Question 1

An unfavorable labor rate variance is recorded as a debit in the Labor Rate Variance account.

Accepted Answer

A) True 
 B)False  True

Question 2

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.
-The Labor Rate Variance for December would be recorded as a:

Accepted Answer

A) debit of $14,150. 
B) credit of $17,110. 
C) debit of $17,110. 
D) credit of $14,150. 
A) debit of $14,150. 
B) credit of $17,110. 
C) debit of $17,110. 
D) credit of $14,150. D

Question 3

When the actual wage rate paid to direct labor workers exceeds the standard wage rate, the journal entry would include:

Accepted Answer

A) Credit to Wages Payable; Credit to Labor Rate Variance 
B) Credit to Work-In-Process; Credit to Labor Rate Variance 
C) Credit to Wages Payable; Debit to Labor Rate Variance 
D) Credit to Work-In-Process; Debit to Labor Rate Variance 
A) Credit to Wages Payable; Credit to Labor Rate Variance 
B) Credit to Work-In-Process; Credit to Labor Rate Variance 
C) Credit to Wages Payable; Debit to Labor Rate Variance 
D) Credit to Work-In-Process; Debit to Labor Rate Variance C

Question 4

Liukko Corporation's standard wage rate is $14.90 per direct labor-hour (DLH) and according to the standards, each unit of output requires 2.8 DLHs. In June, 1,800 units were produced, the actual wage rate was $15.80 per DLH, and the actual hours were 5,110 DLHs. The Labor Efficiency Variance for June would be recorded as a:

Accepted Answer

A) debit of $1,106. 
B) credit of $1,106. 
C) credit of $1,043. 
D) debit of $1,043. 
A) debit of $1,106. 
B) credit of $1,106. 
C) credit of $1,043. 
D) debit of $1,043.

Question 5

Florea Corporation has provided the following data concerning its most important raw material, compound K09B:
 
 The raw material was purchased on account.

-The debits to the Raw Materials account for August would total:

Accepted Answer

A) $39,750 
B) $15,900 
C) $14,840 
D) $40,050 
A) $39,750 
B) $15,900 
C) $14,840 
D) $40,050

Question 6

Florea Corporation has provided the following data concerning its most important raw material, compound K09B:
 
 The raw material was purchased on account.
-The credits to the Raw Materials account for August would total:

Accepted Answer

A) $40,050 
B) $14,840 
C) $39,750 
D) $15,900 
A) $40,050 
B) $14,840 
C) $39,750 
D) $15,900

Question 7

When the actual amount of a raw material used in production is greater than the standard amount allowed for the actual output, the journal entry would include:

Accepted Answer

A) Credit to Raw Materials; Credit to Materials Quantity Variance 
B) Credit to Work-In-Process; Credit to Materials Quantity Variance 
C) Credit to Raw Materials; Debit to Materials Quantity Variance 
D) Credit to Work-In-Process; Debit to Materials Quantity Variance 
A) Credit to Raw Materials; Credit to Materials Quantity Variance 
B) Credit to Work-In-Process; Credit to Materials Quantity Variance 
C) Credit to Raw Materials; Debit to Materials Quantity Variance 
D) Credit to Work-In-Process; Debit to Materials Quantity Variance

Question 8

The standards for product F28 call for 2.7 pounds of a raw material that costs $16.50 per pound. Last month, 4,100 pounds of the raw material were purchased for $70,520. The actual output of the month was 1,300 units of product F28. A total of 3,500 pounds of the raw material were used to produce this output.
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 9

Widman, Inc. makes and sells only one product and uses standard costing. The standard cost sheet for one unit of product includes the following:

• Direct materials: 5 grams at $0.35 per gram
• Direct labor: 1 hour at $8 per hour

Last period the company had the following results:

• 5,000 grams of direct materials purchased at $0.40 per gram
• 4,000 grams of direct materials used in production
• 900 units of product were made
• 850 hours of direct labor were used at $8.50 per hour

-The journal entry to record the use of direct materials in production last period would include:

