Question 1

Engineering studies are often too rigorous and may not be achievable by operating personnel.

Accepted Answer

A) True 
 B)False

Question 2

The ____________________ is the difference between the actual cost of the input and its planned cost.

Accepted Answer

The answer of The ____________________ is the difference between the...

Question 3

An accountant would refer to a cost sheet to perform which of the following actions?

Accepted Answer

A)  Calculate standard cost per unit. 
B)  Calculate efficiency variances. 
C)  Calculate the total amount of inputs allowed for the actual output. 
D)  All of these.

Question 4

Kris Company calculates its predetermined rates using practical volume, which is 325,000 units.The standard cost system allows 3 direct labor hours per unit produced.Overhead is applied using direct labor hours.The total budgeted overhead is $4,260,000, of which $994,000 is fixed overhead.The actual results for the year are as follows:

- 
Calculate the fixed overhead volume variance.

Accepted Answer

A)  $32,000 U 
B)  $20,000 F 
C)  $22,000 F 
D)  $4,000 U 
E)  None of these.

Question 5

The sources of quantitative standards include

Accepted Answer

A)  historical experience. 
B)  engineering studies. 
C)  input from operating personnel. 
D)  historical experience, engineering studies, and input from operating personnel. 
E)  None of these.

Question 6

During January, 7,000 direct labor hours were worked at a standard cost of $20 per hour.If the direct labor rate variance for January was $17,500 favorable, the actual cost per direct labor hour must be

Accepted Answer

A)  $17.50. 
B)  $20.00. 
C)  $22.50. 
D)  $25.00.

Question 7

The actual quantity of input at the standard price less than the standard quantity of input at the standard price equals the usage variance.

Accepted Answer

A) True 
 B)False

Question 8

Kris Company calculates its predetermined rates using practical volume, which is 325,000 units.The standard cost system allows 3 direct labor hours per unit produced.Overhead is applied using direct labor hours.The total budgeted overhead is $4,260,000, of which $994,000 is fixed overhead.The actual results for the year are as follows:

- The predetermined variable overhead rate is

Accepted Answer

A)  $3.00 per direct labor hour. 
B)  $2.50 per direct labor hour. 
C)  $5.50 per direct labor hour. 
D)  $3.35 per direct labor hour. 
E)  None of these are correct.

Question 9

Kaizen costing provides fixed standards which reflect continuous improvement efforts.

Accepted Answer

A) True 
 B)False

Question 10

Price changes of variable overhead items are easily controlled by production supervisors.

Accepted Answer

A) True 
 B)False

Question 11

During September, a small roofing company purchased 200 bundles of a certain type of shingle at a price of $25 per bundle, $5 less than the standard price.Its standard quantity of this type of shingle is 400 bundles.What is the journal entry to record the purchase of materials?

Accepted Answer

A)  
 
B)  
 
C)   
D)

Question 12

Which of the following expressions is used to calculate the labor efficiency variance?

Accepted Answer

A)  (Efficiency hours × Actual hours) - (Variance hours × Standard rate) 
B)  (Variance Rate × Actual Hours) - (Overhead Rate × Actual Hours) 
C)  (Actual Hours × Standard Rate) - (Standard Hours × Standard Rate) 
D)  (Overtime Hours × Actual Rate) - (Premium Hours × Actual Rate) 
E)  None of these

Question 13

Price standards are based on

Accepted Answer

A)  the amount of input that should be used per unit of output. 
B)  the amount that should be paid for the total quantity of input to be used. 
C)  the amount that should be paid per unit of output. 
D)  the amount that should be paid per unit of input purchased. 
E)  None of these.

Question 14

James Company manufactures t-shirts.During the year, it manufactured 250,000 t-shirts, using 2 hours of direct labor at a rate of $8.50 per hour.The materials and labor standards for manufacturing the t-shirts are:

- It took James 1,400,000 yards at $2.50 per yard to make the 250,000 t-shirts.
What is the entry to close the variances of labor and materials?

Accepted Answer

A) 
 
B)  
 
C) 
 
D)

Question 15

Which of the following is not an advantage of standard costing over normal costing and actual costing?

Accepted Answer

A)  A greater capacity for control. 
B)  Ability to easily distinguish the FIFO and weighted average methods of accounting for beginning inventory costs. 
C)  Computing a unit cost for each equivalent unit cost category is not necessary. 
D)  Providing for readily available unit cost information. 
E)  All of these are advantages of standard costing.

Question 16

Which of the following is the difference between the actual cost of materials and the materials cost allowed for the actual level of activity?

Accepted Answer

A)  Total materials variance 
B)  Total materials regression 
C)  Total materials cost 
D)  Total materials margin 
E)  None of these

Question 17

The _____________________ measures the aggregate effect of differences between the actual variable overhead rate and the standard variable overhead rate.

Accepted Answer

The answer of The _____________________ measures the aggregate effect of...

Question 18

James Company manufactures t-shirts.During the year, it manufactured 250,000 t-shirts, using 2 hours of direct labor at a rate of $8.50 per hour.The materials and labor standards for manufacturing the t-shirts are:

-  It took James 1,400,000 yards at $2.50 per yard to make the 250,000 t-shirts.
What is James' materials usage variance?

Accepted Answer

A)  $250,000 F 
B)  $300,000 F 
C)  $300,000 U 
D)  $250,000 U

Question 19

Anemone Company produces picture frames.During the year, 200,000 picture frames were produced.Materials and labor standards for producing the picture frames are as follows: ​
​
 Anemone purchased and used 600,000 pieces of wood at $4.00 each, and its actual labor hours were 320,000 hours at a wage rate of $13.
​
What is Anemone's labor rate variance?

Accepted Answer

A)  $450,000 F 
B)  $320,000 U 
C)  $445,000 U 
D)  $660,500 F

Question 20

During April, a small roofing company purchased 400 bundles of a certain type of shingle at a price of $40 per bundle, $5 more than the standard price.The standard quantity of this type of shingle is 440 bundles. ?
What is the journal entry to record the purchase of materials?

Accepted Answer

A)  
 
B)  
 
C)  
 
D)

Exam 10: Standard Costing and Variance Analysis

Engineering studies are often too rigorous and may not be achievable by operating personnel.

The ____________________ is the difference between the actual cost of the input and its planned cost.

An accountant would refer to a cost sheet to perform which of the following actions?

The sources of quantitative standards include

During January, 7,000 direct labor hours were worked at a standard cost of $20 per hour.If the direct labor rate variance for January was $17,500 favorable, the actual cost per direct labor hour must be

The actual quantity of input at the standard price less than the standard quantity of input at the standard price equals the usage variance.

Kaizen costing provides fixed standards which reflect continuous improvement efforts.

Price changes of variable overhead items are easily controlled by production supervisors.

During September, a small roofing company purchased 200 bundles of a certain type of shingle at a price of $25 per bundle, $5 less than the standard price.Its standard quantity of this type of shingle is 400 bundles.What is the journal entry to record the purchase of materials?

Which of the following expressions is used to calculate the labor efficiency variance?

Price standards are based on

Which of the following is not an advantage of standard costing over normal costing and actual costing?

Which of the following is the difference between the actual cost of materials and the materials cost allowed for the actual level of activity?

The _____________________ measures the aggregate effect of differences between the actual variable overhead rate and the standard variable overhead rate.

During April, a small roofing company purchased 400 bundles of a certain type of shingle at a price of $40 per bundle, $5 more than the standard price.The standard quantity of this type of shingle is 440 bundles. ? What is the journal entry to record the purchase of materials?