Question 1

Managers develop quantity standards when they decide what amount of input should be used per unit of output.

Accepted Answer

A) True 
 B)False

Question 2

Jersey Company produced 1,000 trash cans during April using 450 direct labour hours and 3,100 kg of rubber.Its materials and labour standards are as follows:   Its materials price variance was a favourable $620 and its labour rate variance was an unfavourable $900.

Accepted Answer

The answer of Jersey Company produced 1,000 trash cans during...

Question 3

Which formula is used to compute the standard quantity of materials allowed?

Accepted Answer

A)  unit quantity standard × standard output 
B)  unit quantity standard × actual input 
C)  unit quantity standard × standard input 
D)  unit quantity standard × actual output 
A)  unit quantity standard × standard output 
B)  unit quantity standard × actual input 
C)  unit quantity standard × standard input 
D)  unit quantity standard × actual output

Question 4

Min Company has developed the following standards for one of its products. $\begin{array}{ll}
\text { Direct materials: } & 15 \mathrm{~kg} \times \$ 17.50 \text { per kilogram } \
\text { Direct labour: } & 4 \text { hours } \times \$ 24 \text { per hour } \
\text { Variable manufacturing overhead: } & 4 \text { hours } \times \$ 14 \text { per hour }
\end{array}$ The following activity occurred during the month of November: $$\begin{array} { l l } 
\text { Materials purchased: } & 20,000 \mathrm {~kg} \text { costing } \$ 340,000 \
\text { Materials used: } & 7,200 \mathrm {~kg} \
\text { Units produced: } & 500 \text { units } \
\text { Direct labour: } & 2,300 \text { hours at } \$ 23.60 \text { per hour }
\end{array}$$ The company records materials price variances at the time of purchase.What is the direct materials price variance?

Accepted Answer

A)  $10,000 favourable 
B)  $10,000 unfavourable 
C)  $50,000 favourable 
D)  $50,000 unfavourable 
A)  $10,000 favourable 
B)  $10,000 unfavourable 
C)  $50,000 favourable 
D)  $50,000 unfavourable

Question 5

Kaizen means continuous improvement.

Accepted Answer

A) True 
 B)False

Question 6

Which formula is used to calculate the labour rate variance?

Accepted Answer

A)  (actual rate × actual hours)− (standard rate × standard hours) 
B)  (standard rate × actual rate)− (actual rate × actual hours) 
C)  (actual rate × standard hours)− (standard rate × actual hours) 
D)  (actual rate × actual hours)− (standard rate × actual hours) 
A)  (actual rate × actual hours)− (standard rate × standard hours) 
B)  (standard rate × actual rate)− (actual rate × actual hours) 
C)  (actual rate × standard hours)− (standard rate × actual hours) 
D)  (actual rate × actual hours)− (standard rate × actual hours)

Question 7

Match each item with the correct statement below.
-This reflects the planned improvement that is set,which will help reduce non-value-added costs.

Accepted Answer

A) Quantity standards 
B) Ideal standards 
C) Price standards 
D) Standard cost sheet 
E) Upper control limit
F)Currently attainable standards
G)Kaizen standards 
A) Quantity standards 
B) Ideal standards 
C) Price standards 
D) Standard cost sheet 
E) Upper control limit
F)Currently attainable standards
G)Kaizen standards

Question 8

Which of the following statements is characteristic of currently attainable standards?

Accepted Answer

A)  They can be achieved under efficient operating conditions. 
B)  No allowance is made for normal breakdowns,interruptions,etc. 
C)  They are challenging and not achievable. 
D)  They tend to achieve lower performance levels from personnel. 
A)  They can be achieved under efficient operating conditions. 
B)  No allowance is made for normal breakdowns,interruptions,etc. 
C)  They are challenging and not achievable. 
D)  They tend to achieve lower performance levels from personnel.

Question 9

Which variance is the difference between the actual cost of the input and its planned cost?

Accepted Answer

A)  the total budget variance 
B)  the usage variance 
C)  the price variance 
D)  the efficiency variance 
A)  the total budget variance 
B)  the usage variance 
C)  the price variance 
D)  the efficiency variance

Question 10

Direct materials ( 2 sheets of glass $ (\$ 2 $ per sheet)$\quad$$ \$ 4 $
Direct labour (3 hours $ @ \$ 8 $ per hour)$\quad$$\quad$$\quad$$\quad$$\quad$24
-Refer to the Figure.What is the journal entry to record the purchase of materials?

