Question 1

Standard cost cards are the subsidiary ledger for the Work in Process account in a standard cost system.

Accepted Answer

A) True 
 B)False

Question 2

Allowance for spoilage is part of the direct

Accepted Answer

A)  materials price standard.
B)  materials quantity standard.
C)  labor price standard.
D)  labor quantity standard.

Question 3

A favorable variance

Accepted Answer

A)  is an indication that the company is not operating in an optimal manner.
B)  implies a positive result if quality control standards are met.
C)  implies a positive result if standards are flexible.
D)  means that standards are too loosely specified.

Question 4

If actual costs are greater than standard costs, there is a(n)

Accepted Answer

A)  normal variance.
B)  unfavorable variance.
C)  favorable variance.
D)  error in the accounting system.

Question 5

In Zero Company's income statement, they report actual gross profit of $52,500 and the following variances:   Materials price $420 F Materials quantity 600 F Labor price 420U Labor quantity 1,000 F Overhead 900 F\begin{array} { l r r } 	ext { Materials price } & \$ 420 \mathrm {~F} \	ext { Materials quantity } & 600 \mathrm {~F} \	ext { Labor price } & 420 \mathrm { U } \	ext { Labor quantity } & 1,000 \mathrm {~F} \	ext { Overhead } & 900 \mathrm {~F}\end{array} Materials price  Materials quantity  Labor price  Labor quantity  Overhead ​$420 F600 F420U1,000 F900 F​  Zero would report gross profit at standard of

Accepted Answer

A)  $46,660.
B)  $47,500.
C)  $55,000.
D)  $53,340.

Question 6

The two levels that standards may be set at are

Accepted Answer

A)  normal and fully efficient.
B)  normal and ideal.
C)  ideal and less efficient.
D)  fully efficient and fully effective.

Question 7

The customer perspective of the balanced scorecard approach

Accepted Answer

A)  is the most traditional view of the company.
B)  evaluates the internal operating processes critical to the success of the organization.
C)  evaluates how well the company develops and retains its employees.
D)  evaluates the company from the viewpoint of those people who buy its products or services.

Question 8

The starting point for determining the causes of an unfavorable materials price variance is the purchasing department.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not considered an advantage of using standard costs?

Accepted Answer

A)  Standard costs can reduce clerical costs.
B)  Standard costs can be useful in setting prices for finished goods.
C)  Standard costs can be used as a means of finding fault with performance.
D)  Standard costs can make employees "cost-conscious."

Question 10

The overhead volume variance relates only to fixed overhead costs.

Accepted Answer

A) True 
 B)False

Question 11

Using standard costs

Accepted Answer

A)  makes employees less "cost-conscious."
B)  provides a basis for evaluating cost control.
C)  makes management by exception more difficult.
D)  increases clerical costs.

Question 12

The balanced scorecard

Accepted Answer

A)  incorporates financial and nonfinancial measures in an integrated system.
B)  is based on financial measures.
C)  is based on nonfinancial measures.
D)  does not use financial or nonfinancial measures.

Question 13

A company uses 20,000 pounds of materials for which it paid $6.00 a pound.The materials price variance was $15,000 unfavorable.What is the standard price per pound?

Accepted Answer

A)  $0.75
B)  $5.25
C)  $6.00
D)  $6.75

Question 14

The standard quantity allowed for the units produced was 4,500 pounds, the standard price was $2.50 per pound, and the materials quantity variance was $375 favorable.Each unit uses 1 pound of materials.How many units were actually produced?

Accepted Answer

A)  4,350
B)  4,500
C)  11,625
D)  4,650

Question 15

The standard direct materials quantity does not include allowances for

Accepted Answer

A)  unavoidable waste.
B)  normal spoilage.
C)  unexpected spoilage.
D)  all of the above are included.

Question 16

The predetermined overhead rate for Zane Company is $5, comprised of a variable overhead rate of $3 and a fixed rate of $2.The amount of budgeted overhead costs at normal capacity of $150,000 was divided by normal capacity of 30,000 direct labor hours, to arrive at the predetermined overhead rate of $5.Actual overhead for June was $9,500 variable and $6,050 fixed, and standard hours allowed for the product produced in June was 3,000 hours. The total overhead variance is

Accepted Answer

A)  $3,050 F.
B)  $550 F.
C)  $550 U.
D)  $3,050 U.

Question 17

Standard cost is the industry average cost for a particular item.

