Question 1

When the actual price to purchase a raw material on account exceeds its standard price, the journal entry would include:

Accepted Answer

A) Debit to Raw Materials; Credit to Materials Price Variance 
B) Debit to Accounts Payable; Credit to Materials Price Variance 
C) Debit to Raw Materials; Debit to Materials Price Variance 
D) Debit to Accounts Payable; Debit to Materials Price Variance 
A) Debit to Raw Materials; Credit to Materials Price Variance 
B) Debit to Accounts Payable; Credit to Materials Price Variance 
C) Debit to Raw Materials; Debit to Materials Price Variance 
D) Debit to Accounts Payable; Debit to Materials Price Variance

Question 2

A favorable labor efficiency variance would result in a debit balance in the labor efficiency variance account.

Accepted Answer

A) True 
 B)False

Question 3

Albert Manufacturing Company manufactures a single product. The standard cost of one unit of this product is:   During the month of October, 6,000 units were produced. Selected cost data relating to the month's production follow:   There was no beginning inventory of raw materials. The variable overhead rate is based on direct labor-hours.
Required:
a. For direct materials, compute the price and quantity variances for the month, and prepare journal entries to record activity for the month.
b. For direct labor, compute the rate and efficiency variances for the month, and prepare a journal entry to record labor activity for the month.
c. For variable overhead, compute the rate variance for the month.

Accepted Answer

a. Materials price variance = (AQ × AP)

Question 4

A favorable labor efficiency variance is recorded as a debit in the Labor Efficiency Variance account.

Accepted Answer

A) True 
 B)False

Question 5

Compound K72R is used to make Munuz Corporation's major product. The standard cost of compound K72R is $43.90 per ounce and the standard quantity is 1.4 ounces per unit of output. In the most recent month, 120 ounces of the compound were used to make 100 units of the output. When recording the use of materials in production, Raw Materials would be:

Accepted Answer

A) debited for $5,268. 
B) credited for $6,146. 
C) credited for $5,268. 
D) debited for $6,146. 
A) debited for $5,268. 
B) credited for $6,146. 
C) credited for $5,268. 
D) debited for $6,146.

Question 6

Compound K52E is a raw material used to make Pinkos Corporation's major product. The standard cost of compound K52E is $46.00 per ounce and the standard quantity is 5.0 ounces per unit of output. Data concerning the compound for March appear below:   The raw material was purchased on account. The Materials Quantity Variance for March would be recorded as a:

Accepted Answer

A) Credit of $19,780 
B) Credit of $5,980 
C) Debit of $19,780 
D) Debit of $5,980 
A) Credit of $19,780 
B) Credit of $5,980 
C) Debit of $19,780 
D) Debit of $5,980

Question 7

If the actual rate per direct labor-hour is less than the standard rate per direct labor-hour, then the journal entry to record the Labor rate variance would be a credit.

Accepted Answer

A) True 
 B)False

Question 8

Ungvarsky Corporation has provided the following data concerning its most important raw material, compound J38F:   The raw material was purchased on account.
Required:
a. Record the purchase of the raw material in a journal entry.
b. Record the use of the raw material in production in a journal entry.

Accepted Answer

a. Materials price variance = AQ × (AP -

Question 9

A favorable materials quantity variance would appear as a credit in a journal entry.

Accepted Answer

A) True 
 B)False

Question 10

Compound K52E is a raw material used to make Pinkos Corporation's major product. The standard cost of compound K52E is $46.00 per ounce and the standard quantity is 5.0 ounces per unit of output. Data concerning the compound for March appear below:   The raw material was purchased on account. The credits to the Raw Materials account for March would total:

Accepted Answer

A) $172,420 
B) $184,000 
C) $170,200 
D) $164,220 
A) $172,420 
B) $184,000 
C) $170,200 
D) $164,220

Question 11

Cafferty Corporation has provided the following data concerning its direct labor costs for March:   The journal entry to record the incurrence of direct labor costs in March would include the following for Work in Process:

