Question 1

Setting a new minimum standard is which step in the kaizen cycle of kaizen costing?

Accepted Answer

A) plan 
B) do 
C) check 
D) act 
A) plan 
B) do 
C) check 
D) act

Question 2

Warwick Company has the following information concerning its direct labour:
   A. Determine the labour rate variance and whether it is favourable or unfavourable.
B. Determine the labour efficiency variance and whether it is favourable or unfavourable.
C. Provide the journal entry for the labour variances.

Accepted Answer

The answer of Warwick Company has the following information concerning...

Question 3

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 4

During November,10,000 direct labour hours were worked at a standard cost of $10 per hour.Suppose the direct labour rate variance for November was $4,000 unfavourable.What was the actual cost per direct labour hour?

Accepted Answer

A) $9.20 
B) $9.60 
C) $10.00 
D) $10.40 
A) $9.20 
B) $9.60 
C) $10.00 
D) $10.40

Question 5

Aqua Company produces aquariums. During the year, 150,000 aquariums were produced. Materials and labour standards for producing the aquariums are as follows:
Aqua purchased and used 310,000 sheets of glass at $1.50 per sheet, and its actual labour hours were 435,000 hours at a wage rate of $8.50 per hour.
 $\begin{array}{lll}
\text {Direct materials ( 2 sheets of glass @$ \$ 2 $ per sheet) }&\$ 4\
\text { Direct labour (3 hours $ @ \$ 8 $ per hour)}&24\
\end{array}$

-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

Question 6

During March, a small roofing company purchased 700 bundles of a certain type of shingle at a price of $35 per bundle, $8 more than the standard price. The company's standard quantity of this type of shingles is 725 bundles.
-Refer to the Figure.What is the journal entry to record the issuance and usage of materials?

Accepted Answer

A) Work in Process 18,900Materials Usage Variance 675Materials 19,575 
B) Work in Process 19,575Materials Usage Variance 675Materials 18,900 
C) Work in Process 24,500Materials Usage Variance 875Materials 25,375 
D) Work in Process 25,375Materials Usage Variance 875Materials 24,500 
A) Work in Process 18,900Materials Usage Variance 675Materials 19,575 
B) Work in Process 19,575Materials Usage Variance 675Materials 18,900 
C) Work in Process 24,500Materials Usage Variance 875Materials 25,375 
D) Work in Process 25,375Materials Usage Variance 875Materials 24,500

Question 7

Which of the following is characteristic of direct labour variances?

Accepted Answer

A) The labour efficiency variance measures the difference between what was paid to direct labourers and what should have been paid. 
B) The labour rate and labour efficiency variances will always add up to the total labour variance. 
C) The labour rate variance measures the difference between the labour hours that were actually used and the labour hours that should have been used. 
D) The labour rate variance measures the difference between the labour hours that were originally budgeted and the labour hours that should have been used. 
A) The labour efficiency variance measures the difference between what was paid to direct labourers and what should have been paid. 
B) The labour rate and labour efficiency variances will always add up to the total labour variance. 
C) The labour rate variance measures the difference between the labour hours that were actually used and the labour hours that should have been used. 
D) The labour rate variance measures the difference between the labour hours that were originally budgeted and the labour hours that should have been used.

Question 8

Match each item with the correct statement below.
-This reflects the planned improvement that is set,which will help reduce non-value-added costs.

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 9

If a process-costing system uses standard costing to assign product costs,there is no need to compute a unit cost for each equivalent unit cost category since a standard unit cost would exist for each category.

Accepted Answer

A) True 
 B)False

Question 10

Suppose the actual labour rate exceeds the standard labour rate,and the actual labour hours exceed the number of hours allowed.What would be the labour rate variance and labour efficiency variance? Labour Rate Labour Efficiency
Variance Variance

Accepted Answer

A) favourable favourable 
B) favourable unfavourable 
C) unfavourable favourable 
D) unfavourable unfavourable 
A) favourable favourable 
B) favourable unfavourable 
C) unfavourable favourable 
D) unfavourable unfavourable

Question 11

What is target cost?

