses, cost standards are established principally by accountants.

Accepted Answer

A) True 
 B)False

Question 19

Titus Company produced 8,900 units of a product that required 3.25 standard hours per unit.The standard fixed overhead cost per unit is $1.20 per hour at 29,000 hours, which is 100% of normal capacity.
Determine the fixed factory overhead volume variance.

Accepted Answer

The fixed factory overhead vol

Question 20

Standards are more widely used for nonmanufacturing activities than for manufacturing activities.

Accepted Answer

A) True 
 B)False

Incurring actual indirect factory wages in excess of budgeted amounts for actual production results in a

Ruby Company produces a chair that requires 5 yards of material per unit.The standard price of one yard of material is $7.50.During the month, 8,500 chairs were manufactured, using 43,600 yards at a cost of $7.55 per yard. Determine the a price variance, b quantity variance, and c cost variance.

The following data relate to direct labor costs for the current period: Standard costs 7,500 hours at $11.70 Actual costs 6,000 hours at $12.00 What is the direct labor time variance?

Favorable fixed factory overhead volume variances are never harmful, since achieving them encourages managers to run the factory above normal capacity.

Changes in technology, machinery, or production methods may make past cost data irrelevant when setting standards.

The labor rate variance is

Match the following formulas or descriptions with the term a-e it defines. -Standard variable overhead for actual units produced

If at the end of the fiscal year, the variances from standard are significant, the variances should be transferred to the

A favorable cost variance occurs when actual cost is less than budgeted cost at actual volumes.

Calculate the total direct labor variance.

An example of a nonfinancial measure is the number of customer complaints.

The variance from standard for factory overhead cost resulting from operating at a level above or below 100% of normal capacity is termed volume variance.

Match the following formulas or descriptions with the term a-e it defines. -Actual quantity - Standard quantity × Standard price

If the standard to produce a given amount of product is 600 direct labor hours at $15 and the actual was 600 hours at $17, the rate variance was $1,200 unfavorable.

The direct labor time variance measures the efficiency of the direct labor force.

In most businesses, cost standards are established principally by accountants.

Titus Company produced 8,900 units of a product that required 3.25 standard hours per unit.The standard fixed overhead cost per unit is $1.20 per hour at 29,000 hours, which is 100% of normal capacity. Determine the fixed factory overhead volume variance.

Standards are more widely used for nonmanufacturing activities than for manufacturing activities.

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

Incurring actual indirect factory wages in excess of budgeted amounts for actual production results in a

Ruby Company produces a chair that requires 5 yards of material per unit.The standard price of one yard of material is $7.50.During the month, 8,500 chairs were manufactured, using 43,600 yards at a cost of $7.55 per yard. Determine the a price variance, b quantity variance, and c cost variance.

The following data relate to direct labor costs for the current period: Standard costs 7,500 hours at $11.70 Actual costs 6,000 hours at $12.00 What is the direct labor time variance?

Favorable fixed factory overhead volume variances are never harmful, since achieving them encourages managers to run the factory above normal capacity.

Changes in technology, machinery, or production methods may make past cost data irrelevant when setting standards.

The labor rate variance is

Match the following formulas or descriptions with the term a-e it defines. -Standard variable overhead for actual units produced

If at the end of the fiscal year, the variances from standard are significant, the variances should be transferred to the

A favorable cost variance occurs when actual cost is less than budgeted cost at actual volumes.

Calculate the total direct labor variance.

An example of a nonfinancial measure is the number of customer complaints.

The variance from standard for factory overhead cost resulting from operating at a level above or below 100% of normal capacity is termed volume variance.

Match the following formulas or descriptions with the term a-e it defines. -Actual quantity - Standard quantity × Standard price

If the standard to produce a given amount of product is 600 direct labor hours at $15 and the actual was 600 hours at $17, the rate variance was $1,200 unfavorable.

The direct labor time variance measures the efficiency of the direct labor force.

In most businesses, cost standards are established principally by accountants.

Titus Company produced 8,900 units of a product that required 3.25 standard hours per unit.The standard fixed overhead cost per unit is $1.20 per hour at 29,000 hours, which is 100% of normal capacity. Determine the fixed factory overhead volume variance.

Standards are more widely used for nonmanufacturing activities than for manufacturing activities.

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