Accepted Answer

A) Work in process $1,400, Debit; materials quantity variance $175, Debit 
B) Work in process $1,575, Debit; materials quantity variance $175, Credit 
C) Work in process $1,400, Debit; materials quantity variance $175, Credit 
D) Work in process $1,575, Debit; materials quantity variance $175, Debit 
A) Work in process $1,400, Debit; materials quantity variance $175, Debit 
B) Work in process $1,575, Debit; materials quantity variance $175, Credit 
C) Work in process $1,400, Debit; materials quantity variance $175, Credit 
D) Work in process $1,575, Debit; materials quantity variance $175, Debit

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 debits to the Raw Materials account for March would total:

Accepted Answer

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

Question 11

Results of operations for the Anderson Corporation indicated that the actual direct labor rate for May was $9.75 while the standard rate was $10.00. The general ledger entry to record the incurrence of direct labor cost would include:

Accepted Answer

A) a debit to Work In Process for the actual number of hours times $9.75 per hour. 
B) a debit to Work In Process for the standard number of hours times $10.00 per hour. 
C) a debit to Work In Process for the standard number of hours times $9.75 per hour. 
D) a debit to Work In Process for the actual number of hours times $10.00 per hour. 
A) a debit to Work In Process for the actual number of hours times $9.75 per hour. 
B) a debit to Work In Process for the standard number of hours times $10.00 per hour. 
C) a debit to Work In Process for the standard number of hours times $9.75 per hour. 
D) a debit to Work In Process for the actual number of hours times $10.00 per hour.

Question 12

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 13

If the actual rate per direct labor-hour exceeds the standard rate per direct labor-hour, then the journal entry to record the Labor Rate Variance would be a debit.

Accepted Answer

A) True 
 B)False

Question 14

Compound C65Z is used by Sinkey Corporation to make one of its products. The standard cost of compound C65Z is $21.10 per ounce and the standard quantity is 2.0 ounces per unit of output. Data concerning the compound in the most recent month appear below:   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 15

Widman, Inc. makes and sells only one product and uses standard costing. The standard cost sheet for one unit of product includes the following:

• Direct materials: 5 grams at $0.35 per gram
• Direct labor: 1 hour at $8 per hour

Last period the company had the following results:

• 5,000 grams of direct materials purchased at $0.40 per gram
• 4,000 grams of direct materials used in production
• 900 units of product were made
• 850 hours of direct labor were used at $8.50 per hour

-Compound B73G is used to make Vasconcellos Corporation's major product. The standard cost of B73G is $27.60 per ounce and the standard quantity is 8.6 ounces per unit of output. In the most recent month, 3,200 ounces of the raw material were purchased at a cost of $26.70 per ounce. When recording the purchase of materials, Raw Materials would be:

Accepted Answer

A) debited for $88,320. 
B) debited for $85,440. 
C) credited for $85,440. 
D) credited for $88,320. 
A) debited for $88,320. 
B) debited for $85,440. 
C) credited for $85,440. 
D) credited for $88,320.

Question 16

Marusarz Corporation has provided the following data concerning its most important raw material, compound F55M:   When recording the purchase of materials, Raw Materials would be:

Accepted Answer

A) credited for $74,120. 
B) debited for $73,270. 
C) debited for $74,120. 
D) credited for $73,270. 
A) credited for $74,120. 
B) debited for $73,270. 
C) debited for $74,120. 
D) credited for $73,270.

Question 17

Gainer Corporation's standard wage rate is $11.70 per direct labor-hour (DLH) and according to the standards, each unit of output requires 3.9 DLHs. In February, 7,800 units were produced, the actual wage rate was $12.50 per DLH, and the actual hours were 29,940 DLHs. The Labor Rate Variance for February would be recorded as a:

Accepted Answer

A) debit of $23,952. 
B) credit of $23,952. 
C) credit of $24,336. 
D) debit of $24,336. 
A) debit of $23,952. 
B) credit of $23,952. 
C) credit of $24,336. 
D) debit of $24,336.

Question 18

An unfavorable materials price variance is recorded as a debit in the Materials Price Variance account.

