Question 1

At the end of the fiscal year,the variances from standard are usually transferred to the finished goods account.

Accepted Answer

A) True 
 B)False

Question 2

If the standard to produce a given amount of product is 600 direct labor hours at $15 and the actual was 600 hours at $17,the rate variance was $1,200 unfavorable.

Accepted Answer

A) True 
 B)False

Question 3

Calculate the total direct labor variance.

Accepted Answer

A)   $2,051.25 favorable
B)   $2,051.25 unfavorable
C)   $2,362.50 unfavorable
D)   $2,362.50 favorableE) A) and D)
F) None of the above A

Question 4

Normally,standard costs should be revised when labor rates change to incorporate new union contracts.

Accepted Answer

A) True 
 B)False

Question 5

Standards are designed to evaluate price and quantity variances separately.

Accepted Answer

A) True 
 B)False

Question 6

The amount of the fixed factory overhead volume variance is

Accepted Answer

A)   $2,000 favorable
B)   $2,000 unfavorable
C)   $2,500 unfavorable
D)   $0E) B) and C)
F) B) and D)

Question 7

Which of the following would not lend itself to applying direct labor variances?

Accepted Answer

A)   help desk assistant
B)   research and development scientist
C)   customer service personnel
D)   telemarketerE) B) and C)
F) All of the above

Question 8

The variance from standard for factory overhead cost resulting from operating at a level above or below 100% of normal capacity is termed volume variance.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not a reason for a direct materials quantity variance?

Accepted Answer

A)   malfunctioning equipment
B)   purchasing of inferior raw materials
C)   increased material cost per unit
D)   spoilage of materialsE) B) and D)
F) B) and C)

Question 10

Standards are more widely used for nonmanufacturing activities than for manufacturing activities.

Accepted Answer

A) True 
 B)False

Question 11

The following data relate to direct labor costs for the current period: ​
 What is the direct labor time variance?

Accepted Answer

A)   $18,000 favorable
B)   $18,000 unfavorable
C)   $17,550 unfavorable
D)   $17,550 favorableE) A) and C)
F) None of the above

Question 12

The difference between the standard cost of a product and its actual cost is called a variance.

Accepted Answer

A) True 
 B)False

Question 13

An unfavorable fixed factory overhead volume variance may be due to a failure of supervisors to maintain an even flow of work.

Accepted Answer

A) True 
 B)False

Question 14

Standards that represent levels of operation that can be attained with reasonable effort are called

Accepted Answer

A)   theoretical standards
B)   ideal standards
C)   variable standards
D)   normal standardsE) A) and B)
F) A) and C)

Question 15

Assuming that the standard fixed overhead rate is based on full capacity,the cost of available but unused productive capacity is indicated by the

Accepted Answer

A)   fixed factory overhead volume variance
B)   direct labor time variance
C)   direct labor rate variance
D)   variable factory overhead controllable varianceE) All of the above
F) A) and B)

Question 16

If the wage rate paid per hour differs from the standard wage rate per hour for direct labor,the variance is a

Accepted Answer

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

Question 17

The amount of the variable factory overhead controllable variance is

Accepted Answer

A)   $2,000 unfavorable
B)   $3,000 favorable
C)   $0
D)   $3,000 unfavorableE) C) and D)
F) B) and C) D

Question 18

If the actual quantity of direct materials used in producing a commodity differs from the standard quantity,the variance is a

Accepted Answer

A)   controllable variance
B)   price variance
C)   quantity variance
D)   rate varianceE) None of the above
F) B) and C) C

Question 19

The formula to compute the direct material quantity variance is to calculate the difference between

Accepted Answer

A)   Actual costs - Standard costs
B)   Standard costs - Actual costs
C)   (Actual quantity × Standard price) - Standard costs
D)   Actual costs - (Standard price × Standard costs) E) All of the above
F) C) and D)

Question 20

A company records its inventory purchases at standard cost but also records purchase price variances.The company purchased 5,000 widgets at $8.00 each,and the standard cost for the widgets is $7.60.Which of the following would be included in the journal entry?

Accepted Answer

A)   debit Accounts Payable,$38,000
B)   credit Direct Materials Price Variance,$2,000
C)   debit Accounts Payable,$2,000
D)   debit Direct Materials Price Variance,$2,000E) A) and B)
F) C) and D)

Exam 22: Evaluating Variances From Standard Costs

At the end of the fiscal year,the variances from standard are usually transferred to the finished goods account.

Correct AnswerverifiedShow Answer

If the standard to produce a given amount of product is 600 direct labor hours at $15 and the actual was 600 hours at $17,the rate variance was $1,200 unfavorable.

Correct AnswerverifiedShow Answer

Calculate the total direct labor variance.

Correct AnswerverifiedA

Normally,standard costs should be revised when labor rates change to incorporate new union contracts.

Correct AnswerverifiedShow Answer

Standards are designed to evaluate price and quantity variances separately.

Correct AnswerverifiedShow Answer

The amount of the fixed factory overhead volume variance is

Correct AnswerverifiedShow Answer

Which of the following would not lend itself to applying direct labor variances?

Correct AnswerverifiedShow Answer

The variance from standard for factory overhead cost resulting from operating at a level above or below 100% of normal capacity is termed volume variance.

Correct AnswerverifiedShow Answer

Which of the following is not a reason for a direct materials quantity variance?

Correct AnswerverifiedShow Answer

Standards are more widely used for nonmanufacturing activities than for manufacturing activities.

Correct AnswerverifiedShow Answer

The following data relate to direct labor costs for the current period: ​ What is the direct labor time variance?

Correct AnswerverifiedShow Answer

The difference between the standard cost of a product and its actual cost is called a variance.

Correct AnswerverifiedShow Answer

An unfavorable fixed factory overhead volume variance may be due to a failure of supervisors to maintain an even flow of work.

Correct AnswerverifiedShow Answer

Standards that represent levels of operation that can be attained with reasonable effort are called

Correct AnswerverifiedShow Answer

Assuming that the standard fixed overhead rate is based on full capacity,the cost of available but unused productive capacity is indicated by the

Correct AnswerverifiedShow Answer

If the wage rate paid per hour differs from the standard wage rate per hour for direct labor,the variance is a

Correct AnswerverifiedShow Answer

The amount of the variable factory overhead controllable variance is

Correct AnswerverifiedD

If the actual quantity of direct materials used in producing a commodity differs from the standard quantity,the variance is a

Correct AnswerverifiedC

The formula to compute the direct material quantity variance is to calculate the difference between

Correct AnswerverifiedShow Answer

A company records its inventory purchases at standard cost but also records purchase price variances.The company purchased 5,000 widgets at $8.00 each,and the standard cost for the widgets is $7.60.Which of the following would be included in the journal entry?

Correct AnswerverifiedShow Answer

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A

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The following data relate to direct labor costs for the current period: What is the direct labor time variance?

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D

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