Question 1

Which of the following is characteristic of the disposition of materials and labour variances?

Accepted Answer

A) The variances for materials and labour are closed directly to cost of goods sold regardless of materiality. 
B) If the materials price variance is material, it is prorated among materials inventory, materials usage variance, work in process, and finished goods. 
C) The materials usage variance and the labour variances, if material, are prorated among work in process, finished goods, and cost of goods sold. 
D) The materials usage variance and the labour variances are prorated among work in process, finished goods, and cost of goods sold. 
A) The variances for materials and labour are closed directly to cost of goods sold regardless of materiality. 
B) If the materials price variance is material, it is prorated among materials inventory, materials usage variance, work in process, and finished goods. 
C) The materials usage variance and the labour variances, if material, are prorated among work in process, finished goods, and cost of goods sold. 
D) The materials usage variance and the labour variances are prorated among work in process, finished goods, and cost of goods sold.

Question 2

During the month of December, Cakers Express purchased 20,000 kg of flour at $2 per kilogram.
-Refer to the Figure.At the end of December,Cakers Express found that it had an unfavourable materials price variance of $1,000.What is the flour's standard cost per kilogram?

Accepted Answer

A) $0.95 
B) $1.00 
C) $1.05 
D) $1.95 
A) $0.95 
B) $1.00 
C) $1.05 
D) $1.95

Question 3

Kaizen costing focuses on the continuous reduction of manufacturing costs of existing products and processes.

Accepted Answer

A) True 
 B)False

Question 4

Jersey Company produced 1,000 trash cans during April using 450 direct labour hours and 3,100 kg of rubber.Its materials and labour standards are as follows:
Its materials price variance was a favourable $620 and its labour rate variance was an unfavourable $900.
 $\begin{array}{lr}
\text { Direct materials ( } 3 \mathrm{~kg} \text { of rubber } @ \$ 0.50 \text { per kilogram) } & \$ 1.50 \
\text { Direct labour }(0.5 \text { hours } @ \$ 16.00 \text { per hour) } & 3.00
\end{array}$ A. Calculate the actual price per unit.
B. Calculate the actual labour rate.
C. Determine the materials usage variance and whether it is favourable or unfavourable.
D. Determine the labour efficiency variance and whether it is favourable or unfavourable.

Accepted Answer

The answer of Jersey Company produced 1,000 trash cans during...

Question 5

The sum of the material price and material usage variances will add up to the total materials variance only if the materials purchased is equal to the materials used.

Accepted Answer

A) True 
 B)False

Question 6

To determine whether variances are significant,managers set control limits,which represent the acceptable range,plus or minus an allowable deviation.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) The actual wage rate is almost always different from the standard rate. 
B) Unexpected overtime can cause variation in the labour rate. 
C) An average wage rate is chosen as the labour rate standard. 
D) The production manager controls the use of labour. 
A) The actual wage rate is almost always different from the standard rate. 
B) Unexpected overtime can cause variation in the labour rate. 
C) An average wage rate is chosen as the labour rate standard. 
D) The production manager controls the use of labour.

Question 8

Which of the following standards are based on the amount of input that should be used per unit of output?

Accepted Answer

A) quantity standards 
B) price standards 
C) ideal standards 
D) kaizen standards 
A) quantity standards 
B) price standards 
C) ideal standards 
D) kaizen standards

Question 9

During March,6,000 direct labour hours were worked at a standard cost of $22 per hour.Suppose the direct labour rate variance for March was $16,500 favourable.What was the actual cost per direct labour hour?

Accepted Answer

A) $17.50 
B) $20.00 
C) $22.50 
D) $25.00 
A) $17.50 
B) $20.00 
C) $22.50 
D) $25.00

Question 10

Allan Company manufactures overalls. During the year, it manufactured 125,000 overalls, using 2.9 hours of direct labour at a rate of $6.25 per hour. The materials and labour standards for manufacturing the overalls are as follows:
Allan required 600,000 m at $1.95 per metre to make the 125,000 overalls.
 $\begin{array}{lll}
\text {Direct materials ( $ 5 \mathrm{~m} $ of denim $ (012 $ per metre) }&\$10\
\text { Direct labour (3 hours $ @ \$ 6 $ per hour)}&18\\end{array}$

-Refer to the Figure.What is the entry to record the direct labour variances?

Accepted Answer

A) Work in Process 2,265,625Labour Efficiency Variance 75,000Labour Rate Variance 90,625Accrued Payroll 2,250,000 
B) Work in Process 2,250,000Labour Rate Variance 90,625Labour Efficiency Variance 75,000Accrued Payroll 2,265,625 
C) Work in Process 2,250,000Labour Rate Variance 93,750Labour Efficiency Variance 78,125Accrued Payroll 2,265,625 
D) Work in Process 2,265,625Labour Efficiency Variance 78,125Labour Rate Variance 93,750Accrued Payroll 2,250,000 
A) Work in Process 2,265,625Labour Efficiency Variance 75,000Labour Rate Variance 90,625Accrued Payroll 2,250,000 
B) Work in Process 2,250,000Labour Rate Variance 90,625Labour Efficiency Variance 75,000Accrued Payroll 2,265,625 
C) Work in Process 2,250,000Labour Rate Variance 93,750Labour Efficiency Variance 78,125Accrued Payroll 2,265,625 
D) Work in Process 2,265,625Labour Efficiency Variance 78,125Labour Rate Variance 93,750Accrued Payroll 2,250,000

Question 11

Match each item with the correct statement below.
-These reflect the amount that should be paid for the quantity of input to be used.

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 12

RJB Builders makes mouldings.Its standard quantity of material allowed is 1 m of wood per 1 m of moulding at a standard price of $2.00 per metre.During September,RJB Builders purchased 500,000 m of wood at a cost of $1.90 per metre,which produced only 499,000 m of moulding.What was the materials price variance and the materials usage variance,respectively?