Accepted Answer

A) True 
 B)False

Question 18

In developing a standard cost for direct materials, a price factor and a quantity factor must be considered.

Accepted Answer

A) True 
 B)False

Question 19

Which one of the following describes the total overhead variance?

Accepted Answer

A)  The difference between what was actually incurred and the flexible budget amount
B)  The difference between what was actually incurred and overhead applied
C)  The difference between the overhead applied and the flexible budget amount
D)  The difference between what was actually incurred and the total production budget

Question 20

If the materials price variance is $3,600 F and the materials quantity and labor variances are each $2,700 U, what is the total materials variance?

Accepted Answer

A)  $3,600 F
B)  $2,700 U
C)  $900 F
D)  $4,050 U

Exam 11: Reporting and Analyzing Stockholders Equity

Correct Answer
verified

Using standard costs

Correct Answer
verified

In developing a standard cost for direct materials, a price factor and a quantity factor must be considered.

Correct Answer
verified

A company uses 20,000 pounds of materials for which it paid $6.00 a pound.The materials price variance was $15,000 unfavorable.What is the standard price per pound?

Correct Answer
verified

Correct Answer
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Which one of the following describes the total overhead variance?

Correct Answer
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The customer perspective of the balanced scorecard approach

Correct Answer
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Allowance for spoilage is part of the direct

Correct Answer
verified

The balanced scorecard

Correct Answer
verified

The overhead volume variance relates only to fixed overhead costs.

Correct Answer
verified

If actual costs are greater than standard costs, there is a(n)

Correct Answer
verified

Standard cost is the industry average cost for a particular item.

Correct Answer
verified

The starting point for determining the causes of an unfavorable materials price variance is the purchasing department.

Correct Answer
verified

Which of the following is not considered an advantage of using standard costs?

Correct Answer
verified

The standard direct materials quantity does not include allowances for

Correct Answer
verified

If the materials price variance is $3,600 F and the materials quantity and labor variances are each $2,700 U, what is the total materials variance?

Correct Answer
verified

The two levels that standards may be set at are

Correct Answer
verified

The standard quantity allowed for the units produced was 4,500 pounds, the standard price was $2.50 per pound, and the materials quantity variance was $375 favorable.Each unit uses 1 pound of materials.How many units were actually produced?

Correct Answer
verified

A favorable variance

Correct Answer
verified

Standard cost cards are the subsidiary ledger for the Work in Process account in a standard cost system.

Correct Answer
verified

Exam 11: Reporting and Analyzing Stockholders Equity

Correct AnswerverifiedShow Answer

Using standard costs

Correct AnswerverifiedShow Answer

In developing a standard cost for direct materials, a price factor and a quantity factor must be considered.

Correct AnswerverifiedShow Answer

A company uses 20,000 pounds of materials for which it paid $6.00 a pound.The materials price variance was $15,000 unfavorable.What is the standard price per pound?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which one of the following describes the total overhead variance?

Correct AnswerverifiedShow Answer

The customer perspective of the balanced scorecard approach

Correct AnswerverifiedShow Answer

Allowance for spoilage is part of the direct

Correct AnswerverifiedShow Answer

The balanced scorecard

Correct AnswerverifiedShow Answer

The overhead volume variance relates only to fixed overhead costs.

Correct AnswerverifiedShow Answer

If actual costs are greater than standard costs, there is a(n)

Correct AnswerverifiedShow Answer

Standard cost is the industry average cost for a particular item.

Correct AnswerverifiedShow Answer

The starting point for determining the causes of an unfavorable materials price variance is the purchasing department.

Correct AnswerverifiedShow Answer

Which of the following is not considered an advantage of using standard costs?

Correct AnswerverifiedShow Answer

The standard direct materials quantity does not include allowances for

Correct AnswerverifiedShow Answer

If the materials price variance is $3,600 F and the materials quantity and labor variances are each $2,700 U, what is the total materials variance?

Correct AnswerverifiedShow Answer

The two levels that standards may be set at are

Correct AnswerverifiedShow Answer

The standard quantity allowed for the units produced was 4,500 pounds, the standard price was $2.50 per pound, and the materials quantity variance was $375 favorable.Each unit uses 1 pound of materials.How many units were actually produced?

Correct AnswerverifiedShow Answer

A favorable variance

Correct AnswerverifiedShow Answer

Standard cost cards are the subsidiary ledger for the Work in Process account in a standard cost system.

Correct AnswerverifiedShow Answer

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