Question 1

Efficiency variances focus on the difference between

Accepted Answer

A)  actual quantity used and standard quantity allowed for estimated activity 
B)  actual quantity used and standard quantity allowed for units actually produced 
C)  quantity allowed for estimated production and standard quantity allowed for units actually produced 
D)  none of the above 
A)  actual quantity used and standard quantity allowed for estimated activity 
B)  actual quantity used and standard quantity allowed for units actually produced 
C)  quantity allowed for estimated production and standard quantity allowed for units actually produced 
D)  none of the above

Question 2

labour rate variances can be the result of

Accepted Answer

A)  the use of an average wage rate 
B)  unexpected overtime 
C)  seniority mix changes 
D)  all of the above 
A)  the use of an average wage rate 
B)  unexpected overtime 
C)  seniority mix changes 
D)  all of the above

Question 3

Who is responsible for unfavorable labour efficiency variances caused by poor quality materials?

Accepted Answer

A)  warehouse manager 
B)  production manager 
C)  purchasing manager 
D)  engineering manager 
A)  warehouse manager 
B)  production manager 
C)  purchasing manager 
D)  engineering manager

Question 4

During April, 80,000 units of product were produced. The standard quantity of material allowed per unit was two pounds at a standard cost of £5 per pound. If there was a favorable materials usage variance of £40,000 for April, the actual quantity of materials used must have been

Accepted Answer

A)  168,000 pounds 
B)  152,000 pounds 
C)  84,000 pounds 
D)  76,000 pounds 
A)  168,000 pounds 
B)  152,000 pounds 
C)  84,000 pounds 
D)  76,000 pounds

Question 5

Figure 7
Orient Company has developed the following standards for one of its products:
The following activities occurred during the month of November:
   The company records materials price variances at the time of purchase.
  
-Refer to Figure 7. Orient's materials price variance would be

Accepted Answer

A)  £22,000 unfavorable 
B)  £18,000 unfavorable 
C)  £6,000 unfavorable 
D)  £4,000 unfavorable 
A)  £22,000 unfavorable 
B)  £18,000 unfavorable 
C)  £6,000 unfavorable 
D)  £4,000 unfavorable

Question 6

The following standard costs were developed for one of the products of CH Industries:
The following information is available regarding the company's operations for the period:
   Budgeted fixed overhead for the period is £450,000, and the standard fixed overhead rate is based on expected capacity of 90,000 direct labour hours. The materials price variance is computed at the time of purchase.
Required:

Accepted Answer

The answer of The following standard costs were developed for...

Question 7

A 5 percent wage increase for all factory employees would affect which of the following variances?

Accepted Answer

A)  materials price variance 
B)  labour rate variance 
C)  labour efficiency variance 
D)  variable manufacturing overhead efficiency variance 
A)  materials price variance 
B)  labour rate variance 
C)  labour efficiency variance 
D)  variable manufacturing overhead efficiency variance

Question 8

For planning and control purposes, fixed overhead is NOT included in the standard cost per unit because:

Accepted Answer

A)  it is incurred based on the number of units produced. 
B)  the number of units produced do not vary from period to period. 
C)  it can best be controlled on a lump-sum basis. 
D)  of all of the above 
A)  it is incurred based on the number of units produced. 
B)  the number of units produced do not vary from period to period. 
C)  it can best be controlled on a lump-sum basis. 
D)  of all of the above

Question 9

During September, 40,000 units of product were produced. The standard quantity of material allowed per unit was four pounds at a standard cost of £6.00 per pound. If there was a favorable materials usage variance of £30,000 for April, the actual quantity of materials used must be

Accepted Answer

A)  41,250 pounds 
B)  38,750 pounds 
C)  165,000 pounds 
D)  155,000 pounds 
A)  41,250 pounds 
B)  38,750 pounds 
C)  165,000 pounds 
D)  155,000 pounds

Question 10

Figure 6
  
-Refer to Figure 6. The variable overhead efficiency variance would be

Accepted Answer

A)  £1,000 favorable 
B)  £600 favorable 
C)  £400 favorable 
D)  £200 favorable 
A)  £1,000 favorable 
B)  £600 favorable 
C)  £400 favorable 
D)  £200 favorable

Question 11

The materials price variance is calculated as

Accepted Answer

A)  (Actual price - Standard price) x Actual quantity 
B)  (Actual price - Standard price) x Standard quantity 
C)  (Actual quantity - Standard quantity) x Actual price 
D)  (Actual quantity - Standard quantity) x Standard price 
A)  (Actual price - Standard price) x Actual quantity 
B)  (Actual price - Standard price) x Standard quantity 
C)  (Actual quantity - Standard quantity) x Actual price 
D)  (Actual quantity - Standard quantity) x Standard price

Question 12

The sales price variance is created by a difference between

Accepted Answer

A)  actual and standard contribution margin. 
B)  actual and expected sales price. 
C)  expected and standard net income. 
D)  actual and expected sales volume. 
A)  actual and standard contribution margin. 
B)  actual and expected sales price. 
C)  expected and standard net income. 
D)  actual and expected sales volume.