Accepted Answer

A) $49,900 U and $2,000 F 
B) $49,900 F and $1,900 U 
C) $50,000 F and $1,900 U 
D) $50,000 F and $2,000 U 
A) $49,900 U and $2,000 F 
B) $49,900 F and $1,900 U 
C) $50,000 F and $1,900 U 
D) $50,000 F and $2,000 U

Question 13

Of the three cost reduction methods typically used,reverse engineering tears down the competitors' products to discover more design features that create cost reductions.

Accepted Answer

A) True 
 B)False

Question 14

The standard quantity of materials allowed can be calculated by multiplying the unit quantity standard by the actual output.

Accepted Answer

A) True 
 B)False

Question 15

Which formula is used to calculate the labour efficiency variance?

Accepted Answer

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

Question 16

The standard cost sheet provides the input standards needed to compute the total amount of inputs allowed for the actual output,an essential component in computing efficiency variances.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is characteristic of variances?

Accepted Answer

A) An unfavourable labour efficiency variance could result from using higher quality materials that result in fewer inspections. 
B) A favourable labour rate variance could result from lower wage workers quitting. 
C) A favourable materials price variance could result from purchasing identical materials from another supplier at a lower price. 
D) A favourable materials usage variance could result from not efficiently utilizing raw materials, thus causing waste. 
A) An unfavourable labour efficiency variance could result from using higher quality materials that result in fewer inspections. 
B) A favourable labour rate variance could result from lower wage workers quitting. 
C) A favourable materials price variance could result from purchasing identical materials from another supplier at a lower price. 
D) A favourable materials usage variance could result from not efficiently utilizing raw materials, thus causing waste.

Question 18

Which of the following statements is characteristic of currently attainable standards?

Accepted Answer

A) They can be achieved under efficient operating conditions. 
B) No allowance is made for normal breakdowns, interruptions, etc. 
C) They are challenging and not achievable. 
D) They tend to achieve lower performance levels from personnel. 
A) They can be achieved under efficient operating conditions. 
B) No allowance is made for normal breakdowns, interruptions, etc. 
C) They are challenging and not achievable. 
D) They tend to achieve lower performance levels from personnel.

Question 19

Match each item with the correct statement below.
-Standards of perfection that require absolute efficiency.

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

In kaizen costing,the cost reduction process is controlled by repetitive use of continuous improvements and maintenance.

Accepted Answer

A) True 
 B)False

Which of the following is characteristic of the disposition of materials and labour variances?

During the month of December, Cakers Express purchased 20,000 kg of flour at $2 per kilogram. -Refer to the Figure.At the end of December,Cakers Express found that it had an unfavourable materials price variance of $1,000.What is the flour's standard cost per kilogram?

Kaizen costing focuses on the continuous reduction of manufacturing costs of existing products and processes.

The sum of the material price and material usage variances will add up to the total materials variance only if the materials purchased is equal to the materials used.

To determine whether variances are significant,managers set control limits,which represent the acceptable range,plus or minus an allowable deviation.

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

Which of the following standards are based on the amount of input that should be used per unit of output?

During March,6,000 direct labour hours were worked at a standard cost of $22 per hour.Suppose the direct labour rate variance for March was $16,500 favourable.What was the actual cost per direct labour hour?

Match each item with the correct statement below. -These reflect the amount that should be paid for the quantity of input to be used.

Of the three cost reduction methods typically used,reverse engineering tears down the competitors' products to discover more design features that create cost reductions.

The standard quantity of materials allowed can be calculated by multiplying the unit quantity standard by the actual output.

Which formula is used to calculate the labour efficiency variance?

The standard cost sheet provides the input standards needed to compute the total amount of inputs allowed for the actual output,an essential component in computing efficiency variances.

Which of the following is characteristic of variances?

Which of the following statements is characteristic of currently attainable standards?

Match each item with the correct statement below. -Standards of perfection that require absolute efficiency.

In kaizen costing,the cost reduction process is controlled by repetitive use of continuous improvements and maintenance.

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

Which of the following is characteristic of the disposition of materials and labour variances?

During the month of December, Cakers Express purchased 20,000 kg of flour at $2 per kilogram. -Refer to the Figure.At the end of December,Cakers Express found that it had an unfavourable materials price variance of $1,000.What is the flour's standard cost per kilogram?

Kaizen costing focuses on the continuous reduction of manufacturing costs of existing products and processes.

The sum of the material price and material usage variances will add up to the total materials variance only if the materials purchased is equal to the materials used.

To determine whether variances are significant,managers set control limits,which represent the acceptable range,plus or minus an allowable deviation.

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

Which of the following standards are based on the amount of input that should be used per unit of output?

During March,6,000 direct labour hours were worked at a standard cost of $22 per hour.Suppose the direct labour rate variance for March was $16,500 favourable.What was the actual cost per direct labour hour?

Match each item with the correct statement below. -These reflect the amount that should be paid for the quantity of input to be used.

Of the three cost reduction methods typically used,reverse engineering tears down the competitors' products to discover more design features that create cost reductions.

The standard quantity of materials allowed can be calculated by multiplying the unit quantity standard by the actual output.

Which formula is used to calculate the labour efficiency variance?

The standard cost sheet provides the input standards needed to compute the total amount of inputs allowed for the actual output,an essential component in computing efficiency variances.

Which of the following is characteristic of variances?

Which of the following statements is characteristic of currently attainable standards?

Match each item with the correct statement below. -Standards of perfection that require absolute efficiency.

In kaizen costing,the cost reduction process is controlled by repetitive use of continuous improvements and maintenance.

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