Question 1

Why should historical experience be used with caution in a standard setting?

Accepted Answer

A)  Historical experience provides very rigorous guidelines. 
B)  Operating personnel may not be able to achieve operating standards based on historical experience. 
C)  Historical experience can perpetuate inefficiencies. 
D)  Standards based on historical experience are better than standards based on engineering studies. 
A)  Historical experience provides very rigorous guidelines. 
B)  Operating personnel may not be able to achieve operating standards based on historical experience. 
C)  Historical experience can perpetuate inefficiencies. 
D)  Standards based on historical experience are better than standards based on engineering studies.

Question 2

$$\begin{array} { l r } 
\text { January } & \$ 135,000 \
\text { February } & 120,000 \
\text { March } & 145,000 \
\text { April } & 165,000 \
\text { May } & 170,000 \
\text { June } & 180,000
\end{array}$$
-Refer to the Figure.What is the variance that is higher than the upper control limit?

Accepted Answer

A)  $135,000 
B)  $145,000 
C)  $150,000 
D)  $170,000 
A)  $135,000 
B)  $145,000 
C)  $150,000 
D)  $170,000

Question 3

Which of the following is NOT characteristic of engineering studies?

Accepted Answer

A)  They can determine the most efficient way to operate. 
B)  They are often achievable by operating personnel. 
C)  They provide very rigorous guidelines. 
D)  They are ideal standards. 
A)  They can determine the most efficient way to operate. 
B)  They are often achievable by operating personnel. 
C)  They provide very rigorous guidelines. 
D)  They are ideal standards.

Question 4

The actual quantity of input at the actual price less the actual quantity of input at the standard price is the price variance.

Accepted Answer

A) True 
 B)False

Question 5

-Refer to the Figure.What are the materials price variance and the materials usage variance,respectively?

Accepted Answer

A)  $9,000 U and $1,200 F 
B)  $9,000 F and $1,200 U 
C)  $9,300 U and $1,500 F 
D)  $9,300 F and $1,500 U 
A)  $9,000 U and $1,200 F 
B)  $9,000 F and $1,200 U 
C)  $9,300 U and $1,500 F 
D)  $9,300 F and $1,500 U

Question 6

Determine if the variance is favourable or unfavourable.
-Actual usage of inputs is greater than the standard usage.

Accepted Answer

A) Favourable variance 
B) Unfavourable variance 
A) Favourable variance 
B) Unfavourable variance

Question 7

The standard cost per unit of output for a particular input is calculated by multiplying the standard price per unit by the standard number of units produced.

Accepted Answer

A) True 
 B)False

Question 8

$$\begin{array} { l r } 
\text { January } & \$ 135,000 \
\text { February } & 120,000 \
\text { March } & 145,000 \
\text { April } & 165,000 \
\text { May } & 170,000 \
\text { June } & 180,000
\end{array}$$
-Refer to the Figure.What is the variance that is lower than the lower control limit?

Accepted Answer

A)  $120,000 
B)  $145,000 
C)  $170,000 
D)  $180,000 
A)  $120,000 
B)  $145,000 
C)  $170,000 
D)  $180,000

Question 9

Which department is responsible for setting price standards for materials and labour?

Accepted Answer

A)  Personnel must consider discounts,freight,and quality. 
B)  Purchasing must consider payroll taxes,fringe benefits,and qualifications. 
C)  It is the joint responsibility of operations,purchasing,personnel,and accounting. 
D)  Purchasing must consider the quantity of materials. 
A)  Personnel must consider discounts,freight,and quality. 
B)  Purchasing must consider payroll taxes,fringe benefits,and qualifications. 
C)  It is the joint responsibility of operations,purchasing,personnel,and accounting. 
D)  Purchasing must consider the quantity of materials.

Question 10

Which of the following is NOT an advantage of standard costing over normal costing and actual costing?

