Question 1

The standard cost is how much a product should cost to manufacture.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A)  $36,000 unfavorable 
B)  $35,000 unfavorable 
C)  $23,000 favorable 
D)  $22,000 favorable 
A)  $36,000 unfavorable 
B)  $35,000 unfavorable 
C)  $23,000 favorable 
D)  $22,000 favorable

Question 3

Standard costs serve as a device for measuring efficiency.

Accepted Answer

A) True 
 B)False

Question 4

The materials quantity variance is

Accepted Answer

A)  63,000 favorable 
B)  63,000 unfavorable 
C)  59,400 favorable 
D)  59,400 unfavorable 
A)  63,000 favorable 
B)  63,000 unfavorable 
C)  59,400 favorable 
D)  59,400 unfavorable

Question 5

Favorable fixed factory overhead volume variances are never harmful,since achieving them encourages managers to run the factory above normal capacity.

Accepted Answer

A) True 
 B)False

Question 6

Periodic comparisons between planned objectives and actual performance are reported in:

Accepted Answer

A)  zero-base reports 
B)  budget performance reports 
C)  master budgets 
D)  budgets 
A)  zero-base reports 
B)  budget performance reports 
C)  master budgets 
D)  budgets

Question 7

The variance from standard for factory overhead resulting from incurring a total amount of factory overhead cost that is greater or less than the amount budgeted for the level of operations achieved is termed controllable variance.

Accepted Answer

A) True 
 B)False

Question 8

A favorable cost variance occurs when actual cost is less than budgeted cost at actual volumes.

Accepted Answer

A) True 
 B)False

Question 9

Since the controllable variance measures the efficiency of using variable overhead resources,if budgeted variable overhead exceeds actual results,the variance is favorable.

Accepted Answer

A) True 
 B)False

Question 10

What is the direct labor time variance?

Accepted Answer

A)  $7,700 favorable 
B)  $7,700 unfavorable 
C)  $11,200 unfavorable 
D)  $11,200 favorable 
A)  $7,700 favorable 
B)  $7,700 unfavorable 
C)  $11,200 unfavorable 
D)  $11,200 favorable

Question 11

An example of a nonfinancial measure is the number of customer complaints.

Accepted Answer

A) True 
 B)False

Question 12

A variable cost system is an accounting system where standards are set for each manufacturing cost element.

Accepted Answer

A) True 
 B)False

Question 13

The standard costs and actual costs for direct labor in the manufacture of 2,500 units of product are as follows: ​
  The direct labor time variance is

Accepted Answer

A)  $1,180 favorable 
B)  $1,140 unfavorable 
C)  $1,180 unfavorable 
D)  $1,140 favorable 
A)  $1,180 favorable 
B)  $1,140 unfavorable 
C)  $1,180 unfavorable 
D)  $1,140 favorable

Question 14

Standard costs are a useful management tool that can be used solely as a statistical device apart from the ledger or they can be incorporated in the accounts.

Accepted Answer

A) True 
 B)False

Question 15

Standard costs should always be revised when they differ from actual costs.

Accepted Answer

A) True 
 B)False

Question 16

The following data relate to direct labor costs for August: Actual costs: 5,500 hours at $24.00 per hour.
Standard costs: 5,000 hours at $23.70 per hour.
​
What is the direct labor rate variance?
​

Accepted Answer

A)  ​$1,650 favorable 
B)  ​$1,650 unfavorable 
C)  ​$1,500 favorable 
D)  ​$1,500 unfavorable 
A)  ​$1,650 favorable 
B)  ​$1,650 unfavorable 
C)  ​$1,500 favorable 
D)  ​$1,500 unfavorable

Question 17

The variable factory overhead controllable variance is

Accepted Answer

A)  $9,000 favorable 
B)  $9,000 unfavorable 
C)  $5,500 favorable 
D)  $5,500 unfavorable 
A)  $9,000 favorable 
B)  $9,000 unfavorable 
C)  $5,500 favorable 
D)  $5,500 unfavorable

Question 18

The controllable variance measures

Accepted Answer

A)  operating results at less than normal capacity 
B)  the efficiency of using variable overhead resources 
C)  operating results at more than normal capacity 
D)  control over fixed overhead costs 
A)  operating results at less than normal capacity 
B)  the efficiency of using variable overhead resources 
C)  operating results at more than normal capacity 
D)  control over fixed overhead costs

Question 19

Calculate the direct materials quantity variance.

Accepted Answer

A)  $4,512.50 unfavorable 
B)  $4,512.50 favorable 
C)  $4,750.00 unfavorable 
D)  $4,750.00 favorable 
A)  $4,512.50 unfavorable 
B)  $4,512.50 favorable 
C)  $4,750.00 unfavorable 
D)  $4,750.00 favorable

Question 20

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual was 800 units at $12,the direct materials price variance was $800 unfavorable.

Accepted Answer

A) True 
 B)False

Exam 22: Evaluating Variances From Standard Costs

The standard cost is how much a product should cost to manufacture.

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

Standard costs serve as a device for measuring efficiency.

The materials quantity variance is

Favorable fixed factory overhead volume variances are never harmful,since achieving them encourages managers to run the factory above normal capacity.

Periodic comparisons between planned objectives and actual performance are reported in:

The variance from standard for factory overhead resulting from incurring a total amount of factory overhead cost that is greater or less than the amount budgeted for the level of operations achieved is termed controllable variance.

A favorable cost variance occurs when actual cost is less than budgeted cost at actual volumes.

Since the controllable variance measures the efficiency of using variable overhead resources,if budgeted variable overhead exceeds actual results,the variance is favorable.

What is the direct labor time variance?

An example of a nonfinancial measure is the number of customer complaints.

A variable cost system is an accounting system where standards are set for each manufacturing cost element.

The standard costs and actual costs for direct labor in the manufacture of 2,500 units of product are as follows: ​ The direct labor time variance is

Standard costs are a useful management tool that can be used solely as a statistical device apart from the ledger or they can be incorporated in the accounts.

Standard costs should always be revised when they differ from actual costs.

The following data relate to direct labor costs for August: Actual costs: 5,500 hours at $24.00 per hour. Standard costs: 5,000 hours at $23.70 per hour. ​ What is the direct labor rate variance? ​

The variable factory overhead controllable variance is

The controllable variance measures

Calculate the direct materials quantity variance.

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual was 800 units at $12,the direct materials price variance was $800 unfavorable.

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 labor in the manufacture of 2,500 units of product are as follows: The direct labor time variance is

The following data relate to direct labor costs for August: Actual costs: 5,500 hours at $24.00 per hour. Standard costs: 5,000 hours at $23.70 per hour. What is the direct labor rate variance?