Question 13

Figure 2
Rax Company has developed the following standards for one of its products:
The following activities occurred during the month of October:
   The company records materials price variances at the time of purchase.
  
-Refer to Figure 2. Rax's variable standard cost per unit would be

Accepted Answer

A)  £78 
B)  £192 
C)  £246 
D)  £222 
A)  £78 
B)  £192 
C)  £246 
D)  £222

Question 14

Figure 6
  
-Refer to Figure 6. The variable overhead spending (expenditure) variance would be

Accepted Answer

A)  £2,000 favorable 
B)  £1,200 favorable 
C)  £400 favorable 
D)  £200 favorable 
A)  £2,000 favorable 
B)  £1,200 favorable 
C)  £400 favorable 
D)  £200 favorable

Question 15

Barker Production Company has developed the following standards for one of its products.
The company records materials price variances at the time of purchase. The following activity occurred during the month of April:
   Required:
   
a.
Calculate the direct materials price variance.
b.
Calculate the direct materials usage variance.
c.
Calculate the direct labour rate variance.
d.
Calculate the direct labour efficiency variance.
e.
Calculate the variable overhead spending (expenditure) variance.
f. Calculate the variable overhead efficiency variance.

Accepted Answer

The answer of Barker Production Company has developed the following...

Efficiency variances focus on the difference between

labour rate variances can be the result of

Who is responsible for unfavorable labour efficiency variances caused by poor quality materials?

During April, 80,000 units of product were produced. The standard quantity of material allowed per unit was two pounds at a standard cost of £5 per pound. If there was a favorable materials usage variance of £40,000 for April, the actual quantity of materials used must have been

Figure 7 Orient Company has developed the following standards for one of its products: The following activities occurred during the month of November: The company records materials price variances at the time of purchase. -Refer to Figure 7. Orient's materials price variance would be

A 5 percent wage increase for all factory employees would affect which of the following variances?

For planning and control purposes, fixed overhead is NOT included in the standard cost per unit because:

During September, 40,000 units of product were produced. The standard quantity of material allowed per unit was four pounds at a standard cost of £6.00 per pound. If there was a favorable materials usage variance of £30,000 for April, the actual quantity of materials used must be

Figure 6 -Refer to Figure 6. The variable overhead efficiency variance would be

The materials price variance is calculated as

The sales price variance is created by a difference between

Figure 2 Rax Company has developed the following standards for one of its products: The following activities occurred during the month of October: The company records materials price variances at the time of purchase. -Refer to Figure 2. Rax's variable standard cost per unit would be

Figure 6 -Refer to Figure 6. The variable overhead spending (expenditure) variance would be

Introduction to Management Accounting

An Introduction to Cost Terms and Concepts

Cost-Volume-Profit Analysis

Measuring Relevant Costs and Revenues for Decision-Making

Pricing Decisions and Profitability Analysis

Capital Investment Decisions

Cost Assignment

Activity-Based Costing

The Budgeting Process

Management Control Systems

Divisional Financial Performance Measurement

Transfer Pricing in Divisionalized Companies

Cost Management

Strategic Performance Management

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Exam 11: Standard Costing and Variance Analysis

Efficiency variances focus on the difference between

labour rate variances can be the result of

Who is responsible for unfavorable labour efficiency variances caused by poor quality materials?

During April, 80,000 units of product were produced. The standard quantity of material allowed per unit was two pounds at a standard cost of £5 per pound. If there was a favorable materials usage variance of £40,000 for April, the actual quantity of materials used must have been

Figure 7 Orient Company has developed the following standards for one of its products: The following activities occurred during the month of November: The company records materials price variances at the time of purchase. -Refer to Figure 7. Orient's materials price variance would be

A 5 percent wage increase for all factory employees would affect which of the following variances?

For planning and control purposes, fixed overhead is NOT included in the standard cost per unit because:

During September, 40,000 units of product were produced. The standard quantity of material allowed per unit was four pounds at a standard cost of £6.00 per pound. If there was a favorable materials usage variance of £30,000 for April, the actual quantity of materials used must be

Figure 6 -Refer to Figure 6. The variable overhead efficiency variance would be

The materials price variance is calculated as

The sales price variance is created by a difference between

Figure 2 Rax Company has developed the following standards for one of its products: The following activities occurred during the month of October: The company records materials price variances at the time of purchase. -Refer to Figure 2. Rax's variable standard cost per unit would be

Figure 6 -Refer to Figure 6. The variable overhead spending (expenditure) variance would be

Introduction to Management Accounting

An Introduction to Cost Terms and Concepts

Cost-Volume-Profit Analysis

Measuring Relevant Costs and Revenues for Decision-Making

Pricing Decisions and Profitability Analysis

Capital Investment Decisions

Cost Assignment

Activity-Based Costing

The Budgeting Process

Management Control Systems

Divisional Financial Performance Measurement

Transfer Pricing in Divisionalized Companies

Cost Management

Strategic Performance Management

Filters