Accepted Answer

A) Expected sales per unit - desired profit per unit 
B) Expected costs per unit - desired profit per unit 
C) Desired profit per unit - expected costs per unit 
D) Desired costs per unit - expected costs per unit 
A) Expected sales per unit - desired profit per unit 
B) Expected costs per unit - desired profit per unit 
C) Desired profit per unit - expected costs per unit 
D) Desired costs per unit - expected costs per unit

Question 12

Which of the following provides both the production data needed to calculate the standard unit cost and the underlying details for the standard cost per unit?

Accepted Answer

A) the standard cost sheet 
B) the standard production budget 
C) the balance sheet 
D) the standard work-in-process account 
A) the standard cost sheet 
B) the standard production budget 
C) the balance sheet 
D) the standard work-in-process account

Question 13

Bear Company uses a standard costing system. The following information pertains to direct labour costs for the month of March:
 $$\begin{array} { l l } 
\text { Standard direct labour rate per hour } & \$ 15.00 \
\text { Actual direct labour rate per hour } & \$ 13.50 \
\text { Labour rate vari ance } & \$ 18,000 \text { favourable } \
\text { Actual output } & 1,000 \text { units } \
\text { Standard hours allowed for actual production } & 10,000 \text { hours }
\end{array}$$
-Refer to the Figure.What is the total labour budget variance for Bear Company?

Accepted Answer

A) $12,000 (U) 
B) $12,000 (F) 
C) $18,000 (U) 
D) $18,000 (F) 
A) $12,000 (U) 
B) $12,000 (F) 
C) $18,000 (U) 
D) $18,000 (F)

Question 14

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 15

Bi-land Company's standard cost is $150,000. The allowable deviation is ±10%. The actual costs for six months are as follows:
 $$\begin{array} { l r } 
\text { January } & \$ 135,000 \
\text { February } & 120,000 \
\text { March } & 145,000 \
\text { April } & 165,000 \
\text { May } & 170,000 \
\text { June } & 180,000
\end{array}$$
-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 16

Which formula is used to calculate the labour rate variance?

Accepted Answer

A) (actual rate × actual hours) − (standard rate × standard hours) 
B) (standard rate × actual rate) − (actual rate × actual hours) 
C) (actual rate × standard hours) − (standard rate × actual hours) 
D) (actual rate × actual hours) − (standard rate × actual hours) 
A) (actual rate × actual hours) − (standard rate × standard hours) 
B) (standard rate × actual rate) − (actual rate × actual hours) 
C) (actual rate × standard hours) − (standard rate × actual hours) 
D) (actual rate × actual hours) − (standard rate × actual hours)

Question 17

Aqua Company produces aquariums. During the year, 150,000 aquariums were produced. Materials and labour standards for producing the aquariums are as follows:
Aqua purchased and used 310,000 sheets of glass at $1.50 per sheet, and its actual labour hours were 435,000 hours at a wage rate of $8.50 per hour.
 $\begin{array}{lll}
\text {Direct materials ( 2 sheets of glass @$ \$ 2 $ per sheet) }&\$ 4\
\text { Direct labour (3 hours $ @ \$ 8 $ per hour)}&24\
\end{array}$

-Refer to the Figure.What is Aqua's total labour variance?

Accepted Answer

A) $97,500 U 
B) $97,500 F 
C) $120,000 U 
D) $217,000 F 
A) $97,500 U 
B) $97,500 F 
C) $120,000 U 
D) $217,000 F

Question 18

Serenity Equestrian Corporation produces high-quality leather saddles. The company has a standard cost system and has set the following standards for materials and labour:
During the year, Serenity Equestrian Corporation produced 150 saddles. Actual leather purchased was 3,100 strips at $12 per strip. There were no beginning or ending inventories of leather. Actual direct labour was 2,500 hours at $16 per hour.
 $\begin{array}{lll}
\text {Leather (20 strips@ $ \$ 15 $ per strip)}&\$300\
\text {Direct labour ( 15 hours $ @ \$ 15 $ per hour) }&225\
\text {Total prime cost  }&\$252\
\end{array}$

-Refer to the Figure.What are the labour rate variance and the labour efficiency variance,respectively?

