Question 1

The amount of the variable factory overhead controllable variance is

Accepted Answer

A)  $2,000 unfavorable 
B)  $3,000 favorable 
C)  $0 
D)  $3,000 unfavorable 
A)  $2,000 unfavorable 
B)  $3,000 favorable 
C)  $0 
D)  $3,000 unfavorable D

Question 2

Calculate the total direct labor variance.

Accepted Answer

A)  $2,051.25 favorable 
B)  $2,051.25 unfavorable 
C)  $2,362.50 unfavorable 
D)  $2,362.50 favorable 
A)  $2,051.25 favorable 
B)  $2,051.25 unfavorable 
C)  $2,362.50 unfavorable 
D)  $2,362.50 favorable A

Question 3

If the actual quantity of direct materials used in producing a commodity differs from the standard quantity,the variance is a

Accepted Answer

A)  controllable variance 
B)  price variance 
C)  quantity variance 
D)  rate variance 
A)  controllable variance 
B)  price variance 
C)  quantity variance 
D)  rate variance C

Question 4

An unfavorable fixed factory overhead volume variance may be due to a failure of supervisors to maintain an even flow of work.

Accepted Answer

A) True 
 B)False

Question 5

At the end of the fiscal year,the variances from standard are usually transferred to the finished goods account.

Accepted Answer

A) True 
 B)False

Question 6

The following data relate to direct labor costs for the current period: ​
  What is the direct labor time variance?

Accepted Answer

A)  $18,000 favorable 
B)  $18,000 unfavorable 
C)  $17,550 unfavorable 
D)  $17,550 favorable 
A)  $18,000 favorable 
B)  $18,000 unfavorable 
C)  $17,550 unfavorable 
D)  $17,550 favorable

Question 7

Which of the following is not a reason for a direct materials quantity variance?

Accepted Answer

A)  malfunctioning equipment 
B)  purchasing of inferior raw materials 
C)  increased material cost per unit 
D)  spoilage of materials 
A)  malfunctioning equipment 
B)  purchasing of inferior raw materials 
C)  increased material cost per unit 
D)  spoilage of materials

Question 8

The formula to compute the direct material quantity variance is to calculate the difference between

Accepted Answer

A)  Actual costs - Standard costs 
B)  Standard costs - Actual costs 
C)  (Actual quantity × Standard price)- Standard costs 
D)  Actual costs - (Standard price × Standard costs) 
A)  Actual costs - Standard costs 
B)  Standard costs - Actual costs 
C)  (Actual quantity × Standard price)- Standard costs 
D)  Actual costs - (Standard price × Standard costs)

Question 9

The amount of the fixed factory overhead volume variance is

Accepted Answer

A)  $2,000 favorable 
B)  $2,000 unfavorable 
C)  $2,500 unfavorable 
D)  $0 
A)  $2,000 favorable 
B)  $2,000 unfavorable 
C)  $2,500 unfavorable 
D)  $0

Question 10

Assuming that the standard fixed overhead rate is based on full capacity,the cost of available but unused productive capacity is indicated by the

Accepted Answer

A)  fixed factory overhead volume variance 
B)  direct labor time variance 
C)  direct labor rate variance 
D)  variable factory overhead controllable variance 
A)  fixed factory overhead volume variance 
B)  direct labor time variance 
C)  direct labor rate variance 
D)  variable factory overhead controllable variance

Question 11

The variance from standard for factory overhead cost resulting from operating at a level above or below 100% of normal capacity is termed volume variance.

Accepted Answer

A) True 
 B)False

Question 12

Standards that represent levels of operation that can be attained with reasonable effort are called

Accepted Answer

A)  theoretical standards 
B)  ideal standards 
C)  variable standards 
D)  normal standards 
A)  theoretical standards 
B)  ideal standards 
C)  variable standards 
D)  normal standards

Question 13

Normally,standard costs should be revised when labor rates change to incorporate new union contracts.

Accepted Answer

A) True 
 B)False

Question 14

Standards are more widely used for nonmanufacturing activities than for manufacturing activities.

Accepted Answer

A) True 
 B)False

Question 15

If the wage rate paid per hour differs from the standard wage rate per hour for direct labor,the variance is a

Accepted Answer

A)  variable variance 
B)  rate variance 
C)  quantity variance 
D)  volume variance 
A)  variable variance 
B)  rate variance 
C)  quantity variance 
D)  volume variance

Question 16

A company records its inventory purchases at standard cost but also records purchase price variances.The company purchased 5,000 widgets at $8.00 each,and the standard cost for the widgets is $7.60.Which of the following would be included in the journal entry?

Accepted Answer

A)  debit Accounts Payable,$38,000 
B)  credit Direct Materials Price Variance,$2,000 
C)  debit Accounts Payable,$2,000 
D)  debit Direct Materials Price Variance,$2,000 
A)  debit Accounts Payable,$38,000 
B)  credit Direct Materials Price Variance,$2,000 
C)  debit Accounts Payable,$2,000 
D)  debit Direct Materials Price Variance,$2,000

Question 17

If the standard to produce a given amount of product is 600 direct labor hours at $15 and the actual was 600 hours at $17,the rate variance was $1,200 unfavorable.

Accepted Answer

A) True 
 B)False

Question 18

The difference between the standard cost of a product and its actual cost is called a variance.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following would not lend itself to applying direct labor variances?

Accepted Answer

A)  help desk assistant 
B)  research and development scientist 
C)  customer service personnel 
D)  telemarketer 
A)  help desk assistant 
B)  research and development scientist 
C)  customer service personnel 
D)  telemarketer

Question 20

Standards are designed to evaluate price and quantity variances separately.

Accepted Answer

A) True 
 B)False

Exam 22: Evaluating Variances From Standard Costs

The amount of the variable factory overhead controllable variance is

Calculate the total direct labor variance.

If the actual quantity of direct materials used in producing a commodity differs from the standard quantity,the variance is a

An unfavorable fixed factory overhead volume variance may be due to a failure of supervisors to maintain an even flow of work.

At the end of the fiscal year,the variances from standard are usually transferred to the finished goods account.

The following data relate to direct labor costs for the current period: ​ What is the direct labor time variance?

Which of the following is not a reason for a direct materials quantity variance?

The formula to compute the direct material quantity variance is to calculate the difference between

The amount of the fixed factory overhead volume variance is

Assuming that the standard fixed overhead rate is based on full capacity,the cost of available but unused productive capacity is indicated by the

The variance from standard for factory overhead cost resulting from operating at a level above or below 100% of normal capacity is termed volume variance.

Standards that represent levels of operation that can be attained with reasonable effort are called

Normally,standard costs should be revised when labor rates change to incorporate new union contracts.

Standards are more widely used for nonmanufacturing activities than for manufacturing activities.

If the wage rate paid per hour differs from the standard wage rate per hour for direct labor,the variance is a

A company records its inventory purchases at standard cost but also records purchase price variances.The company purchased 5,000 widgets at $8.00 each,and the standard cost for the widgets is $7.60.Which of the following would be included in the journal entry?

If the standard to produce a given amount of product is 600 direct labor hours at $15 and the actual was 600 hours at $17,the rate variance was $1,200 unfavorable.

The difference between the standard cost of a product and its actual cost is called a variance.

Which of the following would not lend itself to applying direct labor variances?

Standards are designed to evaluate price and quantity variances separately.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current,installment Notes,and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

Filters

The following data relate to direct labor costs for the current period: What is the direct labor time variance?