1. (LO.1) Select the correct statement regarding standards.

a. A standard is a benchmark or norm used for planning and control.

b. The difference between standard cost and actual cost is referred to as a variance.

c. Standards are developed for materials, labor, and overhead.

d. All of the above

2. (LO.1) The document that summarizes the expected quantities and costs needed to produce a unit is called a

a. bill of materials.

b. total cost of ownership document.

c. operations flow document.

d. standard cost card.

3. (LO.2) This month R Company planned to produce 3,000 units of its product. The standard cost card calls for six pounds of material at $.30 per pound. Actual production for the month was 3,100 units, resulting in a favorable price variance of $380 and an unfavorable quantity variance of $120. Based on these variances, one could conclude that:

a. more materials were purchased than were used.

b. the actual cost of material was less than the standard cost.

c. the actual usage of material was less than the standard allowed.

d. the actual cost and usage of material were both less than standard.

4. (LO.2) An unfavorable direct labor efficiency variance could be caused by a (n):

a. unfavorable variable overhead spending variance.

b. unfavorable fixed overhead volume variance.

c. unfavorable material usage variance.

d. favorable fixed overhead volume variance.

5. (LO.2) The flexible budget for the month of August was for 9,000 units with direct material at $15 per unit. Direct labor was budgeted at 45 minutes per unit for a total of $81,000. Actual output for the month was 8,500 units with $127,500 in direct material and $77,775 in direct labor expense. Direct labor hours of 6,375 were actually worked during the month. Variance analysis would show:

a. a favorable direct labor efficiency variance of $1,275.

b. an unfavorable direct labor efficiency variance of $1,275.

c. an unfavorable direct labor rate variance of $1,275.

d. none of the above.

6. (LO.2) The total fixed overhead variance is the:

a. measure of the lost profits from the lack of sales volume.

b. amount of the underapplied or overapplied fixed overhead costs.

c. potential cost reduction that can be achieved from better cost control.

d. measure of production inefficiency.

7. (LO.2) Variable overhead is applied on the basis of standard direct labor hours. If the direct labor efficiency variance is favorable, the variable overhead efficiency variance will be:

a. unfavorable.

b. favorable.

c. zero.

d. the same amount as the labor efficiency variance.

8. (LO.2) Y Company’s product has a labor standard of 2 hours per unit. For 2011, it estimates its production will be 200,000 units (400,000 DLHs). It budgets total overhead at $900,000, which results in a fixed overhead rate of $1.50 per hour. Actual data for the year include: Actual production, 198,000 units (440,000 DLHs), Actual variable overhead, $352,000, Actual fixed overhead, $575,000 The variable overhead efficiency variance for the year is:

a. $66,000 unfavorable.

b. $35,520 favorable.

c. $33,000 favorable.

d. $33,000 unfavorable.

9. (LO.3) Standard cost systems should be used for all of the following reasons except:

a. motivation.

b. decision-making.

c. establishing blame.

d. clerical efficiency.

10. (LO.3) Select the correct statement from the following.

a. An extremely favorable variance is not necessarily a good variance.

b. There is a movement in practice toward reporting variances less often than in the past.

c. Only unfavorable variances need to be investigated.

d. For proper performance evaluation to be made, responsibility for variances should not be traced to specific managers.

11. (LO.4) The best basis upon which cost standards should be set to measure controllable production inefficiencies is:

a. engineering standards based on attainable performance.

b. normal capacity.

c. engineering standards.

d. ideal capacity.

12. (LO.5) Variance analysis for conversion cost in automated plants normally focuses on:

a. spending variances for overhead costs.

b. efficiency variances for machinery and production costs rather than labor costs.

c. volume variance for production.

d. all of the above.

13. (LO.6) (Appendix) A possible combination of materials or labor is called

a. materials-time measurement.

b. yield.

c. mix.

d. conversion.

14. (LO.6) (Appendix) A measure of the difference between the actual total quantity of input and the standard total quantity allowed based on output is called the

a. mix variance.

b. yield variance.

c. volume variance.

d. none of the above.

15. (LO.6) (Appendix) Select the correct equation for the labor mix variance.

a. (Actual mix x Actual hours x Actual rate) – (Actual mix x Actual hours x Standard rate)

b. (Actual mix x Actual hours x Standard rate) – (Actual mix x Actual hours x Standard rate)

c. (Actual mix x Actual hours x Standard rate) – (Standard mix x Actual hours x Standard rate)

d. (Standard mix x Actual hours x Standard rate) – (Standard mix x Standard hours x Standard rate)

Place New Order
It's Free, Fast & Safe

"Looking for a Similar Assignment? Order now and Get a Discount!