Accepted Answer

A) Credit of $33,280 
B) Debit of $35,625 
C) Debit of $33,280 
D) Credit of $35,625 
A) Credit of $33,280 
B) Debit of $35,625 
C) Debit of $33,280 
D) Credit of $35,625

Question 12

The journal entry below:   indicates that:

Accepted Answer

A) the total labor variance was $800, unfavorable. 
B) employees received an unexpected rate increase during the period. 
C) more labor time was required to complete the output of the period than was allowed at standard. 
D) Work in Process valued at $25,000 was completed and transferred to Finished Goods. 
A) the total labor variance was $800, unfavorable. 
B) employees received an unexpected rate increase during the period. 
C) more labor time was required to complete the output of the period than was allowed at standard. 
D) Work in Process valued at $25,000 was completed and transferred to Finished Goods.

Question 13

If the actual purchase price for materials exceeds the standard purchase price, then the journal entry to record the Direct Materials Price Variance would be a credit.

Accepted Answer

A) True 
 B)False

Question 14

Florea Corporation has provided the following data concerning its most important raw material, compound K09B:   The raw material was purchased on account. The Materials Price Variance for August would be recorded as a:

Accepted Answer

A) Credit of $112 
B) Credit of $300 
C) Debit of $112 
D) Debit of $300 
A) Credit of $112 
B) Credit of $300 
C) Debit of $112 
D) Debit of $300

Question 15

Barbu Corporation has provided the following data concerning its direct labor costs for June:   The Labor Rate Variance for June would be recorded as a:

Accepted Answer

A) credit of $6,305. 
B) credit of $6,500. 
C) debit of $6,305. 
D) debit of $6,500. 
A) credit of $6,305. 
B) credit of $6,500. 
C) debit of $6,305. 
D) debit of $6,500.

Question 16

During the month of May, Marian Manufacturing Corporation purchased materials that had a total standard cost of $37,000. The Materials Price Variance on these materials was $6,000 favorable. What summary journal entry would Domino make to record this purchase and variance for May?

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 17

Florea Corporation has provided the following data concerning its most important raw material, compound K09B:   The raw material was purchased on account. The Materials Quantity Variance for August would be recorded as a:

Accepted Answer

A) Credit of $24,910 
B) Credit of $1,060 
C) Debit of $1,060 
D) Debit of $24,910 
A) Credit of $24,910 
B) Credit of $1,060 
C) Debit of $1,060 
D) Debit of $24,910

Question 18

Gramajo Corporation's standard wage rate is $10.10 per direct labor-hour (DLH) and according to the standards, each unit of output requires 3.4 DLHs. In February, 2,400 units were produced, the actual wage rate was $9.40 per DLH, and the actual hours were 7,920 DLHs. In the journal entry to record the incurrence of direct labor costs in February, the Work in Process entry would consist of a:

Accepted Answer

A) credit of $74,448. 
B) debit of $74,448. 
C) debit of $82,416. 
D) credit of $82,416. 
A) credit of $74,448. 
B) debit of $74,448. 
C) debit of $82,416. 
D) credit of $82,416.

Question 19

The following standards have been established for a raw material used in the production of product G13:   The following data pertain to a recent month's operations:   Required:
a. What is the materials price variance for the month?
b. What is the materials quantity variance for the month?
c. Prepare journal entries to record the purchase and use of the raw material during the month. (All raw materials are purchased on account.)

Accepted Answer

a. Materials price variance = (AQ × AP)

Question 20

Enwall Corporation's standard wage rate is $11.20 per direct labor-hour (DLH) and according to the standards, each unit of output requires 2.9 DLHs. In December, 5,900 units were produced, the actual wage rate was $10.20 per DLH, and the actual hours were 14,150 DLHs. In the journal entry to record the incurrence of direct labor costs in December, the Work in Process entry would consist of a:

Accepted Answer

A) credit of $144,330. 
B) debit of $191,632. 
C) debit of $144,330. 
D) credit of $191,632. 
A) credit of $144,330. 
B) debit of $191,632. 
C) debit of $144,330. 
D) credit of $191,632.

