Question 1

Favourable variances are credits,and unfavourable variances are debits.

Accepted Answer

A) True 
 B)False

Question 2

Western Plastics Company has the following information concerning its direct materials: Direct Materials:
$\begin{array}{lr}
\text { Standard quantity } & 100,000 \
\text { Actual quantity } & 80,000 \
\text { Standard price } & \$ 3 \
\text { Actual price } & \$ 4
\end{array}$ A. Determine the materials price variance and whether it is favourable or unfavourable.
B. Determine the materials usage variance and whether it is favourable or unfavourable.
C. Western Plastics has set control limits stating that actual costs should be investigated if they fall outside the acceptable range of the standard materials cost $\pm 10 \%$.
i. What is the standard materials cost?
ii. What are the upper and lower control limits?
iii. What is the actual materials cost?
iv. Should the actual materials cost be investigated?

Accepted Answer

The answer of Western Plastics Company has the following information...

Question 3

Standard costs are developed for direct materials,direct labour,and variable overhead only.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following does NOT describe kaizen costing?

Accepted Answer

A)  It is concerned with reducing the costs of existing products and processes. 
B)  It tries to reduce both value-added and non-value-added costs. 
C)  The cost reduction process is accomplished through the repetitive use of the kaizen cycle and the maintenance cycle. 
D)  The kaizen standard reflects the planned improvement for the upcoming period. 
A)  It is concerned with reducing the costs of existing products and processes. 
B)  It tries to reduce both value-added and non-value-added costs. 
C)  The cost reduction process is accomplished through the repetitive use of the kaizen cycle and the maintenance cycle. 
D)  The kaizen standard reflects the planned improvement for the upcoming period.

Question 5

Refer to the Figure.Suppose the actual cost was $87 per kilogram and Risco purchased 27,500 kg of steel.All materials purchased were used.What was Risco's materials usage variance?

Accepted Answer

A)  $10,500 U 
B)  $10,500 F 
C)  $13,500 U 
D)  $13,500 F 
A)  $10,500 U 
B)  $10,500 F 
C)  $13,500 U 
D)  $13,500 F

Question 6

Fender Corporation produced 100 units of Product XX.The total standard and actual costs for materials and direct labour for the 100 units of Product XX are as follows:   What is the labour efficiency variance for Fender Corporation?

Accepted Answer

A)  $480 (U) 
B)  $480 (F) 
C)  $552 (U) 
D)  $552 (F) 
A)  $480 (U) 
B)  $480 (F) 
C)  $552 (U) 
D)  $552 (F)

Question 7

Green Lawn Corporation wants to produce a new lawnmower.The financial data is as follows: $$\begin{array} { l r } 
\text { Target price: } & \$ 450 \
\text { Target profit: } & \$ 75 \
\text { Estimated cost given current product and process designs: } & \$ 400
\end{array}$$ Other information:
1.Through reverse engineering,Green Lawn found a design improvement that would save $10 per unit.2.It also found that it could purchase a similar component of a different brand at a lower price,which would save $20 per unit.
-Refer to the Figure.What is Green Lawn's target cost?

Accepted Answer

A)  $225 
B)  $275 
C)  $300 
D)  $375 
A)  $225 
B)  $275 
C)  $300 
D)  $375

Question 8

Operating personnel can easily achieve standards set by engineering studies.

Accepted Answer

A) True 
 B)False

Question 9

How are standards developed?

Accepted Answer

Three potential sources of quantity stan

Question 10

During March,Raining Unlimited produced 5,500 umbrellas from nylon that costs $0.45 per metre,which is $0.05 per metre cheaper than the standard cost.It also used 3,000 direct labour hours at a rate of $6.50 per hour.Its direct materials standard is 1 m per umbrella.Its direct labour standard is 0.5 hour per umbrella.
Its materials usage variance was a favourable $500,and its labour rate variance was a favourable $900.

Accepted Answer

The answer of During March,Raining Unlimited produced 5,500 umbrellas from...

Question 11

Managers develop price standards when they determine what amount should be paid for the quantity of input to be used.

Accepted Answer

A) True 
 B)False

Question 12

-Refer to the Figure.What was AirSoar's total labour variance?

Accepted Answer

A)  $52,500 F 
B)  $55,000 F 
C)  $65,000 F 
D)  $67,500 F 
A)  $52,500 F 
B)  $55,000 F 
C)  $65,000 F 
D)  $67,500 F

Question 13

Which of the following statements is characteristic of target costing?

Accepted Answer

A)  It is a useful tool for establishing cost reduction goals for products in the design stage. 
B)  It is the difference between the sales price needed to capture a predetermined market share and the desired per-unit gross profit. 
C)  Target costs are internally driven. 
D)  The principal challenge of target costing is finding the cause of the costs. 
A)  It is a useful tool for establishing cost reduction goals for products in the design stage. 
B)  It is the difference between the sales price needed to capture a predetermined market share and the desired per-unit gross profit. 
C)  Target costs are internally driven. 
D)  The principal challenge of target costing is finding the cause of the costs.

Question 14

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 issuance and usage of materials?

Accepted Answer

A)  Work in Process 18,900
Materials Usage Variance 675
Materials 19,575 
B)  Work in Process 19,575
Materials Usage Variance 675
Materials 18,900 
C)  Work in Process 24,500
Materials Usage Variance 875
Materials 25,375 
D)  Work in Process 25,375
Materials Usage Variance 875
Materials 24,500 
A)  Work in Process 18,900
Materials Usage Variance 675
Materials 19,575 
B)  Work in Process 19,575
Materials Usage Variance 675
Materials 18,900 
C)  Work in Process 24,500
Materials Usage Variance 875
Materials 25,375 
D)  Work in Process 25,375
Materials Usage Variance 875
Materials 24,500

Question 15

Match each item with the correct statement below.
-Standards of perfection that require absolute efficiency.