Accepted Answer

A)  provides a greater capacity for control 
B)  makes it easy to distinguish the FIFO and weighted average methods of accounting for beginning inventory costs 
C)  makes it unnecessary to compute a unit cost for each equivalent unit cost category 
D)  provides for readily available unit cost information 
A)  provides a greater capacity for control 
B)  makes it easy to distinguish the FIFO and weighted average methods of accounting for beginning inventory costs 
C)  makes it unnecessary to compute a unit cost for each equivalent unit cost category 
D)  provides for readily available unit cost information

Question 11

Currently attainable standards offer the most behavioural benefits because higher performance levels are attained through challenging,yet achievable,standards.

Accepted Answer

A) True 
 B)False

Question 12

A company using kaizen costing emphasizes which of the following?

Accepted Answer

A)  reducing non-value-added cost 
B)  reducing quality of inputs 
C)  increasing overhead costs 
D)  reducing the number of employees 
A)  reducing non-value-added cost 
B)  reducing quality of inputs 
C)  increasing overhead costs 
D)  reducing the number of employees

Question 13

Which of the following is NOT characteristic of the use of materials variance information?

Accepted Answer

A)  The production manager has the responsibility for controlling the materials price variance. 
B)  The production manager is generally responsible for materials usage. 
C)  The production manager is concerned with minimizing scrap,waste,and rework. 
D)  The purchasing department is responsible for acquiring quality materials. 
A)  The production manager has the responsibility for controlling the materials price variance. 
B)  The production manager is generally responsible for materials usage. 
C)  The production manager is concerned with minimizing scrap,waste,and rework. 
D)  The purchasing department is responsible for acquiring quality materials.

Question 14

Explain the kaizen approach to costing.

Accepted Answer

Kaizen costing focuses on the continuous

Why should historical experience be used with caution in a standard setting?

January \ 135,000 February 120,000 March 145,000 April 165,000 May 170,000 June 180,000 -Refer to the Figure.What is the variance that is higher than the upper control limit?

Which of the following is NOT characteristic of engineering studies?

The actual quantity of input at the actual price less the actual quantity of input at the standard price is the price variance.

-Refer to the Figure.What are the materials price variance and the materials usage variance,respectively?

Determine if the variance is favourable or unfavourable. -Actual usage of inputs is greater than the standard usage.

The standard cost per unit of output for a particular input is calculated by multiplying the standard price per unit by the standard number of units produced.

January \ 135,000 February 120,000 March 145,000 April 165,000 May 170,000 June 180,000 -Refer to the Figure.What is the variance that is lower than the lower control limit?

Which department is responsible for setting price standards for materials and labour?

Which of the following is NOT an advantage of standard costing over normal costing and actual costing?

Currently attainable standards offer the most behavioural benefits because higher performance levels are attained through challenging,yet achievable,standards.

A company using kaizen costing emphasizes which of the following?

Which of the following is NOT characteristic of the use of materials variance information?

Explain the kaizen approach to costing.

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

Why should historical experience be used with caution in a standard setting?

January \ 135,000 February 120,000 March 145,000 April 165,000 May 170,000 June 180,000 -Refer to the Figure.What is the variance that is higher than the upper control limit?

Which of the following is NOT characteristic of engineering studies?

The actual quantity of input at the actual price less the actual quantity of input at the standard price is the price variance.

-Refer to the Figure.What are the materials price variance and the materials usage variance,respectively?

Determine if the variance is favourable or unfavourable. -Actual usage of inputs is greater than the standard usage.

The standard cost per unit of output for a particular input is calculated by multiplying the standard price per unit by the standard number of units produced.

January \ 135,000 February 120,000 March 145,000 April 165,000 May 170,000 June 180,000 -Refer to the Figure.What is the variance that is lower than the lower control limit?

Which department is responsible for setting price standards for materials and labour?

Which of the following is NOT an advantage of standard costing over normal costing and actual costing?

Currently attainable standards offer the most behavioural benefits because higher performance levels are attained through challenging,yet achievable,standards.

A company using kaizen costing emphasizes which of the following?

Which of the following is NOT characteristic of the use of materials variance information?

Explain the kaizen approach to costing.

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