Question 1

Process Time is the only value-added component of Throughput Time.

Accepted Answer

A) True 
 B)False

Question 2

The following data pertain to the most recent month's operations during which 520 units of product B47W were made:   Required:
a.What was the variable overhead rate variance for the month?
b.What was the variable overhead efficiency variance for the month?
Answer:
a.Variable overhead rate variance = (AH * AR) - (AH * SR)
= $13,580 - (1,400* $9.40) = $420 U
b.Variable overhead efficiency variance = SR(AH - SH*)
= $9.40(1,400 - 1,560) = $1,504 F
*SH = Standard hours per unit * Actual output = 3.0 *520 = 1,560
-Metz Corporation's variable overhead is applied on the basis of direct labor-hours.The standard cost card for product M70T specifies 7.7 direct labor-hours per unit of M70T.The standard variable overhead rate is $6.30 per direct labor-hour.During the most recent month,400 units of product M70T were made and 3,000 direct labor-hours were worked.
The actual variable overhead incurred was $18,000.
Required:
a.What was the variable overhead rate variance for the month?
b.What was the variable overhead efficiency variance for the month?

Accepted Answer

a.Variable overhead rate variance = (AH*

Question 3

The Alpha Company produces toys for national distribution.Standards for a particular toy are:
Materials: 12 ounces per unit at 56'per ounce.
Labor: 2 hours per unit at $2.75 per hour.
During the month of December,the company produced 1,000 units.Information for the month follows:
Materials: 14,000 ounces were purchased and used at a total cost of $7,140.
Labor: 2,500 hours worked at a total cost of $8,000.
-The materials quantity variance is:

Accepted Answer

A) $1,120 U 
B) $1,820 F 
C) $1,820 U 
D) $1,120 F 
A) $1,120 U 
B) $1,820 F 
C) $1,820 U 
D) $1,120 F

Question 4

The following data pertain to last month's operations:   Required:
a.What was the labor rate variance for the month?
b.What was the labor efficiency variance for the month?
Answer:
a.Labor rate variance = (AH * AR) - (AH * SR)
= $76,995 - (5,900 * $12.10) = $5,605 U
b.Labor efficiency variance = SR(AH - SH*)
= $12.10 (5,900 - 5,920) = $242 F
*SH = Standard hours per unit * Actual output = 4.0 * 1,480 = 5,920
-The following standards for variable overhead have been established for a company that makes only one product:

Accepted Answer

The answer of The following data pertain to last month's...

Question 5

Karrenberg Corporation keeps careful track of the time required to fill orders.The times required for a particular order appear below:   Required:
a.Determine the throughput time.Show your work!
b.Determine the manufacturing cycle efficiency (MCE),Show your work!
c.Determine the delivery cycle time.Show your work!

Accepted Answer

a.Throughput time = Process time + Inspe

Question 6

Marazzi Corporation keeps careful track of the time required to fill orders.The times recorded for a particular order appear below:   The throughput time was:

Accepted Answer

A) 5.3 hours 
B) 20.7 hours 
C) 15.4 hours 
D) 9.5 hours 
A) 5.3 hours 
B) 20.7 hours 
C) 15.4 hours 
D) 9.5 hours

Question 7

The standard direct labor rate should not include fringe benefits.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following represents value-added time in the manufacturing cycle?

Accepted Answer

A) Inspection Time. 
B) Queue Time. 
C) Move Time. 
D) Process Time. 
A) Inspection Time. 
B) Queue Time. 
C) Move Time. 
D) Process Time.

Question 9

Reenu Company manufactures wigs out of used dental floss.The variable cost standards for wig production developed by Reenu are as follows:   Variable overhead at Reenu is based on direct labor-hours.The actual results for the month of October were as follows:  
-What is Reenu's labor efficiency variance for October?

Accepted Answer

A) $2,700 favorable 
B) $7,200 unfavorable 
C) $9,900 unfavorable 
D) $27,600 favorable 
A) $2,700 favorable 
B) $7,200 unfavorable 
C) $9,900 unfavorable 
D) $27,600 favorable

Question 10

The Clark Company makes a single product and uses standard costing.Some data concerning this product for the month of May follow:  
-The variable overhead rate variance for May was closest to:

Accepted Answer

A) $2,290 F 
B) $2,290 U 
C) $1,710 F 
D) $1,710 U 
A) $2,290 F 
B) $2,290 U 
C) $1,710 F 
D) $1,710 U

Question 11

All cost variances should be considered exceptions that require the attention of management.