Accepted Answer

A)  Materials 19,575
Materials Price Variance 5,800
Accounts Payable 25,375 
B)  Materials 24,500
Materials Price Variance 5,600
Accounts Payable 18,900 
C)  Materials 18,900
Materials Price Variance 5,600
Accounts Payable 24,500 
D)  Materials 25,375
Materials Price Variance 5,800
Accounts Payable 19,575 
A)  Materials 19,575
Materials Price Variance 5,800
Accounts Payable 25,375 
B)  Materials 24,500
Materials Price Variance 5,600
Accounts Payable 18,900 
C)  Materials 18,900
Materials Price Variance 5,600
Accounts Payable 24,500 
D)  Materials 25,375
Materials Price Variance 5,800
Accounts Payable 19,575

Question 11

One reason for adopting a standard cost system is to make product costing easier.

Accepted Answer

A) True 
 B)False

Question 12

A kaizen standard reflects the realized improvements for the past periods and a search for more improvements for the future.

Accepted Answer

A) True 
 B)False

Question 13

Hair of the K9 manufactures dog food.During the month,it manufactured 3,000 bags of kibble,using 0.25 hours of direct labour per bag at a rate of $9.00 per hour.The materials and labour standards for manufacturing the bags of kibble are as follows: $\begin{array}{lr}
\text { Direct materials ( } 1 \mathrm{~kg} \text { of beef }(\$ 1.00 \text { per kilogram) } & \$ 1.00 \
\text { Direct materials }(1 \mathrm{bag} @ \$ 0.25 \text { per bag) } & 0.25 \
\text { Direct labour }(0.30 \text { hour } @ \$ 9.00 \text { per hour }) & 2.70
\end{array}$ The company actually used 3,300 kg of beef at a price of $1.10 per kilogram.It also purchased 3,000 bags at a price of $0.15 per bag. A. Determine the total materials price variance and whether it is favourable or unfavourable.
B. Determine the materials usage variance for beef and whether it is favourable or unfavourable.
C. Determine the labour rate variance and whether it is favourable or unfavourable.
D. Determine the labour efficiency variance and whether it is favourable or unfavourable.

Accepted Answer

The answer of Hair of the K9 manufactures dog food.During...

Question 14

Direct materials ( $5 \mathrm {~m}$ of denim $@ \$ 2$ per metre)$\quad$$\$ 10$
Direct labour (3 hours $@ \$ 6$ per hour)$\quad$$\quad$$\quad$$\quad$$\quad$18
-Refer to the Figure.What is the entry to record the purchase of materials?

Accepted Answer

A)  Materials 1,218,750
Materials Price Variance 31,250
Accounts Payable 1,250,000 
B)  Materials 1,170,000
Materials Price Variance 30,000
Accounts Payable 1,200,000 
C)  Materials 1,200,000
Materials Price Variance 30,000
Accounts Payable 1,170,000 
D)  Materials 1,250,000
Materials Price Variance 31,250
Accounts Payable 1,218,750 
A)  Materials 1,218,750
Materials Price Variance 31,250
Accounts Payable 1,250,000 
B)  Materials 1,170,000
Materials Price Variance 30,000
Accounts Payable 1,200,000 
C)  Materials 1,200,000
Materials Price Variance 30,000
Accounts Payable 1,170,000 
D)  Materials 1,250,000
Materials Price Variance 31,250
Accounts Payable 1,218,750

Question 15

Kaizen costing involves which of the following?

Accepted Answer

A)  changing the standards frequently 
B)  changing management 
C)  outsourcing processes 
D)  creating major ad campaigns 
A)  changing the standards frequently 
B)  changing management 
C)  outsourcing processes 
D)  creating major ad campaigns

Question 16

What is the material price variance?

Accepted Answer

A)  It is the difference between the actual and standard unit price of an input multiplied by the number of inputs used. 
B)  It is the difference between the actual and standard unit price of an output multiplied by the number of inputs used. 
C)  It is the difference between the actual and standard unit price of an input multiplied by the number of inputs purchased. 
D)  It is the difference between the actual and standard unit price of an output multiplied by the number of inputs purchased. 
A)  It is the difference between the actual and standard unit price of an input multiplied by the number of inputs used. 
B)  It is the difference between the actual and standard unit price of an output multiplied by the number of inputs used. 
C)  It is the difference between the actual and standard unit price of an input multiplied by the number of inputs purchased. 
D)  It is the difference between the actual and standard unit price of an output multiplied by the number of inputs purchased.

