Question 1

The budgeted overhead costs for standard hours allowed and the overhead costs applied to the product are the same amount

Accepted Answer

A)  for both variable and fixed overhead costs.
B)  only when standard hours allowed is less than normal capacity.
C)  for variable overhead costs.
D)  for fixed overhead costs. C

Question 2

A favourable variance

Accepted Answer

A)  is an indication that the company is not operating in an optimal manner.
B)  implies a positive result if quality control standards are met.
C)  implies a positive result if standards are flexible.
D)  means that standards are too loosely specified. B

Question 3

Ideal standards

Accepted Answer

A)  are rigorous but attainable.
B)  are the standards generally used in a master budget.
C)  reflect optimal performance under perfect operating conditions.
D)  will always motivate employees to achieve the maximum output. C

Question 4

The matrix approach to variance analysis

Accepted Answer

A)  will yield slightly different variances than the formula approach.
B)  is more accurate than the formula approach.
C)  does not separate the price and quantity variance calculations.
D)  provides a convenient structure for determining each variance.

Question 5

A direct labour price standard is frequently called the direct labour efficiency standard.

Accepted Answer

A) True 
 B)False

Question 6

The investigation of a materials price variance usually begins in the

Accepted Answer

A)  first production department.
B)  purchasing department.
C)  controller's office.
D)  accounts payable department.

Question 7

Ideal standards will generally result in favourable variances for the company.

Accepted Answer

A) True 
 B)False

Question 8

The costing of inventories at standard cost for external financial statement reporting purposes is

Accepted Answer

A)  not permitted.
B)  preferable to reporting at actual costs.
C)  in accordance with generally accepted accounting principles if significant differences exist between actual costs and standard costs.
D)  in accordance with generally accepted accounting principles if significant differences do not exist between actual and standard costs.

Question 9

The two levels that standards may be set at are

Accepted Answer

A)  normal and fully efficient.
B)  normal and ideal.
C)  ideal and less efficient.
D)  fully efficient and fully effective.

Question 10

The total overhead budget variance is equal to the

Accepted Answer

A)  sum of the total materials variance and the total labour variance.
B)  difference between the total materials variance and the total labour variance.
C)  difference between the actual overhead costs and the overhead costs applied to the work done.
D)  total variance minus the spending variance and the volume variance.

Question 11

The difference between actual overhead costs and overhead costs applied is the

Accepted Answer

A)  budget variance.
B)  spending variance.
C)  total overhead variance.
D)  volume variance.

Question 12

Allowance for spoilage is part of the direct

Accepted Answer

A)  materials price standard.
B)  materials quantity standard.
C)  labour price standard.
D)  labour quantity standard.

Question 13

A total materials variance is analyzed in terms of

Accepted Answer

A)  price and quantity variances.
B)  buy and sell variances.
C)  quantity and quality variances.
D)  tight and loose variances.

Question 14

A variance is the difference between actual costs and standard costs.

Accepted Answer

A) True 
 B)False

Question 15

A standard which represents an efficient level of performance that is attainable under expected operating conditions is called a(n)

Accepted Answer

A)  ideal standard.
B)  loose standard.
C)  tight standard.
D)  normal standard.

Question 16

Use the following information for questions 
Bridgeware Company has a materials price standard of $2.50 per kilogram.Four thousand kilograms of materials were purchased at $2.40 a kilogram.The actual quantity of materials used was 3,500 kilograms, although the standard quantity allowed for the output was 3,400 kilograms.
-Bridgeware Company's materials price variance is

Accepted Answer

A)  $400 U.
B)  $400 F.
C)  $350 U.
D)  $300 F.

Question 17

Which of the following statements is false?

Accepted Answer

A)  The overhead volume variance indicates whether plant facilities were used efficiently during the period.
B)  The costs that cause the overhead volume variance are usually controllable costs.
C)  The overhead volume variance relates solely to fixed costs.
D)  The overhead volume variance is favourable if standard hours allowed for output are greater than the standard hours at normal capacity.

Question 18

The overhead volume variance relates only to

Accepted Answer

A)  variable overhead costs.
B)  fixed overhead costs.
C)  both variable and fixed overhead costs.
D)  all manufacturing costs.

Question 19

An unfavourable materials quantity variance would occur if

Accepted Answer

A)  more materials are purchased than are used.
B)  actual kilograms of materials used were less than the standard kilograms llowed.
C)  actual labour hours used were greater than the standard labour hours allowed.
D)  actual kilograms of materials used were greater than the standard kilograms allowed.

Question 20

The standard rate of pay is $15 per direct labour hour.If the actual direct labour payroll was $58,800 for 4,000 direct labour hours worked, the direct labour price (rate) variance is

Accepted Answer

A)  $1,200 unfavourable.
B)  $1,200 favourable.
C)  $1,500 unfavourable.
D)  $1,500 favourable.

Exam 12: Standard Costs and Balanced Scorecard

The budgeted overhead costs for standard hours allowed and the overhead costs applied to the product are the same amount

A favourable variance

Ideal standards

The matrix approach to variance analysis

A direct labour price standard is frequently called the direct labour efficiency standard.

The investigation of a materials price variance usually begins in the

Ideal standards will generally result in favourable variances for the company.

The costing of inventories at standard cost for external financial statement reporting purposes is

The two levels that standards may be set at are

The total overhead budget variance is equal to the

The difference between actual overhead costs and overhead costs applied is the

Allowance for spoilage is part of the direct

A total materials variance is analyzed in terms of

A variance is the difference between actual costs and standard costs.

A standard which represents an efficient level of performance that is attainable under expected operating conditions is called a(n)

Which of the following statements is false?

The overhead volume variance relates only to

An unfavourable materials quantity variance would occur if

The standard rate of pay is $15 per direct labour hour.If the actual direct labour payroll was $58,800 for 4,000 direct labour hours worked, the direct labour price (rate) variance is