Accepted Answer

A) True 
 B)False

Question 12

Servantez Manufacturing Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs).The company's cost formula for variable overhead is $9.50 per MH.During the month,the actual total variable overhead was $51,300 and the actual level of activity for the period was 5,700 MHs.What was the variable overhead rate variance for the month?

Accepted Answer

A) $2,850 favorable 
B) $300 unfavorable 
C) $2,850 unfavorable 
D) $300 favorable 
A) $2,850 favorable 
B) $300 unfavorable 
C) $2,850 unfavorable 
D) $300 favorable

Question 13

The following data pertain to operations concerning the product for the last month:   Required:
a.What is the labor rate variance for the month?
b.What is the labor efficiency variance for the month?
Answer:
a.Labor rate variance = (AH* AR) - (AH *SR)
= $59,470 - (3,800 * $15.50) = $570 U
b.SH = Standard hours per unit *Actual output = 0.3 * 12,800 = 3,840
Labor efficiency variance = SR(AH - SH) = $15.50(3,800 - 3,840) = $620 F
-The following direct labor standards have been established for product W88V:

Accepted Answer

The answer of The following data pertain to operations concerning...

Question 14

Reifsnyder Corporation keeps careful track of the time required to fill orders.The times recorded for a particular order appear below:   The manufacturing cycle efficiency (MCE) was closest to:

Accepted Answer

A) 0.73 
B) 0.06 
C) 0.15 
D) 0.02 
A) 0.73 
B) 0.06 
C) 0.15 
D) 0.02

Question 15

The labor rate variance for January is:

Accepted Answer

A) $475 F 
B) $475 U 
C) $585 F 
D) $585 U 
A) $475 F 
B) $475 U 
C) $585 F 
D) $585 U

Question 16

The general model for calculating a quantity variance is:

Accepted Answer

A) actual quantity of inputs used x (actual price - standard price). 
B) standard price x (actual quantity of inputs used - standard quantity allowed for output). 
C) (actual quantity of inputs used at actual price) - (standard quantity allowed for output at standard price). 
D) actual price x (actual quantity of inputs used - standard quantity allowed for output). 
A) actual quantity of inputs used x (actual price - standard price). 
B) standard price x (actual quantity of inputs used - standard quantity allowed for output). 
C) (actual quantity of inputs used at actual price) - (standard quantity allowed for output at standard price). 
D) actual price x (actual quantity of inputs used - standard quantity allowed for output).

Question 17

The following data pertain to operations concerning the product for the last month: What is the labor rate variance for the month? A.$2,955 F B.$4,935 F C.$2,955 U D. $1,890 U AR = $103,635 / 6,300 = $16.45 Direct labor rate variance = AH (AR - SR) = 6,300 ($16.45 - $16.15) = $1,890 U -In a certain standard costing system the following results occurred last period: labor rate variance,$1,000 U;labor efficiency variance,$2,800 F;and the actual labor rate was $0.20 more per hour than the standard labor rate.The number of actual direct labor-hours used last period was:

Accepted Answer

A) 9,000 
B) 5,400 
C) 5,000 
D) 4,800 
A) 9,000 
B) 5,400 
C) 5,000 
D) 4,800

Question 18

Nodine Fabrication Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs).The company's cost formula for variable overhead is $7.50 per MH.The company had budgeted its fixed manufacturing overhead cost at $48,000 for the month.During the month,the actual total variable overhead was $59,760 and the actual total fixed manufacturing overhead was $45,000.The actual level of activity for the period was 8,300 MHs.What was the total of the variable overhead rate and fixed manufacturing overhead budget variances for the month?

Accepted Answer

A) $2,490 favorable 
B) $5,490 favorable 
C) $5,490 unfavorable 
D) $2,490 unfavorable 
A) $2,490 favorable 
B) $5,490 favorable 
C) $5,490 unfavorable 
D) $2,490 unfavorable

Question 19

If variable overhead is applied on the basis of direct labor-hours and the variable overhead rate variance is favorable,then:

Accepted Answer

A) actual variable overhead rate exceeded the standard rate. 
B) standard variable overhead rate exceeded the actual rate. 
C) actual direct labor-hours exceeded the standard direct labor-hours allowed for the actual output. 
D) standard direct labor-hours allowed for the actual output exceeded the actual hours. 
A) actual variable overhead rate exceeded the standard rate. 
B) standard variable overhead rate exceeded the actual rate. 
C) actual direct labor-hours exceeded the standard direct labor-hours allowed for the actual output. 
D) standard direct labor-hours allowed for the actual output exceeded the actual hours.