Question 17

Assume that SQ = Standard Quantity,SP = Standard Price,AQ = Actual Quantity,and AP = Actual Price.Also assume a favourable materials usage variance.Which of the following would be the journal entry and the equation to record the issuance and usage of materials?

Accepted Answer

A)  Work in Process SQ × SP
Materials Usage Variance (AQ − SQ)SP
Materials AQ × SP 
B)  Work in Process AQ × SP
Materials Usage Variance (AQ − SQ)SP
Materials AQ × SP 
C)  Work in Process AQ × AP
Materials Usage Variance (AQ − SQ)SP
Materials AQ × SP 
D)  Work in Process SQ × AP
Materials Usage Variance (AQ − SQ)SP
Materials AQ × SP 
A)  Work in Process SQ × SP
Materials Usage Variance (AQ − SQ)SP
Materials AQ × SP 
B)  Work in Process AQ × SP
Materials Usage Variance (AQ − SQ)SP
Materials AQ × SP 
C)  Work in Process AQ × AP
Materials Usage Variance (AQ − SQ)SP
Materials AQ × SP 
D)  Work in Process SQ × AP
Materials Usage Variance (AQ − SQ)SP
Materials AQ × SP

Question 18

Action Company's standard cost is $600,000.The allowable deviation is ±10%.Its actual costs for three months are as follows: $$\begin{array} { l l } 
\text { April } & \$ 520,000 \
\text { May } & \$ 550,000 \
\text { June } & \$ 575,000
\end{array}$$ What are the upper and lower control limits,respectively?

Accepted Answer

A)  $660,000 and $600,000 
B)  $660,000 and $540,000 
C)  $640,000 and $500,000 
D)  $575,000 and $520,000 
A)  $660,000 and $600,000 
B)  $660,000 and $540,000 
C)  $640,000 and $500,000 
D)  $575,000 and $520,000

Question 19

Baker Company adopted a standard cost system several years ago.The standard costs for the prime costs of its single product follow: Material: $ 10 \mathrm{~kg} @ \$ 4.50 $ per kilogram $\quad$$ \$ 45.00 $
Labour: 6 hours $ @ \$ 8.50 $ per hour $\quad$$\quad$$\quad$$ \$ 51.00 $ The following operating data were taken from the records for December:
1.
Units completed:
5,800 units
2.
Budgeted output:
6,000 units
3.
Materials purchased:
60,000 kg
4.
Total actual labour costs:
$306,600
5.
Actual hours of labour:
36,500 hours
6.
Material usage variance:
$2,250 unfavourable
7.
Total material variance:
$450 unfavourable
Compute the following: A. Labour rate variance
B. Labour efficiency variance
C. Actual kilograms of material used in the production process
D. Actual cost paid per kilogram of material

Accepted Answer

The answer of Baker Company adopted a standard cost system...

Question 20

Direct materials ( $5 \mathrm {~m}$ of denim $@ \$ 2$ per metre)$\quad$$\$ 10$
Direct labour (3 hours $@ \$ 6$ per hour)$\quad$$\quad$$\quad$$\quad$$\quad$18
-Refer to the Figure.What is Allan's materials usage variance?

Accepted Answer

A)  $48,750 U 
B)  $48,750 F 
C)  $50,000 U 
D)  $50,000 F 
A)  $48,750 U 
B)  $48,750 F 
C)  $50,000 U 
D)  $50,000 F

Managers develop quantity standards when they decide what amount of input should be used per unit of output.

Jersey Company produced 1,000 trash cans during April using 450 direct labour hours and 3,100 kg of rubber.Its materials and labour standards are as follows: Its materials price variance was a favourable $620 and its labour rate variance was an unfavourable $900.

Which formula is used to compute the standard quantity of materials allowed?

Kaizen means continuous improvement.

Which formula is used to calculate the labour rate variance?

Match each item with the correct statement below. -This reflects the planned improvement that is set,which will help reduce non-value-added costs.

Which of the following statements is characteristic of currently attainable standards?

Which variance is the difference between the actual cost of the input and its planned cost?

Direct materials ( 2 sheets of glass $(\$ 2$ per sheet) $\quad$ $\$ 4$ Direct labour (3 hours $@ \$ 8$ per hour) $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ 24 -Refer to the Figure.What is the journal entry to record the purchase of materials?

One reason for adopting a standard cost system is to make product costing easier.

