Question 1

Management by exception is a term used to describe managers who focus solely on variances that are significant.

Accepted Answer

A) True 
 B)False

Question 2

At the end of the period,balances in Manufacturing Overhead and all variance accounts are typically closed out to:

Accepted Answer

A) sales. 
B) cost of goods sold. 
C) work in process inventory. 
D) finished goods. 
E) None of the answer choices is correct. 
A) sales. 
B) cost of goods sold. 
C) work in process inventory. 
D) finished goods. 
E) None of the answer choices is correct.

Question 3

Exhibit 10-1
Flatland Company applies fixed manufacturing overhead costs to products based on direct labor hours.Information for the month of April appears below.Flatland expects to produce and sell 18,000 units for the month.
Below is budget information for Flatland Company.
  
-Refer to Exhibit 10-1.Based on this information,what is the fixed overhead production volume variance?

Accepted Answer

A) $15,000 unfavorable 
B) $10,000 favorable 
C) $15,000 favorable 
D) $10,000 unfavorable 
E) None of the answer choices is correct. 
A) $15,000 unfavorable 
B) $10,000 favorable 
C) $15,000 favorable 
D) $10,000 unfavorable 
E) None of the answer choices is correct.

Question 4

A favorable materials price variance may be caused by:

Accepted Answer

A) A reduction in suppliers causing an unexpected increase in price. 
B) Higher quality materials purchased at a higher cost resulting in fewer materials being used than expected. 
C) Highly skilled employees using fewer materials than expected. 
D) Low quality materials purchased at a lower cost than expected. 
E) None of the answer choices is correct. 
A) A reduction in suppliers causing an unexpected increase in price. 
B) Higher quality materials purchased at a higher cost resulting in fewer materials being used than expected. 
C) Highly skilled employees using fewer materials than expected. 
D) Low quality materials purchased at a lower cost than expected. 
E) None of the answer choices is correct.

Question 5

Which of the following is a possible cause for an unfavorable labor rate variance?

Accepted Answer

A) An unexpected increase in hiring new unskilled personnel. 
B) Producing fewer units than expected. 
C) An unexpected increase in demand caused the direct labor workforce to work overtime. 
D) Using attainable standards rather than ideal standards. 
E) None of the answer choices is correct. 
A) An unexpected increase in hiring new unskilled personnel. 
B) Producing fewer units than expected. 
C) An unexpected increase in demand caused the direct labor workforce to work overtime. 
D) Using attainable standards rather than ideal standards. 
E) None of the answer choices is correct.

Question 6

Exhibit 10-5
Catalina Company uses activity-based costing to allocate variable manufacturing overhead costs to products.The company produced 1,800 units of product last month,and identified three activities with the following information for last month.
  
-Refer to Exhibit 10-5.What is the variable overhead efficiency variance for the purchase order activity?

Accepted Answer

A) $2,000 favorable 
B) $2,000 unfavorable 
C) $8,000 favorable 
D) $8,000 unfavorable 
E) None of the answer choices is correct. 
A) $2,000 favorable 
B) $2,000 unfavorable 
C) $8,000 favorable 
D) $8,000 unfavorable 
E) None of the answer choices is correct.

Question 7

The variable overhead efficiency variance is the difference between the actual hours worked at the standard rate and the standard hours worked at the standard rate.

Accepted Answer

A) True 
 B)False

Question 8

Exhibit 10-5
Catalina Company uses activity-based costing to allocate variable manufacturing overhead costs to products.The company produced 1,800 units of product last month,and identified three activities with the following information for last month.
  
-Refer to Exhibit 10-5.What is the variable overhead efficiency variance for the product testing activity?

Accepted Answer

A) $8,000 favorable 
B) $8,000 unfavorable 
C) $3,800 unfavorable 
D) $3,800 favorable 
E) None of the answer choices is correct. 
A) $8,000 favorable 
B) $8,000 unfavorable 
C) $3,800 unfavorable 
D) $3,800 favorable 
E) None of the answer choices is correct.

Question 9

Standard costs are used to establish the flexible budget for direct labor.

Accepted Answer

A) True 
 B)False

Management by exception is a term used to describe managers who focus solely on variances that are significant.

At the end of the period,balances in Manufacturing Overhead and all variance accounts are typically closed out to:

A favorable materials price variance may be caused by:

Which of the following is a possible cause for an unfavorable labor rate variance?

The variable overhead efficiency variance is the difference between the actual hours worked at the standard rate and the standard hours worked at the standard rate.

Standard costs are used to establish the flexible budget for direct labor.

What Is Managerial Accounting

How Is Job Costing Used to Track Production Costs

How Does an Organization Use Activity-Based Costing to Allocate Overhead Costs

How Is Process Costing Used to Track Production Costs

How Do Organizations Identify Cost Behavior Patterns

How Is Cost-Volume-Profit Analysis Used for Decision Making

How Are Relevant Revenues and Costs Used to Make Decisions

How Is Capital Budgeting Used to Make Decisions

How Are Operating Budgets Created

How Do Managers Evaluate Performance in Decentralized Organizations

How Is the Statement of Cash Flows Prepared and Used

How Do Managers Use Financial and Nonfinancial Performance Measures

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Exam 10: How Do Managers Evaluate Performance Using Cost Variance Analysis

Management by exception is a term used to describe managers who focus solely on variances that are significant.

At the end of the period,balances in Manufacturing Overhead and all variance accounts are typically closed out to:

A favorable materials price variance may be caused by:

Which of the following is a possible cause for an unfavorable labor rate variance?

The variable overhead efficiency variance is the difference between the actual hours worked at the standard rate and the standard hours worked at the standard rate.

Standard costs are used to establish the flexible budget for direct labor.

What Is Managerial Accounting

How Is Job Costing Used to Track Production Costs

How Does an Organization Use Activity-Based Costing to Allocate Overhead Costs

How Is Process Costing Used to Track Production Costs

How Do Organizations Identify Cost Behavior Patterns

How Is Cost-Volume-Profit Analysis Used for Decision Making

How Are Relevant Revenues and Costs Used to Make Decisions

How Is Capital Budgeting Used to Make Decisions

How Are Operating Budgets Created

How Do Managers Evaluate Performance in Decentralized Organizations

How Is the Statement of Cash Flows Prepared and Used

How Do Managers Use Financial and Nonfinancial Performance Measures

Filters