Question 1

The standard price and quantity of direct materials are separated because

Accepted Answer

A)   GAAP and IFRS reporting requires separation
B)   direct materials prices are controlled by the purchasing department and quantity used is controlled by the production department
C)   standard prices are more difficult to estimate than standard quantities
D)   standard quantities change more frequently than standard pricesE) All of the above
F) C) and D)

Question 2

A company records inventory purchases at standard cost and also records purchase price variances. Prepare the journal entry for a purchase of 6,000 widgets that were bought at $8.00 and have a standard cost of $8.15.

Accepted Answer

The answer of A company records inventory purchases at standard...

Question 3

Robin Company purchased and used 500 pounds of direct materials to produce a product with a 520 pound standard direct materials requirement. The standard materials price is $1.90 per pound. The actual materials price was $2.00 per pound.
Prepare the journal entries to record 1) the purchase of the materials and 2) the material entering production.
  Materials (500 × $1.90)950
Direct Materials Price Variance (500 × $0.10)50
Accounts Payable (500 × $2.00)1,000

Accepted Answer

The answer of Robin Company purchased and used 500 pounds...

Question 4

The most effective means of presenting standard factory overhead cost variance data is through a factory overhead cost variance report.

Accepted Answer

A) True 
 B)False

Question 5

Define nonfinancial performance measures. What are they used for and what are some common examples?

Accepted Answer

Nonfinancial performance measures evalua...

Question 6

Standards are designed to evaluate price and quantity variances separately.

Accepted Answer

A) True 
 B)False

Question 7

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) C) and D)

Question 8

Favorable fixed factory overhead volume variances are never harmful, since achieving them encourages managers to run the factory above normal capacity.

Accepted Answer

A) True 
 B)False

Question 9

An example of a nonfinancial measure is the number of customer complaints.

Accepted Answer

A) True 
 B)False

Question 10

One reason not to depend solely on historical records to set standards is that there may be inefficiencies contained in past costs.

Accepted Answer

A) True 
 B)False

Question 11

Myers Corporation has the following data related to direct materials costs for November: actual costs for 5,000 pounds of material at $4.50; and standard costs for 4,800 pounds of material at $5.10 per pound. What is the direct materials quantity variance?

Accepted Answer

A)   $1,020 favorable
B)   $1,020 unfavorable
C)   $900 favorable
D)   $900 unfavorableE) B) and C)
F) None of the above

Question 12

Periodic comparisons between planned objectives and actual performance are reported in:

Accepted Answer

A)   zero-base reports
B)   budget performance reports
C)   master budgets
D)   budgetsE) A) and B)
F) None of the above

Question 13

What is the direct labor rate variance?

Accepted Answer

A)   $14,000 favorable
B)   $14,000 unfavorable
C)   $15,400 favorable
D)   $15,400 unfavorableE) A) and B)
F) B) and C)

Question 14

The labor time variance is

Accepted Answer

A)   $9,880 favorable
B)   $9,880 unfavorable
C)   $7,800 unfavorable
D)   $7,800 favorableE) B) and D)
F) All of the above

Question 15

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) C) and D)
F) A) and C)

Question 16

The controllable variance measures

Accepted Answer

A)   operating results at less than normal capacity
B)   the efficiency of using variable overhead resources
C)   operating results at more than normal capacity
D)   control over fixed overhead costsE) B) and D)
F) A) and D)

Question 17

The standard costs and actual costs for direct materials for the manufacture of 3,000 actual units of product are Standard Costs
Direct materials per completed unit) 1,040 kilograms at $8.75
Actual Costs
Direct materials
2,000 kilograms at $8.00
The amount of direct materials price variance is

Accepted Answer

A)   $2,750 unfavorable variance
B)   $2,750 favorable variance
C)   $1,500 favorable variance
D)   $1,500 unfavorable varianceE) B) and C)
F) All of the above

Question 18

Volume variance measures the use of fixed factory overhead resources.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A)   $73,250 unfavorable
B)   $73,250 favorable
C)   $59,400 favorable
D)   $59,400 unfavorableE) B) and C)
F) A) and B)

Question 20

Standard cost variances are usually not reported in reports to stockholders.

Accepted Answer

A) True 
 B)False

Exam 22: Performance Evaluation Using Variances From Standard Costs

Periodic comparisons between planned objectives and actual performance are reported in:

Correct Answer
verified

Favorable fixed factory overhead volume variances are never harmful, since achieving them encourages managers to run the factory above normal capacity.