A kaizen standard reflects the realized improvements for the past periods and a search for more improvements for the future.

Direct materials ( $5 \mathrm {~m}$ of denim $@ \$ 2$ per metre) $\quad$ $\$ 10$ Direct labour (3 hours $@ \$ 6$ per hour) $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ 18 -Refer to the Figure.What is the entry to record the purchase of materials?

Kaizen costing involves which of the following?

What is the material price variance?

Assume that SQ = Standard Quantity,SP = Standard Price,AQ = Actual Quantity,and AP = Actual Price.Also assume a favourable materials usage variance.Which of the following would be the journal entry and the equation to record the issuance and usage of materials?

Action Company's standard cost is $600,000.The allowable deviation is ±10%.Its actual costs for three months are as follows: April \ 520,000 May \ 550,000 June \ 575,000 What are the upper and lower control limits,respectively?

Direct materials ( $5 \mathrm {~m}$ of denim $@ \$ 2$ per metre) $\quad$ $\$ 10$ Direct labour (3 hours $@ \$ 6$ per hour) $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ 18 -Refer to the Figure.What is Allan's materials usage variance?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Costvolumeprofit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Budgeting, production, cash, and Master Budget

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters

Exam 10: Standard Costing: a Managerial Control Tool

Managers develop quantity standards when they decide what amount of input should be used per unit of output.

Jersey Company produced 1,000 trash cans during April using 450 direct labour hours and 3,100 kg of rubber.Its materials and labour standards are as follows: Its materials price variance was a favourable $620 and its labour rate variance was an unfavourable $900.

Which formula is used to compute the standard quantity of materials allowed?

Kaizen means continuous improvement.

Which formula is used to calculate the labour rate variance?

Match each item with the correct statement below. -This reflects the planned improvement that is set,which will help reduce non-value-added costs.

Which of the following statements is characteristic of currently attainable standards?

Which variance is the difference between the actual cost of the input and its planned cost?

Direct materials ( 2 sheets of glass ($2 (\$ 2 ($2 per sheet) \quad$4 \$ 4 $4 Direct labour (3 hours @$8 @ \$ 8 @$8 per hour) \quad\quad\quad\quad\quad 24 -Refer to the Figure.What is the journal entry to record the purchase of materials?

One reason for adopting a standard cost system is to make product costing easier.

A kaizen standard reflects the realized improvements for the past periods and a search for more improvements for the future.

Direct materials ( 5 m5 \mathrm {~m}5 m of denim @$2@ \$ 2@$2 per metre) \quad$10\$ 10$10 Direct labour (3 hours @$6@ \$ 6@$6 per hour) \quad\quad\quad\quad\quad 18 -Refer to the Figure.What is the entry to record the purchase of materials?

Kaizen costing involves which of the following?

What is the material price variance?

Assume that SQ = Standard Quantity,SP = Standard Price,AQ = Actual Quantity,and AP = Actual Price.Also assume a favourable materials usage variance.Which of the following would be the journal entry and the equation to record the issuance and usage of materials?

Action Company's standard cost is $600,000.The allowable deviation is ±10%.Its actual costs for three months are as follows: April \ 520,000 May \ 550,000 June \ 575,000 What are the upper and lower control limits,respectively?

Direct materials ( 5 m5 \mathrm {~m}5 m of denim @$2@ \$ 2@$2 per metre) \quad$10\$ 10$10 Direct labour (3 hours @$6@ \$ 6@$6 per hour) \quad\quad\quad\quad\quad 18 -Refer to the Figure.What is Allan's materials usage variance?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Costvolumeprofit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Budgeting, production, cash, and Master Budget

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters

Direct materials ( 2 sheets of glass $(\$ 2$ per sheet) $\quad$ $\$ 4$ Direct labour (3 hours $@ \$ 8$ per hour) $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ 24 -Refer to the Figure.What is the journal entry to record the purchase of materials?

Direct materials ( $5 \mathrm {~m}$ of denim $@ \$ 2$ per metre) $\quad$ $\$ 10$ Direct labour (3 hours $@ \$ 6$ per hour) $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ 18 -Refer to the Figure.What is the entry to record the purchase of materials?

Direct materials ( $5 \mathrm {~m}$ of denim $@ \$ 2$ per metre) $\quad$ $\$ 10$ Direct labour (3 hours $@ \$ 6$ per hour) $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ 18 -Refer to the Figure.What is Allan's materials usage variance?