Accepted Answer

A) True 
 B)False

Question 19

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 20

When the actual direct labor-hours exceeds the standard direct labor-hours allowed for the actual output of the period, the journal entry would include:

Accepted Answer

A) Credit to Wages Payable; Credit to Labor Efficiency Variance 
B) Credit to Work-In-Process; Credit to Labor Efficiency Variance 
C) Credit to Wages Payable; Debit to Labor Efficiency Variance 
D) Credit to Work-In-Process; Debit to Labor Efficiency Variance 
A) Credit to Wages Payable; Credit to Labor Efficiency Variance 
B) Credit to Work-In-Process; Credit to Labor Efficiency Variance 
C) Credit to Wages Payable; Debit to Labor Efficiency Variance 
D) Credit to Work-In-Process; Debit to Labor Efficiency Variance

An unfavorable labor rate variance is recorded as a debit in the Labor Rate Variance account.

When the actual wage rate paid to direct labor workers exceeds the standard wage rate, the journal entry would include:

Florea Corporation has provided the following data concerning its most important raw material, compound K09B: The raw material was purchased on account. -The debits to the Raw Materials account for August would total:

Florea Corporation has provided the following data concerning its most important raw material, compound K09B: The raw material was purchased on account. -The credits to the Raw Materials account for August would total:

When the actual amount of a raw material used in production is greater than the standard amount allowed for the actual output, the journal entry would include:

Results of operations for the Anderson Corporation indicated that the actual direct labor rate for May was $9.75 while the standard rate was $10.00. The general ledger entry to record the incurrence of direct labor cost would include:

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:

If the actual rate per direct labor-hour exceeds the standard rate per direct labor-hour, then the journal entry to record the Labor Rate Variance would be a debit.

Marusarz Corporation has provided the following data concerning its most important raw material, compound F55M: When recording the purchase of materials, Raw Materials would be:

An unfavorable materials price variance is recorded as a debit in the Materials Price Variance account.

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

When the actual direct labor-hours exceeds the standard direct labor-hours allowed for the actual output of the period, the journal entry would include:

Master Budgeting

Flexible Budgets and Performance Analysis

Standard Costs and Variances

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Performance Measurement in Decentralized Organizations

Transfer Pricing

Service Department Charges

Differential Analysis: the Key to Decision Making

Capital Budgeting Decisions

The Concept of Present Value

Income Taxes and the Net Present Value Method

Statement of Cash Flows

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

Financial Statement Analysis

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Exam 5: Journal Entries to Record Variances

An unfavorable labor rate variance is recorded as a debit in the Labor Rate Variance account.

When the actual wage rate paid to direct labor workers exceeds the standard wage rate, the journal entry would include:

Florea Corporation has provided the following data concerning its most important raw material, compound K09B: The raw material was purchased on account. -The debits to the Raw Materials account for August would total:

Florea Corporation has provided the following data concerning its most important raw material, compound K09B: The raw material was purchased on account. -The credits to the Raw Materials account for August would total:

When the actual amount of a raw material used in production is greater than the standard amount allowed for the actual output, the journal entry would include:

Results of operations for the Anderson Corporation indicated that the actual direct labor rate for May was $9.75 while the standard rate was $10.00. The general ledger entry to record the incurrence of direct labor cost would include:

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:

If the actual rate per direct labor-hour exceeds the standard rate per direct labor-hour, then the journal entry to record the Labor Rate Variance would be a debit.

Marusarz Corporation has provided the following data concerning its most important raw material, compound F55M: When recording the purchase of materials, Raw Materials would be:

An unfavorable materials price variance is recorded as a debit in the Materials Price Variance account.

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

When the actual direct labor-hours exceeds the standard direct labor-hours allowed for the actual output of the period, the journal entry would include:

Master Budgeting

Flexible Budgets and Performance Analysis

Standard Costs and Variances

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Performance Measurement in Decentralized Organizations

Transfer Pricing

Service Department Charges

Differential Analysis: the Key to Decision Making

Capital Budgeting Decisions

The Concept of Present Value

Income Taxes and the Net Present Value Method

Statement of Cash Flows

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

Financial Statement Analysis

Filters