Question 1

Match each item with the correct statement below.
-These reflect the amount that should be paid for the quantity of input to be used.

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 2

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 labour rate variance?

Accepted Answer

A)  $90,625 U 
B)  $90,625 F 
C)  $93,750 U 
D)  $93,750 F 
A)  $90,625 U 
B)  $90,625 F 
C)  $93,750 U 
D)  $93,750 F

Question 3

Match the variance with its correct calculation.
-Labour rate variance

Accepted Answer

A) Actual quantity × actual price 
B) (Actual hours × actual rate)− (standard hours × standard rate) 
C) (Actual quantity × actual price)− (standard quantity × standard price) 
D) (Actual hours − standard hours)× standard rate 
E) (Actual price − standard price)× actual quantity
F)Standard quantity × standard price
G)(Actual rate − standard rate)× actual hours
H)(Actual quantity − standard quantity)× standard price 
A) Actual quantity × actual price 
B) (Actual hours × actual rate)− (standard hours × standard rate) 
C) (Actual quantity × actual price)− (standard quantity × standard price) 
D) (Actual hours − standard hours)× standard rate 
E) (Actual price − standard price)× actual quantity
F)Standard quantity × standard price
G)(Actual rate − standard rate)× actual hours
H)(Actual quantity − standard quantity)× standard price

Question 4

Match the variance with its correct calculation.
-Materials price variance

Accepted Answer

A) Actual quantity × actual price 
B) (Actual hours × actual rate)− (standard hours × standard rate) 
C) (Actual quantity × actual price)− (standard quantity × standard price) 
D) (Actual hours − standard hours)× standard rate 
E) (Actual price − standard price)× actual quantity
F)Standard quantity × standard price
G)(Actual rate − standard rate)× actual hours
H)(Actual quantity − standard quantity)× standard price 
  
A) Actual quantity × actual price 
B) (Actual hours × actual rate)− (standard hours × standard rate) 
C) (Actual quantity × actual price)− (standard quantity × standard price) 
D) (Actual hours − standard hours)× standard rate 
E) (Actual price − standard price)× actual quantity
F)Standard quantity × standard price
G)(Actual rate − standard rate)× actual hours
H)(Actual quantity − standard quantity)× standard price

Question 5

Acting Company has the following information: $\begin{array} { l r l r } \text { Direct Materials: }&&\text { Direct Labour: }\\text { Standard Quantity } & 11,000 & \text { Standard Hours } & 3,000 \ \text { Actual Quantity } & 13,000 & \text { Actual Hours } & 2,875 \ \text { Standard Price } & \$ 15 & \text { Standard Rate } & \$ 12 \ \text { Actual Price } & \$ 13 & \text { Actual Rate } & \$ 13 \end{array}$ 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. 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 Acting Company has the following information: \(\begin{array}...

Question 6

Match the variance with its correct calculation.
-Budgeted costs

Accepted Answer

A) Actual quantity × actual price 
B) (Actual hours × actual rate)− (standard hours × standard rate) 
C) (Actual quantity × actual price)− (standard quantity × standard price) 
D) (Actual hours − standard hours)× standard rate 
E) (Actual price − standard price)× actual quantity
F)Standard quantity × standard price
G)(Actual rate − standard rate)× actual hours
H)(Actual quantity − standard quantity)× standard price 
A) Actual quantity × actual price 
B) (Actual hours × actual rate)− (standard hours × standard rate) 
C) (Actual quantity × actual price)− (standard quantity × standard price) 
D) (Actual hours − standard hours)× standard rate 
E) (Actual price − standard price)× actual quantity
F)Standard quantity × standard price
G)(Actual rate − standard rate)× actual hours
H)(Actual quantity − standard quantity)× standard price

Question 7

During August,40,000 units were produced.The standard quantity of material allowed per unit was 5 kg at a standard cost of $2.50 per kilogram.Suppose the company had a favourable usage variance of $25,000 for August.What would have been the actual quantity of materials used?

Accepted Answer

A)  95,000 
B)  105,000 
C)  190,000 
D)  210,000 
A)  95,000 
B)  105,000 
C)  190,000 
D)  210,000

Question 8

Which of the following is characteristic of variances?

