Question 1

Which of the following is NOT true about Kaizen Standards?

Accepted Answer

A)  Kaizen standards are the standards used for continuous improvement. 
B)  Kaizen standards are a currently attainable standard that reflects planned improvement. 
C)  Kaizen standards are constantly changing. 
D)  Kaizen standards are the standards used in traditional costing systems.

Question 2

Spencer Company manufactures a single product that has a standard materials cost of $20 (4 units of materials at $5 per unit), standard direct labor cost of $9 (1 hour per unit), and standard variable overhead cost of $4 (based on direct labor hours).Fixed overhead is budgeted at $17,000 per month.The following data pertain to operations for May 2011:
  Required:

Accepted Answer

The answer of Spencer Company manufactures a single product that...

Question 3

A mix variance is

Accepted Answer

A)  created whenever the actual mix of inputs differs from the standard mix. 
B)  the difference in the standard cost of the actual mix of inputs used and the standard cost of the mix of inputs that should have been used. 
C)  both 'a' and 'b' are correct. 
D)  none of these are correct.

Question 4

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 5

Harry 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 Harry?

Accepted Answer

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

Question 6

During September, 40,000 units were produced.The standard quantity of material allowed per unit was 5 pounds at a standard cost of $2.50 per pound.If there was a favorable usage variance of $25,000 for September, the actual quantity of materials used must have been

Accepted Answer

A)  210,000 pounds. 
B)  190,000 pounds. 
C)  105,000 pounds. 
D)  95,000 pounds.

Question 7

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 8

Max Company has developed the following standards for one of its products.  The company records materials price variances at the time of purchase.
The direct materials price variance is

Accepted Answer

A)  $50,000 favorable. 
B)  $50,000 unfavorable. 
C)  $10,000 unfavorable. 
D)  $10,000 favorable.

Question 9

The following standard costs were developed for one of the products of Larry Corporation:
  The following information is available regarding the company's operations for the period:
  Budgeted fixed manufacturing overhead for the period is $960,000, and the standard fixed overhead rate is based on expected capacity of 80,000 direct labor hours.
Required:

Accepted Answer

The answer of The following standard costs were developed for...

Question 10

During August, 10,000 units were produced.The standard quantity of material allowed per unit was 10 pounds at a standard cost of $3 per pound.If there was an unfavorable usage variance of $18,750 for August, the actual quantity of materials used must be

Accepted Answer

A)  106,250 pounds. 
B)  93,750 pounds. 
C)  31,875 pounds. 
D)  23,438 pounds.

Question 11

Price/rate variances focus on the differences between

Accepted Answer

A)  actual and standard inputs multiplied by actual prices. 
B)  actual and standard unit prices of an input multiplied by the actual quantity of inputs. 
C)  actual and standard inputs multiplied by standard prices. 
D)  actual and standard unit prices of an input multiplied by the budgeted quantity of inputs.

Question 12

Claire Company uses a standard costing system.The following information pertains to direct labor costs for the month of February:  
-How many actual labor hours were worked during February for Claire Company?

Accepted Answer

A)  10,000 
B)  2,000 
C)  1,200 
D)  12,000

Question 13

Bread Company has developed the following standards for one of its products.  The company records materials price variances at the time of purchase.
-
The direct labor rate variance is

Accepted Answer

A)  $8,000 unfavorable. 
B)  $8,000 favorable. 
C)  $12,000 unfavorable. 
D)  $12,000 favorable.

Question 14

Which of the following equations measures a price variance?

Accepted Answer

A)  AQ ´ (AP - SP) 
B)  SP ´ (AQ - SQ) 
C)  SQ ´ (AP - SP) 
D)  (AQ - SQ) ´ (AP - SP)

Question 15

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

Accepted Answer

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

Question 16

During June, 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)  $7.50. 
D)  $7.00.

Question 17

The standard overhead cost assigned to each unit of product manufactured is called the

Accepted Answer

A)  total manufacturing cost. 
B)  predetermined overhead cost. 
C)  applied overhead cost. 
D)  estimated overhead cost.

Question 18

A materials price variance would NOT be caused by

Accepted Answer

A)  ordering the wrong quality of materials. 
B)  ordering from the wrong supplier. 
C)  not taking a quantity discount. 
D)  requiring laborers to work overtime.

Question 19

Frekko Company collected the following information: 
- Using the two variance method, what is the total variance?

Accepted Answer

A)  $30,000 (U) 
B)  $30,000 (F) 
C)  $70,000 (F) 
D)  $70,000 (U)

Question 20

Figure 9-4 Regis 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 usage variance?

Accepted Answer

A)  $10,000 (U) 
B)  $ 8,000 (U) 
C)  $ 8,000 (F) 
D)  $18,000 (U)

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

Which of the following is NOT true about Kaizen Standards?

A mix variance is

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

During September, 40,000 units were produced.The standard quantity of material allowed per unit was 5 pounds at a standard cost of $2.50 per pound.If there was a favorable usage variance of $25,000 for September, the actual quantity of materials used must have been

The unit standard cost is

Max Company has developed the following standards for one of its products. The company records materials price variances at the time of purchase. The direct materials price variance is

During August, 10,000 units were produced.The standard quantity of material allowed per unit was 10 pounds at a standard cost of $3 per pound.If there was an unfavorable usage variance of $18,750 for August, the actual quantity of materials used must be

Price/rate variances focus on the differences between

Claire Company uses a standard costing system.The following information pertains to direct labor costs for the month of February: -How many actual labor hours were worked during February for Claire Company?

Bread Company has developed the following standards for one of its products. The company records materials price variances at the time of purchase. - The direct labor rate variance is

Which of the following equations measures a price variance?

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

During June, 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

The standard overhead cost assigned to each unit of product manufactured is called the

A materials price variance would NOT be caused by

Frekko Company collected the following information: - Using the two variance method, what is the total variance?

Figure 9-4 Regis 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 usage variance?