Accepted Answer

A) $2,250 U and $4,000 U 
B) $2,250 F and $4,000 F 
C) $2,500 U and $3,750 U 
D) $2,500 F and $3,750 F 
A) $2,250 U and $4,000 U 
B) $2,250 F and $4,000 F 
C) $2,500 U and $3,750 U 
D) $2,500 F and $3,750 F

Question 19

Match each item with the correct statement below.
-This is the standard plus the allowable deviation when determining whether variances are significant.

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 20

The Fantastic Tool Company (Mexico Division) produced 100,000 saw blades during the year. Each saw blade required two hours of labour at a rate of $5.50 per hour. However, the company's standard labour rate is $5.00. Its labour efficiency variance was a favourable $55,000.
-Refer to the Figure.What is the journal entry to record both labour variances?

Accepted Answer

A) Work in Process 1,055,000Labour Rate Variance 100,000Labour Efficiency Variance 55,000Accrued Payroll 1,100,000 
B) Work in Process 1,055,000Labour Rate Variance 105,500Labour Efficiency Variance 55,000Accrued Payroll 1,105,500 
C) Work in Process 1,055,000Labour Rate Variance 96,875Labour Efficiency Variance 55,000Accrued Payroll 1,096,875 
D) Work in Process 1,055,000Labour Rate Variance 95,000Labour Efficiency Variance 55,000Accrued Payroll 1,095,000 
A) Work in Process 1,055,000Labour Rate Variance 100,000Labour Efficiency Variance 55,000Accrued Payroll 1,100,000 
B) Work in Process 1,055,000Labour Rate Variance 105,500Labour Efficiency Variance 55,000Accrued Payroll 1,105,500 
C) Work in Process 1,055,000Labour Rate Variance 96,875Labour Efficiency Variance 55,000Accrued Payroll 1,096,875 
D) Work in Process 1,055,000Labour Rate Variance 95,000Labour Efficiency Variance 55,000Accrued Payroll 1,095,000

Setting a new minimum standard is which step in the kaizen cycle of kaizen costing?

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

During November,10,000 direct labour hours were worked at a standard cost of $10 per hour.Suppose the direct labour rate variance for November was $4,000 unfavourable.What was the actual cost per direct labour hour?

Which of the following is characteristic of direct labour variances?

Match each item with the correct statement below. -This reflects the planned improvement that is set,which will help reduce non-value-added costs.

If a process-costing system uses standard costing to assign product costs,there is no need to compute a unit cost for each equivalent unit cost category since a standard unit cost would exist for each category.

Suppose the actual labour rate exceeds the standard labour rate,and the actual labour hours exceed the number of hours allowed.What would be the labour rate variance and labour efficiency variance? Labour Rate Labour Efficiency Variance Variance

What is target cost?

Which of the following provides both the production data needed to calculate the standard unit cost and the underlying details for the standard cost per unit?

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

Bi-land Company's standard cost is $150,000. The allowable deviation is ±10%. The actual costs for six months are as follows: 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 formula is used to calculate the labour rate variance?

Match each item with the correct statement below. -This is the standard plus the allowable deviation when determining whether variances are significant.

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

Setting a new minimum standard is which step in the kaizen cycle of kaizen costing?

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

During November,10,000 direct labour hours were worked at a standard cost of $10 per hour.Suppose the direct labour rate variance for November was $4,000 unfavourable.What was the actual cost per direct labour hour?

Which of the following is characteristic of direct labour variances?

Match each item with the correct statement below. -This reflects the planned improvement that is set,which will help reduce non-value-added costs.

If a process-costing system uses standard costing to assign product costs,there is no need to compute a unit cost for each equivalent unit cost category since a standard unit cost would exist for each category.

Suppose the actual labour rate exceeds the standard labour rate,and the actual labour hours exceed the number of hours allowed.What would be the labour rate variance and labour efficiency variance? Labour Rate Labour Efficiency Variance Variance

What is target cost?

Which of the following provides both the production data needed to calculate the standard unit cost and the underlying details for the standard cost per unit?

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

Which formula is used to calculate the labour rate variance?

Match each item with the correct statement below. -This is the standard plus the allowable deviation when determining whether variances are significant.

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