Correct Answer
verified

Correct Answer
verified

What is the direct labor rate variance?

Correct Answer
verified

The standard price and quantity of direct materials are separated because

Correct Answer
verified

Calculate the total direct materials cost variance.

Correct Answer
verified

Volume variance measures the use of fixed factory overhead resources.

Correct Answer
verified

The most effective means of presenting standard factory overhead cost variance data is through a factory overhead cost variance report.

Correct Answer
verified

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

Correct Answer
verified

Standards are designed to evaluate price and quantity variances separately.

Correct Answer
verified

Define nonfinancial performance measures. What are they used for and what are some common examples?

Correct Answer
verified
Nonfinancial performance measures evalua...
View Answer

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

Correct Answer
verified

Myers Corporation has the following data related to direct materials costs for November: actual costs for 5,000 pounds of material at $4.50; and standard costs for 4,800 pounds of material at $5.10 per pound. What is the direct materials quantity variance?

Correct Answer
verified

Standard cost variances are usually not reported in reports to stockholders.

Correct Answer
verified

The controllable variance measures

Correct Answer
verified

A company records inventory purchases at standard cost and also records purchase price variances. Prepare the journal entry for a purchase of 6,000 widgets that were bought at $8.00 and have a standard cost of $8.15.

Correct Answer
verified

The standard costs and actual costs for direct materials for the manufacture of 3,000 actual units of product are Standard Costs Direct materials per completed unit) 1,040 kilograms at $8.75 Actual Costs Direct materials 2,000 kilograms at $8.00 The amount of direct materials price variance is

Correct Answer
verified

The labor time variance is

Correct Answer
verified

One reason not to depend solely on historical records to set standards is that there may be inefficiencies contained in past costs.

Correct Answer
verified

An example of a nonfinancial measure is the number of customer complaints.

Correct Answer
verified

Exam 22: Performance Evaluation Using Variances From Standard Costs

Periodic comparisons between planned objectives and actual performance are reported in:

Correct AnswerverifiedShow Answer

Favorable fixed factory overhead volume variances are never harmful, since achieving them encourages managers to run the factory above normal capacity.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What is the direct labor rate variance?

Correct AnswerverifiedShow Answer

The standard price and quantity of direct materials are separated because

Correct AnswerverifiedShow Answer

Calculate the total direct materials cost variance.

Correct AnswerverifiedShow Answer

Volume variance measures the use of fixed factory overhead resources.

Correct AnswerverifiedShow Answer

The most effective means of presenting standard factory overhead cost variance data is through a factory overhead cost variance report.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Standards are designed to evaluate price and quantity variances separately.

Correct AnswerverifiedShow Answer

Define nonfinancial performance measures. What are they used for and what are some common examples?

Correct AnswerverifiedNonfinancial performance measures evalua...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Myers Corporation has the following data related to direct materials costs for November: actual costs for 5,000 pounds of material at $4.50; and standard costs for 4,800 pounds of material at $5.10 per pound. What is the direct materials quantity variance?

Correct AnswerverifiedShow Answer

Standard cost variances are usually not reported in reports to stockholders.

Correct AnswerverifiedShow Answer

The controllable variance measures

Correct AnswerverifiedShow Answer

A company records inventory purchases at standard cost and also records purchase price variances. Prepare the journal entry for a purchase of 6,000 widgets that were bought at $8.00 and have a standard cost of $8.15.

Correct AnswerverifiedShow Answer

The standard costs and actual costs for direct materials for the manufacture of 3,000 actual units of product are Standard Costs Direct materials per completed unit) 1,040 kilograms at $8.75 Actual Costs Direct materials 2,000 kilograms at $8.00 The amount of direct materials price variance is

Correct AnswerverifiedShow Answer

The labor time variance is

Correct AnswerverifiedShow Answer

One reason not to depend solely on historical records to set standards is that there may be inefficiencies contained in past costs.

Correct AnswerverifiedShow Answer

An example of a nonfinancial measure is the number of customer complaints.

Correct AnswerverifiedShow Answer

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Correct Answer
verified

Correct Answer
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Correct Answer
verified
Nonfinancial performance measures evalua...
View Answer

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verified

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verified

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Correct Answer
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