Question 1

Taylor's direct-labor rate variance was

Accepted Answer

A) $6,600F. 
B) $6,600U. 
C) $2,960F. 
D) $2,960U. 
E) None of thesE.

Question 2

Consider the following information: 
The direct-labor rate variance is:

Accepted Answer

A) $17,250U. 
B) $20,700U. 
C) $20,700F. 
D) $21,000F. 
E) None of thesE.

Question 3

Dover Enterprises recently used 14,000 labor hours to produce 7,500 completed units.According to manufacturing specifications,each unit is anticipated to take two hours to complete.The company's actual payroll cost amounted to $158,200.If the standard labor cost per hour is $11,Dover's labor rate variance is:

Accepted Answer

A) $4,200U. 
B) $4,000F. 
C) $4,300U. 
D) $4,300F. 
E) None of thesE.

Question 4

A favorable labor efficiency variance is created when:

Accepted Answer

A) actual labor hours worked exceed standard hours allowed. 
B) actual hours worked are less than standard hours allowed. 
C) actual wages paid are less than amounts that should have been paid. 
D) actual units produced exceed budgeted production levels. 
E) actual units produced exceed standard hours allowed.

Question 5

A production supervisor generally has little influence over the:

Accepted Answer

A) direct-material quantity variance. 
B) direct-labor efficiency variance. 
C) direct-material price variance. 
D) number of units produceD. 
E) All of these items.

Question 6

Listed below are five variances (and possible causes)that are under review by management of Knox Company.Which of the following is least likely to cause the variance indicated?

Accepted Answer

A) The need to ship goods acquired from a distant supplier via FedEx rather than via truck;material price variance. 
B) The need to complete goods on a timely basis during a period of high absenteeism;labor rate variance. 
C) A work-team that is very unhappy with its supervisor;labor efficiency variance. 
D) The need to close a plant for two days because of blizzard conditions;material quantity variance,part no.542. 
E) A malfunctioning piece of manufacturing equipment;labor efficiency variancE.

Question 7

A direct-material quantity variance can be caused by all of the following except:

Accepted Answer

A) improper employee training. 
B) changes in sales volume. 
C) acquisition of materials that are below standard quality. 
D) adjustment problems with machines. 
E) disgruntled workers.

Question 8

The direct-labor rate variance is:

Accepted Answer

A) $8,900F. 
B) $8,900U. 
C) $9,000F. 
D) $9,000U. 
E) None of thesE.

Question 9

Which of the following choices correctly notes the use of the standard price per unit of direct material when calculating the materials price variance and the material quantity variance?

Accepted Answer

A) Choice A 
B) Choice B 
C) Choice C 
D) Choice D 
E) Choice E

Question 10

Which department would normally begin an investigation regarding an unfavorable materials quantity variance?

Accepted Answer

A) Quality control. 
B) Purchasing. 
C) Engineering. 
D) Production. 
E) Receiving.

Question 11

Taylor's direct-material price variance was:

Accepted Answer

A) $16,050F. 
B) $16,050U. 
C) $16,800F. 
D) $16,800U. 
E) None of thesE.

Question 12

Rogillo,Inc.had an unfavorable labor efficiency variance and an unfavorable materials quantity variance.Which department might be held accountable for these variances?

Accepted Answer

A) Purchasing,because bad materials can harm labor efficiency. 
B) Production,because inefficient workers may use more materials than allowed. 
C) Marketing. 
D) Shipping. 
E) Both A and/or B are possiblE.

Question 13

Which of the following is a criticism of standard costing,as applied to today's manufacturing environment?

Accepted Answer

A) Standards tend to be relevant for only a short period of time because of shorter product life cycles. 
B) Variance information is usually aggregated (i.e. ,combined)rather than associated with a particular batch of goods or a specific product line. 
C) Traditional standard costing has a fairly narrow orientation,failing to focus on broader issues such as the overall costs of ownership. 
D) Standard costing pays considerable attention to labor cost and labor efficiency,which are becoming a relatively unimportant factor of production. 
E) All of these are valid criticisms.

Question 14

Lucie Corporation's purchasing manager obtained a special price on an aluminum alloy from a new supplier,resulting in a direct-material price variance of $9,500F.The alloy produced more waste than normal,as evidenced by a direct-material quantity variance of $2,000U,and was also difficult to use.This slowed worker efficiency,generating a $2,500U labor efficiency variance.To help remedy the situation,the production manager used senior line employees,which gave rise to a $900U labor rate variance.If overall product quality did not suffer,what variance amount is best used in judging the appropriateness of the purchasing manager's decision to acquire substandard material?

Accepted Answer

A) $4,100F. 
B) $5,000F. 
C) $7,000F. 
D) $7,500F. 
E) $9,500F.

Question 15

To assess how customers perceive a company's products,management may study:

Accepted Answer

A) the number of customer complaints. 
B) the number of warranty claims. 
C) the number of products returned. 
D) the cost of repairing returned products. 
E) All of these measures.

Question 16

Balanced scorecards contain a number of factors that are important to the success of a business.These factors are often divided into four categories: financial,customer,learning and growth,and internal operations.
Consider the twelve factors that follow.
1.Market share
2.Earnings per share
3.Manufacturing cycle efficiency
4.Machine downtime
5.Number of patents held
6.Employee suggestions
7.Number of repeat sales
8.Levels of inventories held
9.Number of vendors used
10.Cash flow from operations
11.Employee training hours
12.Gross margin
Required:
Determine the proper classification (financial,customer,learning and growth,or internal operations)for each of the twelve factors listed.

Accepted Answer

The answer of Balanced scorecards contain a number of factors...

Question 17

For the quarter just ended,Bojangles,Inc.reported the following variances in one of its manufacturing departments:
Material price variance,U
Material quantity variance,F
Labor efficiency variance,F
Labor rate variance,negligible
Machine hours efficiency,F
The sum of the favorable variances exceeded the unfavorable materials price variance by a considerable amount.The quality of the output from the department was the same as usual.Bojangles operates very close to a JIT system for materials purchases,with virtually all material acquired during the quarter being used in manufacturing activities.
Required:
Is there any connection among these variances? If so,explain.

Accepted Answer

The answer of For the quarter just ended,Bojangles,Inc.reported the following...

Question 18

A standard cost:

Accepted Answer

A) is the "true" cost of a unit of production. 
B) is a budget for the production of one unit of a product or service. 
C) can be useful in calculating equivalent units. 
D) is normally the average cost within an industry. 
E) is almost always the actual cost from previous years.

Question 19

If a company has an unfavorable direct-material quantity variance,then:

Accepted Answer

A) the direct-material price variance is favorable. 
B) the total direct-material variance is unfavorable. 
C) the total direct-material variance is favorable. 
D) the direct-labor efficiency variance is unfavorable. 
E) any of the above variances can occur.

Question 20

Courtney purchased and consumed 50,000 gallons of direct material that was used in the production of 11,000 finished units of product.According to engineering specifications,each finished unit had a manufacturing standard of five gallons.If a review of Courtney's accounting records at the end of the period disclosed a material price variance of $5,000U and a material quantity variance of $3,000F,determine the actual price paid for a gallon of direct material.

Accepted Answer

A) $0.50. 
B) $0.60. 
C) $0.70. 
D) An amount other than those shown above. 
E) Not enough information to judgE.

Exam 10: Standard Costing,Operational Performance Measures,and the Balanced Scorecard