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 16

Which of the following cost reduction methods is NOT typically used to move the actual cost to target cost?

Accepted Answer

A)  reverse engineering 
B)  value analysis 
C)  process improvement 
D)  forward engineering 
A)  reverse engineering 
B)  value analysis 
C)  process improvement 
D)  forward engineering

Question 17

Which of the following is NOT characteristic of variance investigation?

Accepted Answer

A)  The investigation should be undertaken only if the anticipated benefits are greater than the expected costs. 
B)  It is difficult to assess the costs and benefits of variance analysis on a case-by-case basis. 
C)  Variances are not investigated unless they are large enough to be of concern. 
D)  Every variance is investigated. 
A)  The investigation should be undertaken only if the anticipated benefits are greater than the expected costs. 
B)  It is difficult to assess the costs and benefits of variance analysis on a case-by-case basis. 
C)  Variances are not investigated unless they are large enough to be of concern. 
D)  Every variance is investigated.

Question 18

Refer to the Figure.At the end of December,Cakers Express found that it had a favourable materials price variance of $1,000.What is the flour's standard cost per kilogram?

Accepted Answer

A)  $0.95 
B)  $1.00 
C)  $1.05 
D)  $1.95 
A)  $0.95 
B)  $1.00 
C)  $1.05 
D)  $1.95

Question 19

Which of the following provides both the production data needed to calculate the standard unit cost and the underlying details for the standard cost per unit?

Accepted Answer

A)  the standard cost sheet 
B)  the standard production budget 
C)  the balance sheet 
D)  the standard work-in-process account 
A)  the standard cost sheet 
B)  the standard production budget 
C)  the balance sheet 
D)  the standard work-in-process account

Question 20

Which of the following is characteristic of direct labour variances?

Accepted Answer

A)  The labour efficiency variance measures the difference between what was paid to direct labourers and what should have been paid. 
B)  The labour rate and labour efficiency variances will always add up to the total labour variance. 
C)  The labour rate variance measures the difference between the labour hours that were actually used and the labour hours that should have been used. 
D)  The labour rate variance measures the difference between the labour hours that were originally budgeted and the labour hours that should have been used. 
A)  The labour efficiency variance measures the difference between what was paid to direct labourers and what should have been paid. 
B)  The labour rate and labour efficiency variances will always add up to the total labour variance. 
C)  The labour rate variance measures the difference between the labour hours that were actually used and the labour hours that should have been used. 
D)  The labour rate variance measures the difference between the labour hours that were originally budgeted and the labour hours that should have been used.

Favourable variances are credits,and unfavourable variances are debits.

Standard costs are developed for direct materials,direct labour,and variable overhead only.

Which of the following does NOT describe kaizen costing?

Refer to the Figure.Suppose the actual cost was $87 per kilogram and Risco purchased 27,500 kg of steel.All materials purchased were used.What was Risco's materials usage variance?

Fender Corporation produced 100 units of Product XX.The total standard and actual costs for materials and direct labour for the 100 units of Product XX are as follows: What is the labour efficiency variance for Fender Corporation?

Operating personnel can easily achieve standards set by engineering studies.

How are standards developed?

Managers develop price standards when they determine what amount should be paid for the quantity of input to be used.

-Refer to the Figure.What was AirSoar's total labour variance?

Which of the following statements is characteristic of target costing?

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 issuance and usage of materials?

Match each item with the correct statement below. -Standards of perfection that require absolute efficiency.

Which of the following cost reduction methods is NOT typically used to move the actual cost to target cost?

Which of the following is NOT characteristic of variance investigation?

Refer to the Figure.At the end of December,Cakers Express found that it had a favourable materials price variance of $1,000.What is the flour's standard cost per kilogram?

Which of the following provides both the production data needed to calculate the standard unit cost and the underlying details for the standard cost per unit?

Which of the following is characteristic of direct labour variances?

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

Favourable variances are credits,and unfavourable variances are debits.

Standard costs are developed for direct materials,direct labour,and variable overhead only.

Which of the following does NOT describe kaizen costing?

Refer to the Figure.Suppose the actual cost was $87 per kilogram and Risco purchased 27,500 kg of steel.All materials purchased were used.What was Risco's materials usage variance?

Fender Corporation produced 100 units of Product XX.The total standard and actual costs for materials and direct labour for the 100 units of Product XX are as follows: What is the labour efficiency variance for Fender Corporation?

Operating personnel can easily achieve standards set by engineering studies.

How are standards developed?

Managers develop price standards when they determine what amount should be paid for the quantity of input to be used.

-Refer to the Figure.What was AirSoar's total labour variance?

Which of the following statements is characteristic of target costing?

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 issuance and usage of materials?

Match each item with the correct statement below. -Standards of perfection that require absolute efficiency.

Which of the following cost reduction methods is NOT typically used to move the actual cost to target cost?

Which of the following is NOT characteristic of variance investigation?

Refer to the Figure.At the end of December,Cakers Express found that it had a favourable materials price variance of $1,000.What is the flour's standard cost per kilogram?

Which of the following provides both the production data needed to calculate the standard unit cost and the underlying details for the standard cost per unit?

Which of the following is characteristic of direct labour variances?

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 issuance and usage of materials?