Question 1

The principle of exceptions allows managers to focus on correcting variances between

Accepted Answer

A)  standard costs and actual costs 
B)  variable costs and actual costs 
C)  competitor's costs and actual costs 
D)  competitor's costs and standard costs 
A)  standard costs and actual costs 
B)  variable costs and actual costs 
C)  competitor's costs and actual costs 
D)  competitor's costs and standard costs

Question 2

Standard costs are determined by multiplying expected price by expected quantity.

Accepted Answer

A) True 
 B)False

Question 3

Variances from standard costs are reported to

Accepted Answer

A)  suppliers 
B)  stockholders 
C)  management 
D)  creditors 
A)  suppliers 
B)  stockholders 
C)  management 
D)  creditors

Question 4

At the end of the fiscal year,variances from standard costs are usually transferred to the

Accepted Answer

A)  direct labor account 
B)  factory overhead account 
C)  cost of goods sold account 
D)  direct materials account 
A)  direct labor account 
B)  factory overhead account 
C)  cost of goods sold account 
D)  direct materials account

Question 5

Incurring actual indirect factory wages in excess of budgeted amounts for actual production results in a

Accepted Answer

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

Question 6

The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are ​​
  The amount of the direct materials quantity variance is

Accepted Answer

A)  $875 favorable variance 
B)  $850 unfavorable variance 
C)  $850 favorable variance 
D)  $875 unfavorable variance 
A)  $875 favorable variance 
B)  $850 unfavorable variance 
C)  $850 favorable variance 
D)  $875 unfavorable variance

Question 7

The labor rate variance is

Accepted Answer

A)  $4,920 unfavorable 
B)  $4,920 favorable 
C)  $4,560 favorable 
D)  $4,560 unfavorable 
A)  $4,920 unfavorable 
B)  $4,920 favorable 
C)  $4,560 favorable 
D)  $4,560 unfavorable

Question 8

Non-financial measures are often linked to the inputs or outputs of an activity or process.

Accepted Answer

A) True 
 B)False

Question 9

Volume variance measures the use of fixed factory overhead resources.

Accepted Answer

A) True 
 B)False

Question 10

The formula to the compute direct labor time variance is to calculate the difference between

Accepted Answer

A)  Actual costs - Standard costs 
B)  Actual costs + Standard costs 
C)  (Actual hours × Standard rate)- Standard costs 
D)  Actual costs - (Actual hours × Standard rate) 
A)  Actual costs - Standard costs 
B)  Actual costs + Standard costs 
C)  (Actual hours × Standard rate)- Standard costs 
D)  Actual costs - (Actual hours × Standard rate)

Question 11

What is the amount of the variable factory overhead controllable variance?

Accepted Answer

A)  $10,000 favorable 
B)  $2,500 unfavorable 
C)  $10,000 unfavorable 
D)  $2,500 favorable 
A)  $10,000 favorable 
B)  $2,500 unfavorable 
C)  $10,000 unfavorable 
D)  $2,500 favorable

Question 12

The following data is given for the Bahia Company: ​
  Overhead is applied on standard labor hours.
The fixed factory overhead volume variance is

Accepted Answer

A)  $65 unfavorable 
B)  $65favorable 
C)  $540 unfavorable 
D)  $540 favorable 
A)  $65 unfavorable 
B)  $65favorable 
C)  $540 unfavorable 
D)  $540 favorable

Question 13

A negative fixed overhead volume variance can be caused due to the following except

Accepted Answer

A)  sales orders at a low level 
B)  machine breakdowns 
C)  employee inexperience 
D)  increase in utility costs 
A)  sales orders at a low level 
B)  machine breakdowns 
C)  employee inexperience 
D)  increase in utility costs

Question 14

Accounting systems that use standards for product costs are called standard cost systems.

Accepted Answer

A) True 
 B)False

Question 15

A favorable cost variance occurs when

Accepted Answer

A)  actual costs are more than standard costs 
B)  standard costs are more than actual costs 
C)  standard costs are less than actual costs 
D)  actual costs are the same as standard costs 
A)  actual costs are more than standard costs 
B)  standard costs are more than actual costs 
C)  standard costs are less than actual costs 
D)  actual costs are the same as standard costs

Question 16

Though favorable fixed factory overhead volume variances are usually good news,if inventory levels are too high,additional production could be harmful.

Accepted Answer

A) True 
 B)False

Question 17

Nonfinancial performance output measures are used to improve the input measures.

Accepted Answer

A) True 
 B)False

Question 18

Calculate the total direct materials cost variance.

Accepted Answer

A)  $9,262.50 unfavorable 
B)  $9,262.50 favorable 
C)  $3,780.00 unfavorable 
D)  $3,562.50 favorable 
A)  $9,262.50 unfavorable 
B)  $9,262.50 favorable 
C)  $3,780.00 unfavorable 
D)  $3,562.50 favorable

Question 19

The formula to compute the direct labor rate variance is to calculate the difference between

Accepted Answer

A)  Actual costs + (Actual hours × Standard rate) 
B)  Actual costs - Standard cost 
C)  (Actual hours × Standard rate)- Standard costs 
D)  Actual costs - (Actual hours × Standard rate) 
A)  Actual costs + (Actual hours × Standard rate) 
B)  Actual costs - Standard cost 
C)  (Actual hours × Standard rate)- Standard costs 
D)  Actual costs - (Actual hours × Standard rate)

Question 20

Standard costs are used in companies for a variety of reasons.Which of the following is not one of the benefits for using standard costs?

Accepted Answer

A)  used to indicate where changes in technology and machinery need to be made 
B)  used to estimate cost of inventory 
C)  used to plan direct materials,direct labor,and variable factory overhead 
D)  used to control costs 
A)  used to indicate where changes in technology and machinery need to be made 
B)  used to estimate cost of inventory 
C)  used to plan direct materials,direct labor,and variable factory overhead 
D)  used to control costs

Exam 22: Evaluating Variances From Standard Costs

The principle of exceptions allows managers to focus on correcting variances between

Standard costs are determined by multiplying expected price by expected quantity.

Variances from standard costs are reported to

At the end of the fiscal year,variances from standard costs are usually transferred to the

Incurring actual indirect factory wages in excess of budgeted amounts for actual production results in a

The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are ​​ The amount of the direct materials quantity variance is

The labor rate variance is

Non-financial measures are often linked to the inputs or outputs of an activity or process.

Volume variance measures the use of fixed factory overhead resources.

The formula to the compute direct labor time variance is to calculate the difference between

What is the amount of the variable factory overhead controllable variance?

The following data is given for the Bahia Company: ​ Overhead is applied on standard labor hours. The fixed factory overhead volume variance is

A negative fixed overhead volume variance can be caused due to the following except

Accounting systems that use standards for product costs are called standard cost systems.

A favorable cost variance occurs when

Though favorable fixed factory overhead volume variances are usually good news,if inventory levels are too high,additional production could be harmful.

Nonfinancial performance output measures are used to improve the input measures.

Calculate the total direct materials cost variance.

The formula to compute the direct labor rate variance is to calculate the difference between

Standard costs are used in companies for a variety of reasons.Which of the following is not one of the benefits for using standard costs?

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 standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are The amount of the direct materials quantity variance is

The following data is given for the Bahia Company: Overhead is applied on standard labor hours. The fixed factory overhead volume variance is