Question 1

What formula is used to determine the usage variance?

Accepted Answer

A)  (AQ − SQ)SP 
B)  (SQ − AQ)SP 
C)  (AQ − AQ)SP 
D)  (SQ + AQ)SP 
A)  (AQ − SQ)SP 
B)  (SQ − AQ)SP 
C)  (AQ − AQ)SP 
D)  (SQ + AQ)SP

Question 2

A favourable usage variance would occur when the actual usage of inputs is greater than the standard usage.

Accepted Answer

A) True 
 B)False

Question 3

Match the variance with its correct calculation.
-Materials usage 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

Historical experience may provide an initial guideline for setting standards,but it should be used with caution.

Accepted Answer

A) True 
 B)False

Question 5

To compute the standard direct labour hours allowed,multiply the unit labour standard by the standard output.

Accepted Answer

A) True 
 B)False

Question 6

Match each item with the correct statement below.
-These reflect the amount of input that should be used per unit of output.

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 7

Why are standard cost systems adopted?

Accepted Answer

A)  to collect additional information 
B)  to increase efficiency in a just-in-time environment 
C)  to improve planning and control,and to facilitate product costing 
D)  to enhance the operational control of firms that emphasize continuous improvement 
A)  to collect additional information 
B)  to increase efficiency in a just-in-time environment 
C)  to improve planning and control,and to facilitate product costing 
D)  to enhance the operational control of firms that emphasize continuous improvement

Question 8

In general,who controls the use of labour in an organization?

Accepted Answer

A)  CEO 
B)  Human resources 
C)  Controller 
D)  Production manager 
A)  CEO 
B)  Human resources 
C)  Controller 
D)  Production manager

Question 9

Match each item with the correct statement below.
-A tool used to provide the production data needed to calculate the standard unit cost.

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 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 was Perfect Builders' labour rate variance?

Accepted Answer

A)  $240,000 U 
B)  $240,000 F 
C)  $280,000 U 
D)  $280,000 F 
A)  $240,000 U 
B)  $240,000 F 
C)  $280,000 U 
D)  $280,000 F

Question 11

To determine whether variances are significant,managers set control limits,which represent the acceptable range,plus or minus an allowable deviation.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is NOT characteristic of normal costing systems?

Accepted Answer

A)  A normal costing system predetermines overhead costs. 
B)  A normal costing system assigns direct materials and direct labour to products using a predetermined rate. 
C)  In a normal costing system,overhead is assigned using a budgeted rate and actual activity. 
D)  A normal costing system has less capacity for control than a standard costing system. 
A)  A normal costing system predetermines overhead costs. 
B)  A normal costing system assigns direct materials and direct labour to products using a predetermined rate. 
C)  In a normal costing system,overhead is assigned using a budgeted rate and actual activity. 
D)  A normal costing system has less capacity for control than a standard costing system.

Question 13

In kaizen costing,each period's Kaizen standard is based on prior periods' improvement,thereby locking in these improvements.

Accepted Answer

A) True 
 B)False

Question 14

Match the variance with its correct calculation.
-Total materials 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 15

The sum of the material price and material usage variances will add up to the total materials variance only if the materials purchased is equal to the materials used.

Accepted Answer

A) True 
 B)False

Question 16

Ponte Company produced 2,500 widgets during December using 4,000 units of materials at a cost of $5.00 each.It also used 5,000 direct labour hours at a rate of $7.00 per hour.Its direct materials standard is 2 units per widget.Its direct labour standard is 2.5 hours per widget.
Its materials price variance was a favourable $8,000,and its labour rate variance was an unfavourable $1,000.

Accepted Answer

The answer of Ponte Company produced 2,500 widgets during December...

Question 17

Which of the following statements is characteristic of control limits?