Accepted Answer

A)  An unfavourable labour efficiency variance could result from using higher quality materials that result in fewer inspections. 
B)  A favourable labour rate variance could result from lower wage workers quitting. 
C)  A favourable materials price variance could result from purchasing identical materials from another supplier at a lower price. 
D)  A favourable materials usage variance could result from not efficiently utilizing raw materials,thus causing waste. 
A)  An unfavourable labour efficiency variance could result from using higher quality materials that result in fewer inspections. 
B)  A favourable labour rate variance could result from lower wage workers quitting. 
C)  A favourable materials price variance could result from purchasing identical materials from another supplier at a lower price. 
D)  A favourable materials usage variance could result from not efficiently utilizing raw materials,thus causing waste.

Question 9

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 direct labour variances?

Accepted Answer

A)  Work in Process 2,265,625
Labour Efficiency Variance 75,000
Labour Rate Variance 90,625
Accrued Payroll 2,250,000 
B)  Work in Process 2,250,000
Labour Rate Variance 90,625
Labour Efficiency Variance 75,000
Accrued Payroll 2,265,625 
C)  Work in Process 2,250,000
Labour Rate Variance 93,750
Labour Efficiency Variance 78,125
Accrued Payroll 2,265,625 
D)  Work in Process 2,265,625
Labour Efficiency Variance 78,125
Labour Rate Variance 93,750
Accrued Payroll 2,250,000 
A)  Work in Process 2,265,625
Labour Efficiency Variance 75,000
Labour Rate Variance 90,625
Accrued Payroll 2,250,000 
B)  Work in Process 2,250,000
Labour Rate Variance 90,625
Labour Efficiency Variance 75,000
Accrued Payroll 2,265,625 
C)  Work in Process 2,250,000
Labour Rate Variance 93,750
Labour Efficiency Variance 78,125
Accrued Payroll 2,265,625 
D)  Work in Process 2,265,625
Labour Efficiency Variance 78,125
Labour Rate Variance 93,750
Accrued Payroll 2,250,000

Question 10

Ideal standards allow for machine breakdowns,slack,or momentary lack of skill.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is NOT characteristic of direct materials variances?

Accepted Answer

A)  The sum of the price and usage variances will add up to the total materials variance only if the materials purchased is equal to the materials used. 
B)  The materials price variance uses the actual quantity of materials purchased rather than the actual quantity of materials used. 
C)  The materials price variance always uses the actual quantity of materials used rather than the actual quantity of materials purchased. 
D)  The materials usage variance uses the actual quantity of materials used. 
A)  The sum of the price and usage variances will add up to the total materials variance only if the materials purchased is equal to the materials used. 
B)  The materials price variance uses the actual quantity of materials purchased rather than the actual quantity of materials used. 
C)  The materials price variance always uses the actual quantity of materials used rather than the actual quantity of materials purchased. 
D)  The materials usage variance uses the actual quantity of materials used.

Question 12

Of the three cost reduction methods typically used,reverse engineering tears down the competitors' products to discover more design features that create cost reductions.

Accepted Answer

A) True 
 B)False

Question 13

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 materials usage variance?

Accepted Answer

A)  $15,000 U 
B)  $20,000 U 
C)  $135,000 U 
D)  $170,000 U 
A)  $15,000 U 
B)  $20,000 U 
C)  $135,000 U 
D)  $170,000 U

Question 14

During November,10,000 direct labour hours were worked at a standard cost of $10 per hour.Suppose the direct labour rate variance for November was $4,000 unfavourable.What was the actual cost per direct labour hour?

Accepted Answer

A)  $9.20 
B)  $9.60 
C)  $10.00 
D)  $10.40 
A)  $9.20 
B)  $9.60 
C)  $10.00 
D)  $10.40

Question 15

The standard cost sheet provides the input standards needed to compute the total amount of inputs allowed for the actual output,an essential component in computing efficiency variances.

Accepted Answer

A) True 
 B)False

Question 16

Bronze Brick Company uses the following rule to determine whether materials usage variances should be investigated:
A materials usage variance will be investigated when the variance is greater than either $5,000 or 12% of the standard cost.
During May,the company purchased and used 11,000 kg of concrete for $5 per kilogram.It was able to make 20,000 bricks.Its standard quantity of materials allowed is 0.50 kg of concrete per brick at a standard price of $6.50 per kilogram. A. Determine Bronze's material usage variance and whether it is favourable or unfavourable.
B. Should the variance be investigated?

