Question 1

The variable factory overhead controllable variance is

Accepted Answer

A)   $9,000 favorable
B)   $9,000 unfavorable
C)   $5,500 favorable
D)   $5,500 unfavorableE) B) and C)
F) None of the above

Question 2

Standard costs serve as a device for measuring efficiency.

Accepted Answer

A) True 
 B)False

Question 3

The following data relate to direct labor costs for August: Actual costs: 5,500 hours at $24.00 per hour.
Standard costs: 5,000 hours at $23.70 per hour.
​
What is the direct labor rate variance?
​

Accepted Answer

A)   ​$1,650 favorable
B)   ​$1,650 unfavorable
C)   ​$1,500 favorable
D)   ​$1,500 unfavorableE) A) and B)
F) A) and C)

Question 4

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

Question 5

Standard costs should always be revised when they differ from actual costs.

Accepted Answer

A) True 
 B)False

Question 6

Standard costs are a useful management tool that can be used solely as a statistical device apart from the ledger or they can be incorporated in the accounts.

Accepted Answer

A) True 
 B)False

Question 7

Calculate the direct materials quantity variance.

Accepted Answer

A)   $4,512.50 unfavorable
B)   $4,512.50 favorable
C)   $4,750.00 unfavorable
D)   $4,750.00 favorableE) C) and D)
F) B) and D)

Question 8

The variance from standard for factory overhead resulting from incurring a total amount of factory overhead cost that is greater or less than the amount budgeted for the level of operations achieved is termed controllable variance.

Accepted Answer

A) True 
 B)False

Question 9

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual was 800 units at $12,the direct materials price variance was $800 unfavorable.

Accepted Answer

A) True 
 B)False

Question 10

What is the direct labor time variance?

Accepted Answer

A)   $7,700 favorable
B)   $7,700 unfavorable
C)   $11,200 unfavorable
D)   $11,200 favorableE) All of the above
F) C) and D)

Question 11

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 12

The standard costs and actual costs for direct labor in the manufacture of 2,500 units of product are as follows: ​
 The direct labor time variance is

Accepted Answer

A)   $1,180 favorable
B)   $1,140 unfavorable
C)   $1,180 unfavorable
D)   $1,140 favorableE) None of the above
F) A) and C)

Question 13

A variable cost system is an accounting system where standards are set for each manufacturing cost element.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A)   $36,000 unfavorable
B)   $35,000 unfavorable
C)   $23,000 favorable
D)   $22,000 favorableE) A) and C)
F) A) and B)

Question 15

Since the controllable variance measures the efficiency of using variable overhead resources,if budgeted variable overhead exceeds actual results,the variance is favorable.

Accepted Answer

A) True 
 B)False

Question 16

The standard cost is how much a product should cost to manufacture.

Accepted Answer

A) True 
 B)False

Question 17

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) B) and C)
F) A) and B)

Question 18

The materials quantity variance is

Accepted Answer

A)   63,000 favorable
B)   63,000 unfavorable
C)   59,400 favorable
D)   59,400 unfavorableE) B) and C)
F) A) and D)

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

A favorable cost variance occurs when actual cost is less than budgeted cost at actual volumes.

Accepted Answer

A) True 
 B)False

Exam 22: Evaluating Variances From Standard Costs

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

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Standard costs are a useful management tool that can be used solely as a statistical device apart from the ledger or they can be incorporated in the accounts.

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A variable cost system is an accounting system where standards are set for each manufacturing cost element.

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The controllable variance measures

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The standard costs and actual costs for direct labor in the manufacture of 2,500 units of product are as follows: ​ The direct labor time variance is

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

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The following data relate to direct labor costs for August: Actual costs: 5,500 hours at $24.00 per hour. Standard costs: 5,000 hours at $23.70 per hour. ​ What is the direct labor rate variance? ​

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Calculate the direct materials quantity variance.

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The variable factory overhead controllable variance is

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What is the direct labor time variance?

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A favorable cost variance occurs when actual cost is less than budgeted cost at actual volumes.

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The variance from standard for factory overhead resulting from incurring a total amount of factory overhead cost that is greater or less than the amount budgeted for the level of operations achieved is termed controllable variance.

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Since the controllable variance measures the efficiency of using variable overhead resources,if budgeted variable overhead exceeds actual results,the variance is favorable.

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If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual was 800 units at $12,the direct materials price variance was $800 unfavorable.

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

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Standard costs should always be revised when they differ from actual costs.

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The materials quantity variance is

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The standard cost is how much a product should cost to manufacture.

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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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Standard costs serve as a device for measuring efficiency.

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The standard costs and actual costs for direct labor in the manufacture of 2,500 units of product are as follows: The direct labor time variance is

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The following data relate to direct labor costs for August: Actual costs: 5,500 hours at $24.00 per hour. Standard costs: 5,000 hours at $23.70 per hour. What is the direct labor rate variance?

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