Question 1

The performance standard usually considered best in setting standard costs is?

Accepted Answer

A) Historical 
B) Attainable 
C) Average 
D) Ideal

Question 2

The item,department or job for which costs are accumulated is called a:

Accepted Answer

A) Cost object 
B) Responsibility centre 
C) Business 
D) Balanced scorecard

Question 3

A____________________ standards are preferred because they represent targets that can be achieved with a reasonable efficient effort.

Accepted Answer

The answer of A____________________ standards are preferred because they represent...

Question 4

A v_____________ is the difference between expected and actual results.

Accepted Answer

The answer of A v_____________ is the difference between expected...

Question 5

Ten minutes of direct labour is needed to produce one unit of product and direct labour is paid $24 per hour.Budgeted output for the period is estimated to be 8,000 units.Actual output for the period turns out to be 8,500 units and actual labour costs are $36,200 What budgeted direct labour amount should actual direct labour costs be compared to in order to calculate a valid variance?

Accepted Answer

A) $32,000 
B) $19,200 
C) $20,400 
D) $34,000

Question 6

Compute the correct variances: Budgeted sales $110,000: Actual sales $118,000.Actual direct labour $40,000: Budgeted direct labour $42,000.

Accepted Answer

A) Sales variance $8,000 F: Direct labour variance $2,000 F 
B) Sales variance $8,000 F: Direct labour variance $2,000 U 
C) Sales variance $8,000 U: Direct labour variance $2,000 F 
D) Sales variance $6,000 U: Direct labour variance $4,000 U

Question 7

Which of these statements is not true? A responsibility accounting system:

Accepted Answer

A) Recognises that expenses are the collective responsibility of the organisation 
B) Requires managers to participate in the development of financial plans for their unit 
C) Measures separately the performance of each manager's area of responsible 
D) Holds managers responsible for costs and income over which they have control

Exam 13: Performance Evaluation for Managers