Question 20

Giguere Corporation applies manufacturing overhead to products on the basis of standard machine-hours.For the most recent month,the company based its budget on 2,000 machine-hours.Budgeted and actual overhead costs for the month appear below:   The company actually worked 1,920 machine-hours during the month.The standard hours allowed for the actual output were 1,760 machine-hours for the month.What was the overall variable overhead efficiency variance for the month?

Accepted Answer

A) $832 unfavorable 
B) $220 favorable 
C) $1,888 unfavorable 
D) $1,056 favorable 
A) $832 unfavorable 
B) $220 favorable 
C) $1,888 unfavorable 
D) $1,056 favorable

Process Time is the only value-added component of Throughput Time.

Marazzi Corporation keeps careful track of the time required to fill orders.The times recorded for a particular order appear below: The throughput time was:

The standard direct labor rate should not include fringe benefits.

Which of the following represents value-added time in the manufacturing cycle?

The Clark Company makes a single product and uses standard costing.Some data concerning this product for the month of May follow: -The variable overhead rate variance for May was closest to:

All cost variances should be considered exceptions that require the attention of management.

Reifsnyder Corporation keeps careful track of the time required to fill orders.The times recorded for a particular order appear below: The manufacturing cycle efficiency (MCE) was closest to:

The labor rate variance for January is:

The general model for calculating a quantity variance is:

If variable overhead is applied on the basis of direct labor-hours and the variable overhead rate variance is favorable,then:

Managerial Accounting and the Business Environment

Managerial Accounting and Cost Concepts

Cost Behavior: Analysis and Use

Cost-Volume-Profit Relationships

Systems Design: Job-Order Costing

Variable Costing: a Tool for Management

Activity-Based Costing: a Tool to Aid Decision Making

Profit Planning

Flexible Budgets and Performance Analysis

Segment Reporting,decentralization,and the Balanced Scorecard

Relevant Costs for Decision Making

Capital Budgeting Decisions

Pricing Products and Services

Profitability Analysis

Least-Squares Regression Computations

The Predetermined Overhead Rate and Capacity

Abc Action Analysis

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Transfer Pricing

Service Department Charges

The Concept of Present Value

Income Taxes in Capital Budgeting Decisions

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Exam 10: Standard Costs and Operating Performance Measures

Process Time is the only value-added component of Throughput Time.

Marazzi Corporation keeps careful track of the time required to fill orders.The times recorded for a particular order appear below: The throughput time was:

The standard direct labor rate should not include fringe benefits.

Which of the following represents value-added time in the manufacturing cycle?

The Clark Company makes a single product and uses standard costing.Some data concerning this product for the month of May follow: -The variable overhead rate variance for May was closest to:

All cost variances should be considered exceptions that require the attention of management.

Reifsnyder Corporation keeps careful track of the time required to fill orders.The times recorded for a particular order appear below: The manufacturing cycle efficiency (MCE) was closest to:

The labor rate variance for January is:

The general model for calculating a quantity variance is:

If variable overhead is applied on the basis of direct labor-hours and the variable overhead rate variance is favorable,then:

Managerial Accounting and the Business Environment

Managerial Accounting and Cost Concepts

Cost Behavior: Analysis and Use

Cost-Volume-Profit Relationships

Systems Design: Job-Order Costing

Variable Costing: a Tool for Management

Activity-Based Costing: a Tool to Aid Decision Making

Profit Planning

Flexible Budgets and Performance Analysis

Segment Reporting,decentralization,and the Balanced Scorecard

Relevant Costs for Decision Making

Capital Budgeting Decisions

Pricing Products and Services

Profitability Analysis

Least-Squares Regression Computations

The Predetermined Overhead Rate and Capacity

Abc Action Analysis

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Transfer Pricing

Service Department Charges

The Concept of Present Value

Income Taxes in Capital Budgeting Decisions

Filters