Question 1

The formula to compute 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 2

If at the end of the fiscal year the variances from standard are significant, the variances should be transferred to the:

Accepted Answer

A)  work in process account only 
B)  cost of goods sold account only 
C)  finished goods account only 
D)  work in process, cost of goods sold, and finished goods accounts 
A)  work in process account only 
B)  cost of goods sold account only 
C)  finished goods account only 
D)  work in process, cost of goods sold, and finished goods accounts

Question 3

The following data is given for the Zoyza Company:   Overhead is applied on standard labor hours.
The factory overhead controllable variance is:

Accepted Answer

A)  $73,250F 
B)  $73,250U 
C)  $59,400F 
D)  $59,400U 
A)  $73,250F 
B)  $73,250U 
C)  $59,400F 
D)  $59,400U

Question 4

If a company records inventory purchases at standard cost and also records purchase price variances, prepare the journal entry for a purchase of widgets that were bought at $7.45 per unit and have a standard cost of $7.15. The total amount owed to the vendor for this purchase is $33,525.

Accepted Answer

The answer of If a company records inventory purchases at...

Question 5

Currently attainable standards do not allow for reasonable production difficulties.

Accepted Answer

A) True 
 B)False

Question 6

Standard and actual costs for direct labor for the manufacture of 1,000 units of product were as follows:
   Determine the (a) time variance, (b) rate variance, and (c) total direct labor cost variance.

Accepted Answer

The answer of Standard and actual costs for direct labor...

Question 7

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 8

Calculate the fixed factory overhead volume variance using the above information:

Accepted Answer

A)  $1,701 Favorable 
B)  $4,866.75 Unfavorable 
C)  $1,701 Unfavorable 
D)  $4,866.75 Favorable 
A)  $1,701 Favorable 
B)  $4,866.75 Unfavorable 
C)  $1,701 Unfavorable 
D)  $4,866.75 Favorable

Question 9

The formula to 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 10

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 identify inventory 
C)  Used to plan direct materials, direct labor, and factory factory overhead. 
D)  Used to control costs. 
A)  Used to indicate where changes in technology and machinery need to be made. 
B)  Used to identify inventory 
C)  Used to plan direct materials, direct labor, and factory factory overhead. 
D)  Used to control costs.

Question 11

If the wage rate paid per hour differs from the standard wage rate per hour for direct labor, the variance is termed 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 12

The standard factory overhead rate is $7.50 per machine hour ($6.20 for variable factory overhead and $1.30 for fixed factory overhead) based on 100% capacity of 80,000 machine hours. The standard cost and the actual cost of factory overhead for the production of 15,000 units during August were as follows:   What is the amount of the factory overhead controllable variance?

Accepted Answer

A)  $12,000 unfavorable 
B)  $12,000 favorable 
C)  $14,000 unfavorable 
D)  $26,000 unfavorable 
A)  $12,000 unfavorable 
B)  $12,000 favorable 
C)  $14,000 unfavorable 
D)  $26,000 unfavorable

Question 13

The standard costs and actual costs for direct materials, direct labor, and factory overhead for the manufacture of 2,500 units of product are as follows:  The amount of 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

Calculate the total factory overhead cost variance using the above information:

Accepted Answer

A)  $4,866.75 Unfavorable 
B)  $4,866.75 Favorable 
C)  $8,981.75 Favorable 
D)  $8,981.75 Unfavorable 
A)  $4,866.75 Unfavorable 
B)  $4,866.75 Favorable 
C)  $8,981.75 Favorable 
D)  $8,981.75 Unfavorable

Question 15

If the standard to produce a given amount of product is 600 direct labor hours at $15 and the actual was 500 hours at $17, the time variance was $1,700 unfavorable.

Accepted Answer

A) True 
 B)False

Question 16

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 17

Ruby Company produces a chair that requires 5 yds. of material per unit. The standard price of one yard of material is $7.50. During the month, 8,400 chairs were manufactured, using 43,700 yards at a cost of $7.30 per yard. Determine the (a) price variance, (b) quantity variance, and (c) cost variance.

Accepted Answer

(a) Price variance = ($7.50 -

Question 18

Calculate the variable factory overhead controllable variance using the above information:

Accepted Answer

A)  $8,981.75 Favorable 
B)  $7,280.75 Unfavorable 
C)  $8,981.75 Unfavorable 
D)  $7,280.75 Favorable 
A)  $8,981.75 Favorable 
B)  $7,280.75 Unfavorable 
C)  $8,981.75 Unfavorable 
D)  $7,280.75 Favorable

Question 19

Tippi Company produces lamps that require 2.25 standard hours per unit at an hourly rate of $15.00 per hour. If 7,700 units required 17,550 hours at an hourly rate of $15.20 per hour, what is the direct labor (a) rate variance, (b) time variance, and (c) cost variance?

Accepted Answer

(a) Rate variance = ($15.00 - $15.20) x

Question 20

The following information relates to manufacturing overhead for the Chapman Company:
Standards:
Total fixed factory overhead - $450,000
Estimated production - 25,000 units (100% of capacity)
Overhead rates are based on machine hours.
Standard hours allowed per unit produced - 2
Fixed overhead rate - $9.00 per machine hour
Variable overhead rate - $3.50 per hour
Actual:
Fixed factory overhead - $450,000
Production - 24,000 units
Variable overhead - $170,000
Required:

Accepted Answer

The answer of The following information relates to manufacturing overhead...

Exam 22: Performance Evaluation Using Variances From Standard Costs

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

If at the end of the fiscal year the variances from standard are significant, the variances should be transferred to the:

The following data is given for the Zoyza Company: Overhead is applied on standard labor hours. The factory overhead controllable variance is:

If a company records inventory purchases at standard cost and also records purchase price variances, prepare the journal entry for a purchase of widgets that were bought at $7.45 per unit and have a standard cost of $7.15. The total amount owed to the vendor for this purchase is $33,525.

Currently attainable standards do not allow for reasonable production difficulties.

Standard and actual costs for direct labor for the manufacture of 1,000 units of product were as follows: Determine the (a) time variance, (b) rate variance, and (c) total direct labor cost variance.

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

Calculate the fixed factory overhead volume variance using the above information:

The formula to compute direct labor time 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?

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

The standard costs and actual costs for direct materials, direct labor, and factory overhead for the manufacture of 2,500 units of product are as follows: The amount of the direct labor time variance is:

Calculate the total factory overhead cost variance using the above information:

If the standard to produce a given amount of product is 600 direct labor hours at $15 and the actual was 500 hours at $17, the time variance was $1,700 unfavorable.

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

Calculate the variable factory overhead controllable variance using the above information:

Tippi Company produces lamps that require 2.25 standard hours per unit at an hourly rate of $15.00 per hour. If 7,700 units required 17,550 hours at an hourly rate of $15.20 per hour, what is the direct labor (a) rate variance, (b) time variance, and (c) cost variance?

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

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