Question 1

Standard costs are determined by multiplying expected price by expected quantity.

Accepted Answer

A) True 
 B)False

Question 2

The formula to compute the direct labor rate variance is to calculate the difference between

Accepted Answer

A)   Actual costs + (Actual hours × Standard rate) 
B)   Actual costs - Standard cost
C)   (Actual hours × Standard rate) - Standard costs
D)   Actual costs - (Actual hours × Standard rate) E) B) and D)
F) A) and C)

Question 3

The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are ​​
 The amount of the direct materials quantity variance is

Accepted Answer

A)   $875 favorable variance
B)   $850 unfavorable variance
C)   $850 favorable variance
D)   $875 unfavorable varianceE) B) and D)
F) All of the above

Question 4

The labor rate variance is

Accepted Answer

A)   $4,920 unfavorable
B)   $4,920 favorable
C)   $4,560 favorable
D)   $4,560 unfavorableE) None of the above
F) B) and C)

Question 5

Volume variance measures the use of fixed factory overhead resources.

Accepted Answer

A) True 
 B)False

Question 6

Variances from standard costs are reported to

Accepted Answer

A)   suppliers
B)   stockholders
C)   management
D)   creditorsE) All of the above
F) C) and D)

Question 7

Calculate the total direct materials cost variance.

Accepted Answer

A)   $9,262.50 unfavorable
B)   $9,262.50 favorable
C)   $3,780.00 unfavorable
D)   $3,562.50 favorableE) All of the above
F) B) and D)

Question 8

Standard costs are used in companies for a variety of reasons.Which of the following is not one of the benefits for using standard costs?

Accepted Answer

A)   used to indicate where changes in technology and machinery need to be made
B)   used to estimate cost of inventory
C)   used to plan direct materials,direct labor,and variable factory overhead
D)   used to control costsE) All of the above
F) A) and C)

Question 9

A favorable cost variance occurs when

Accepted Answer

A)   actual costs are more than standard costs
B)   standard costs are more than actual costs
C)   standard costs are less than actual costs
D)   actual costs are the same as standard costsE) A) and B)
F) C) and D)

Question 10

Incurring actual indirect factory wages in excess of budgeted amounts for actual production results in a

Accepted Answer

A)   quantity variance
B)   controllable variance
C)   volume variance
D)   rate varianceE) B) and D)
F) C) and D)

Question 11

Non-financial measures are often linked to the inputs or outputs of an activity or process.

Accepted Answer

A) True 
 B)False

Question 12

A negative fixed overhead volume variance can be caused due to the following except

Accepted Answer

A)   sales orders at a low level
B)   machine breakdowns
C)   employee inexperience
D)   increase in utility costsE) A) and B)
F) All of the above

Question 13

The formula to the compute direct labor time variance is to calculate the difference between

Accepted Answer

A)   Actual costs - Standard costs
B)   Actual costs + Standard costs
C)   (Actual hours × Standard rate) - Standard costs
D)   Actual costs - (Actual hours × Standard rate) E) A) and B)
F) A) and C)

Question 14

The following data is given for the Bahia Company: ​
 Overhead is applied on standard labor hours.
The fixed factory overhead volume variance is

Accepted Answer

A)   $65 unfavorable
B)   $65favorable
C)   $540 unfavorable
D)   $540 favorableE) B) and C)
F) B) and D)

Question 15

The principle of exceptions allows managers to focus on correcting variances between

Accepted Answer

A)   standard costs and actual costs
B)   variable costs and actual costs
C)   competitor's costs and actual costs
D)   competitor's costs and standard costsE) All of the above
F) A) and B)

Question 16

Nonfinancial performance output measures are used to improve the input measures.

Accepted Answer

A) True 
 B)False

Question 17

Though favorable fixed factory overhead volume variances are usually good news,if inventory levels are too high,additional production could be harmful.

Accepted Answer

A) True 
 B)False

Question 18

At the end of the fiscal year,variances from standard costs are usually transferred to the

Accepted Answer

A)   direct labor account
B)   factory overhead account
C)   cost of goods sold account
D)   direct materials accountE) A) and C)
F) A) and D)

Question 19

What is the amount of the variable factory overhead controllable variance?

Accepted Answer

A)   $10,000 favorable
B)   $2,500 unfavorable
C)   $10,000 unfavorable
D)   $2,500 favorableE) All of the above
F) A) and B)

Question 20

Accounting systems that use standards for product costs are called standard cost systems.

Accepted Answer

A) True 
 B)False

Exam 22: Evaluating Variances From Standard Costs

Standard costs are determined by multiplying expected price by expected quantity.

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The labor rate variance is

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Nonfinancial performance output measures are used to improve the input measures.

Correct AnswerverifiedShow Answer

The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are ​​ The amount of the direct materials quantity variance is

Correct AnswerverifiedShow Answer

At the end of the fiscal year,variances from standard costs are usually transferred to the

Correct AnswerverifiedShow Answer

Volume variance measures the use of fixed factory overhead resources.

Correct AnswerverifiedShow Answer

Variances from standard costs are reported to

Correct AnswerverifiedShow Answer

Accounting systems that use standards for product costs are called standard cost systems.

Correct AnswerverifiedShow Answer

A favorable cost variance occurs when

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What is the amount of the variable factory overhead controllable variance?

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The formula to compute the direct labor rate variance is to calculate the difference between

Correct AnswerverifiedShow Answer

Calculate the total direct materials cost variance.

Correct AnswerverifiedShow Answer

The principle of exceptions allows managers to focus on correcting variances between

Correct AnswerverifiedShow Answer

Incurring actual indirect factory wages in excess of budgeted amounts for actual production results in a

Correct AnswerverifiedShow Answer

A negative fixed overhead volume variance can be caused due to the following except

Correct AnswerverifiedShow Answer

Non-financial measures are often linked to the inputs or outputs of an activity or process.

Correct AnswerverifiedShow Answer

Standard costs are used in companies for a variety of reasons.Which of the following is not one of the benefits for using standard costs?

Correct AnswerverifiedShow Answer

The following data is given for the Bahia Company: ​ Overhead is applied on standard labor hours. The fixed factory overhead volume variance is

Correct AnswerverifiedShow Answer

The formula to the compute direct labor time variance is to calculate the difference between

Correct AnswerverifiedShow Answer

Though favorable fixed factory overhead volume variances are usually good news,if inventory levels are too high,additional production could be harmful.

Correct AnswerverifiedShow Answer

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The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are The amount of the direct materials quantity variance is

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The following data is given for the Bahia Company: Overhead is applied on standard labor hours. The fixed factory overhead volume variance is

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