Question 1

In computing efficiency variances, managers compute the standard quantity of materials used and the standard hours allowed.

Accepted Answer

A) True 
 B)False

Question 2

Montana Company uses a standard costing system. The following information pertains to direct labor costs for the month of February:  What is the total labor budget variance for Montana Company?

Accepted Answer

A)  $18,000 (F) 
B)  $12,000 (U) 
C)  $18,000 (U) 
D)  $12,000 (F)

Question 3

Harrangue Company's standard variable overhead rate is $6 per direct labor hour, and each unit requires 2 standard direct labor hours. During March, Harry recorded 6,000 actual direct labor hours, $37,000 actual variable overhead costs, and 2,900 units of product manufactured. What is the total variable overhead variance for March for Harrangue?

Accepted Answer

A)  $2,200 (U) 
B)  $600 (U) 
C)  $1,000 (U) 
D)  $1,200 (U)

Question 4

United Carborundum Company manufactures 100-pound bags of chemicals that have the following unit standard costs for direct materials and direct labor:
  The following activities were recorded for October:
  There were no beginning or ending work-in-process inventories.
Required:

Accepted Answer

The answer of United Carborundum Company manufactures 100-pound bags of...

Question 5

Total fixed overhead budget variance is always equal to

Accepted Answer

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

Question 6

The direct materials price variance is the difference between actual and standard pricing.

Accepted Answer

A) True 
 B)False

Question 7

Both manufacturing and service firms may use standard costing systems.

Accepted Answer

A) True 
 B)False

Question 8

The unit standard cost is

Accepted Answer

A)  the product of the standard price times the standard quantity for each unit. 
B)  the price standard for each unit. 
C)  the actual cost for a standard product. 
D)  the amount of actual cost to produce a unit in a standardized process.

Question 9

Fixed manufacturing overhead was budgeted at $200,000, and 25,000 direct labor hours were budgeted. If the fixed overhead volume variance was $8,000 favorable and the fixed overhead spending variance was $6,000 unfavorable, fixed manufacturing overhead applied must be

Accepted Answer

A)  $208,000. 
B)  $206,000. 
C)  $202,000. 
D)  $194,000.

Question 10

Formidable Company collected the following information:  Using the three variance method, what is the budget variance?

Accepted Answer

A)  $24,000 (U) 
B)  $24,000 (F) 
C)  $6,000 (U) 
D)  $6,000 (F)

Question 11

Croissant Company's standard fixed overhead cost is $6 per direct labor hour based on budgeted fixed costs of $600,000. The standard allows one direct labor hour per unit. During 2014, Crawford produced 110,000 units of product, (within the relevant range of activity) incurred $630,000 of fixed overhead costs, and recorded 212,000 actual hours of direct labor. What is Croissant's fixed overhead spending variance for 2014?

Accepted Answer

A)  $60,000 (F) 
B)  $24,000 (F) 
C)  $30,000 (U) 
D)  $36,000 (U)

Question 12

The __________ variance show the difference between actual output and expected output for a given amount of input.

Accepted Answer

The answer of The __________ variance show the difference between...

Question 13

During October, 10,000 direct labor hours were worked at a standard cost of $10 per hour. If the direct labor rate variance for October was $4,000 unfavorable, the actual cost per direct labor hour must be

Accepted Answer

A)  $10.40. 
B)  $10.00. 
C)  $9.60. 
D)  $9.20.

Question 14

Which of the following equations measures the direct labor rate variance?

Accepted Answer

A)  (SR ´ AH) - (SR ´ SH) 
B)  (AR ´ SH) - (SR ´ AH) 
C)  (AR ´ AH) - (SR ´ AH) 
D)  none of these

Question 15

Croissant Company's standard fixed overhead cost is $6 per direct labor hour based on budgeted fixed costs of $600,000. The standard allows 1 direct labor hour per unit. During 2014, Croissant produced 110,000 units of product, incurred $630,000 of fixed overhead costs, and recorded 212,000 actual hours of direct labor. What is Croissant's fixed overhead volume variance for 2014?

Accepted Answer

A)  $60,000 (U) 
B)  $24,000 (F) 
C)  $36,000 (U) 
D)  $60,000 (F)

Question 16

The standard cost sheet includes all of the following EXCEPT

Accepted Answer

A)  the standard quantity per unit. 
B)  the standard material costs per unit. 
C)  the standard cost per unit. 
D)  the standard labor hours allowed for actual production.

Question 17

Figure 9-4 San Francisco Corporation uses two materials in the production of its product. The materials, X and Y, have the following standards:
 During April, the following actual production information was provided:
 Refer to Figure 9-4. What is the materials yield variance?

Accepted Answer

A)  $4,000 (F) 
B)  $4,000 (U) 
C)  $8,000 (F) 
D)  $8,000 (U)

Question 18

Formidable Company collected the following information:   Using the three variance method, what is the spending variance?

Accepted Answer

A)  $36,000 (F) 
B)  $30,000 (U) 
C)  $36,000 (U) 
D)  $30,000 (F)

Question 19

The sum of the standard plus allowable deviation is called the upper __________ .

Accepted Answer

The answer of The sum of the standard plus allowable...

Question 20

During September, 12,000 pounds of materials were purchased at a cost of $8 per pound. If there was an unfavorable direct materials price variance of $6,000 for June, the standard cost per pound must be

Accepted Answer

A)  $8.50. 
B)  $8.00. 
C)  $7.00. 
D)  $7.50.

Exam 9: Standard Costing: a Functional-Based Control Approach

In computing efficiency variances, managers compute the standard quantity of materials used and the standard hours allowed.

Montana Company uses a standard costing system. The following information pertains to direct labor costs for the month of February: What is the total labor budget variance for Montana Company?

United Carborundum Company manufactures 100-pound bags of chemicals that have the following unit standard costs for direct materials and direct labor: The following activities were recorded for October: There were no beginning or ending work-in-process inventories. Required:

Total fixed overhead budget variance is always equal to

The direct materials price variance is the difference between actual and standard pricing.

Both manufacturing and service firms may use standard costing systems.

The unit standard cost is

Fixed manufacturing overhead was budgeted at $200,000, and 25,000 direct labor hours were budgeted. If the fixed overhead volume variance was $8,000 favorable and the fixed overhead spending variance was $6,000 unfavorable, fixed manufacturing overhead applied must be

Formidable Company collected the following information: Using the three variance method, what is the budget variance?

The __________ variance show the difference between actual output and expected output for a given amount of input.

During October, 10,000 direct labor hours were worked at a standard cost of $10 per hour. If the direct labor rate variance for October was $4,000 unfavorable, the actual cost per direct labor hour must be

Which of the following equations measures the direct labor rate variance?

The standard cost sheet includes all of the following EXCEPT

Figure 9-4 San Francisco Corporation uses two materials in the production of its product. The materials, X and Y, have the following standards: During April, the following actual production information was provided: Refer to Figure 9-4. What is the materials yield variance?

Formidable Company collected the following information: Using the three variance method, what is the spending variance?

The sum of the standard plus allowable deviation is called the upper __________ .

During September, 12,000 pounds of materials were purchased at a cost of $8 per pound. If there was an unfavorable direct materials price variance of $6,000 for June, the standard cost per pound must be