Accepted Answer

The answer of Bronze Brick Company uses the following rule...

Question 17

Setting a new minimum standard is which step in the kaizen cycle of kaizen costing?

Accepted Answer

A)  plan 
B)  do 
C)  check 
D)  act 
A)  plan 
B)  do 
C)  check 
D)  act

Question 18

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 are Fantastic's standard hours allowed for a volume of 100,000 blades?

Accepted Answer

A)  189,000 hours 
B)  190,000 hours 
C)  210,000 hours 
D)  211,000 hours 
A)  189,000 hours 
B)  190,000 hours 
C)  210,000 hours 
D)  211,000 hours

Question 19

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 Fantastic's labour rate variance?

Accepted Answer

A)  $95,000 U 
B)  $96,875 U 
C)  $100,000 U 
D)  $105,500 U 
A)  $95,000 U 
B)  $96,875 U 
C)  $100,000 U 
D)  $105,500 U

Question 20

What are price standards based on?

Accepted Answer

A)  the amount that should be used per unit of output 
B)  the amount that should be paid for the total quantity of input to be used 
C)  the amount that should be paid per unit of output 
D)  the amount that should be paid per unit of input purchased 
A)  the amount that should be used per unit of output 
B)  the amount that should be paid for the total quantity of input to be used 
C)  the amount that should be paid per unit of output 
D)  the amount that should be paid per unit of input purchased

Match each item with the correct statement below. -These reflect the amount that should be paid for the quantity of input to be used.

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 labour rate variance?

Match the variance with its correct calculation. -Labour rate variance

Match the variance with its correct calculation. -Materials price variance

Match the variance with its correct calculation. -Budgeted costs

During August,40,000 units were produced.The standard quantity of material allowed per unit was 5 kg at a standard cost of $2.50 per kilogram.Suppose the company had a favourable usage variance of $25,000 for August.What would have been the actual quantity of materials used?

Which of the following is characteristic of variances?

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 direct labour variances?

Ideal standards allow for machine breakdowns,slack,or momentary lack of skill.

Which of the following is NOT characteristic of direct materials variances?

Of the three cost reduction methods typically used,reverse engineering tears down the competitors' products to discover more design features that create cost reductions.

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 materials usage variance?

During November,10,000 direct labour hours were worked at a standard cost of $10 per hour.Suppose the direct labour rate variance for November was $4,000 unfavourable.What was the actual cost per direct labour hour?

The standard cost sheet provides the input standards needed to compute the total amount of inputs allowed for the actual output,an essential component in computing efficiency variances.

Setting a new minimum standard is which step in the kaizen cycle of kaizen 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 are Fantastic's standard hours allowed for a volume of 100,000 blades?

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 Fantastic's labour rate variance?

What are price standards based on?

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

Match each item with the correct statement below. -These reflect the amount that should be paid for the quantity of input to be used.

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 labour rate variance?

Match the variance with its correct calculation. -Labour rate variance

Match the variance with its correct calculation. -Materials price variance

Match the variance with its correct calculation. -Budgeted costs

During August,40,000 units were produced.The standard quantity of material allowed per unit was 5 kg at a standard cost of $2.50 per kilogram.Suppose the company had a favourable usage variance of $25,000 for August.What would have been the actual quantity of materials used?

Which of the following is characteristic of variances?

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 direct labour variances?

Ideal standards allow for machine breakdowns,slack,or momentary lack of skill.

Which of the following is NOT characteristic of direct materials variances?

Of the three cost reduction methods typically used,reverse engineering tears down the competitors' products to discover more design features that create cost reductions.

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 materials usage variance?

During November,10,000 direct labour hours were worked at a standard cost of $10 per hour.Suppose the direct labour rate variance for November was $4,000 unfavourable.What was the actual cost per direct labour hour?

The standard cost sheet provides the input standards needed to compute the total amount of inputs allowed for the actual output,an essential component in computing efficiency variances.

Setting a new minimum standard is which step in the kaizen cycle of kaizen 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 are Fantastic's standard hours allowed for a volume of 100,000 blades?

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 Fantastic's labour rate variance?

What are price standards based on?

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 ( $5 \mathrm {~m}$ 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 labour rate variance?

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 direct labour variances?

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 materials usage variance?

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 are Fantastic's standard hours allowed for a volume of 100,000 blades?

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 Fantastic's labour rate variance?