Accepted Answer

A)  Control limits are the top and bottom measures of the allowable range. 
B)  The upper control limit is the standard plus the allowable deviation. 
C)  The lower control limit is the standard minus the allowable deviation. 
D)  Control limits are set objectively using standard formulas. 
A)  Control limits are the top and bottom measures of the allowable range. 
B)  The upper control limit is the standard plus the allowable deviation. 
C)  The lower control limit is the standard minus the allowable deviation. 
D)  Control limits are set objectively using standard formulas.

Question 18

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 price variance?

Accepted Answer

A)  $30,000 U 
B)  $30,000 F 
C)  $31,250 U 
D)  $31,250 F 
A)  $30,000 U 
B)  $30,000 F 
C)  $31,250 U 
D)  $31,250 F

Question 19

Rayvo Company has the following information: $\begin{array}{lrlr}\text { Direct Materials: }&&\text { Direct Labour: }\
\text { Standard Quantity } & 100,000 & \text { Standard Hours } & 1,000 \
\text { Actual Quantity } & 99,500 & \text { Actual Hours } & 1,050 \
\text { Standard Price } & \$ 5 & \text { Standard Rate } & \$ 12 \
\text { Actual Price } & \$ 4 & \text { Actual Rate } & \$ 13
\end{array}$ 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.
E. Provide the journal entries to record the purchase of materials, the issuance and usage of materials, and direct labour variances.
F. Provide the closing entries for the immaterial variances.

Accepted Answer

@#IMG-DLM& Since the materials price var

Question 20

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 Aqua's labour rate variance?

Accepted Answer

A)  $97,500 U 
B)  $217,500 U 
C)  $217,500 F 
D)  $225,000 U 
A)  $97,500 U 
B)  $217,500 U 
C)  $217,500 F 
D)  $225,000 U

What formula is used to determine the usage variance?

A favourable usage variance would occur when the actual usage of inputs is greater than the standard usage.

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

Historical experience may provide an initial guideline for setting standards,but it should be used with caution.

To compute the standard direct labour hours allowed,multiply the unit labour standard by the standard output.

Match each item with the correct statement below. -These reflect the amount of input that should be used per unit of output.

Why are standard cost systems adopted?

In general,who controls the use of labour in an organization?

Match each item with the correct statement below. -A tool used to provide the production data needed to calculate the standard unit 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 was Perfect Builders' labour rate variance?

To determine whether variances are significant,managers set control limits,which represent the acceptable range,plus or minus an allowable deviation.

Which of the following is NOT characteristic of normal costing systems?

In kaizen costing,each period's Kaizen standard is based on prior periods' improvement,thereby locking in these improvements.

Match the variance with its correct calculation. -Total materials variance

The sum of the material price and material usage variances will add up to the total materials variance only if the materials purchased is equal to the materials used.

Which of the following statements is characteristic of control limits?

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 price 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 is Aqua's labour rate 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

What formula is used to determine the usage variance?

A favourable usage variance would occur when the actual usage of inputs is greater than the standard usage.

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

Historical experience may provide an initial guideline for setting standards,but it should be used with caution.

To compute the standard direct labour hours allowed,multiply the unit labour standard by the standard output.

Match each item with the correct statement below. -These reflect the amount of input that should be used per unit of output.

Why are standard cost systems adopted?

In general,who controls the use of labour in an organization?

Match each item with the correct statement below. -A tool used to provide the production data needed to calculate the standard unit 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 was Perfect Builders' labour rate variance?

To determine whether variances are significant,managers set control limits,which represent the acceptable range,plus or minus an allowable deviation.

Which of the following is NOT characteristic of normal costing systems?

In kaizen costing,each period's Kaizen standard is based on prior periods' improvement,thereby locking in these improvements.

Match the variance with its correct calculation. -Total materials variance

The sum of the material price and material usage variances will add up to the total materials variance only if the materials purchased is equal to the materials used.

Which of the following statements is characteristic of control limits?

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 price variance?

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 Aqua's labour rate 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 was Perfect Builders' 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 Allan's materials price 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 is Aqua's labour rate variance?