When the actual price to purchase a raw material on account exceeds its standard price, the journal entry would include:

A favorable labor efficiency variance would result in a debit balance in the labor efficiency variance account.

A favorable labor efficiency variance is recorded as a debit in the Labor Efficiency Variance account.

If the actual rate per direct labor-hour is less than the standard rate per direct labor-hour, then the journal entry to record the Labor rate variance would be a credit.

Ungvarsky Corporation has provided the following data concerning its most important raw material, compound J38F: The raw material was purchased on account. Required: a. Record the purchase of the raw material in a journal entry. b. Record the use of the raw material in production in a journal entry.

A favorable materials quantity variance would appear as a credit in a journal entry.

Cafferty Corporation has provided the following data concerning its direct labor costs for March: The journal entry to record the incurrence of direct labor costs in March would include the following for Work in Process:

The journal entry below: indicates that:

If the actual purchase price for materials exceeds the standard purchase price, then the journal entry to record the Direct Materials Price Variance would be a credit.

Florea Corporation has provided the following data concerning its most important raw material, compound K09B: The raw material was purchased on account. The Materials Price Variance for August would be recorded as a:

Barbu Corporation has provided the following data concerning its direct labor costs for June: The Labor Rate Variance for June would be recorded as a:

During the month of May, Marian Manufacturing Corporation purchased materials that had a total standard cost of $37,000. The Materials Price Variance on these materials was $6,000 favorable. What summary journal entry would Domino make to record this purchase and variance for May?

Florea Corporation has provided the following data concerning its most important raw material, compound K09B: The raw material was purchased on account. The Materials Quantity Variance for August would be recorded as a:

Managerial Accounting and Cost Concepts

Job-Order Costing

Activity-Based Costing

Process Costing

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Master Budgeting

Flexible Budgets, Standard Costs, and Variance Analysis

Performance Measurement in Decentralized Organizations

Differential Analysis: the Key to Decision Making

Capital Budgeting Decisions

Statement of Cash Flows

Financial Statement Analysis

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

Filters

Exam 15: Journal Entries to Record Variances

When the actual price to purchase a raw material on account exceeds its standard price, the journal entry would include:

A favorable labor efficiency variance would result in a debit balance in the labor efficiency variance account.

A favorable labor efficiency variance is recorded as a debit in the Labor Efficiency Variance account.

If the actual rate per direct labor-hour is less than the standard rate per direct labor-hour, then the journal entry to record the Labor rate variance would be a credit.

A favorable materials quantity variance would appear as a credit in a journal entry.

Cafferty Corporation has provided the following data concerning its direct labor costs for March: The journal entry to record the incurrence of direct labor costs in March would include the following for Work in Process:

The journal entry below: indicates that:

If the actual purchase price for materials exceeds the standard purchase price, then the journal entry to record the Direct Materials Price Variance would be a credit.

Florea Corporation has provided the following data concerning its most important raw material, compound K09B: The raw material was purchased on account. The Materials Price Variance for August would be recorded as a:

Barbu Corporation has provided the following data concerning its direct labor costs for June: The Labor Rate Variance for June would be recorded as a:

During the month of May, Marian Manufacturing Corporation purchased materials that had a total standard cost of $37,000. The Materials Price Variance on these materials was $6,000 favorable. What summary journal entry would Domino make to record this purchase and variance for May?

Florea Corporation has provided the following data concerning its most important raw material, compound K09B: The raw material was purchased on account. The Materials Quantity Variance for August would be recorded as a:

Managerial Accounting and Cost Concepts

Job-Order Costing

Activity-Based Costing

Process Costing

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Master Budgeting

Flexible Budgets, Standard Costs, and Variance Analysis

Performance Measurement in Decentralized Organizations

Differential Analysis: the Key to Decision Making

Capital Budgeting Decisions

Statement of Cash Flows

Financial Statement Analysis

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

Filters