Standard Costs and Variance Analysis Paper 6

1

In a standard cost system, the investigation of an unfavorable materials usage variance should begin with the






2

Under a standard cost system, the materials price variances are usually the responsibility of the






3

When items are transferred from stores to production, an accountant debits work-in-process and credits materials accounts. During production, a materials quantity variance may occur. The materials quantity variance is debited for an unfavorable variance and credited for a favorable variance. The intent of variance entries is to provide






4

Which of the following is least likely to cause an unfavorable materials quantity (usage) variance?






5

Which department is typically responsible for a materials price variance?






6

Fleece Company uses a standard-costing system in relation to its manufacture of scarves. Each finished scarf contains 1.5 yards of direct materials. However, a 25% direct materials spoilage, which is calculated based on input quantities, occurs during the manufacturing process. The cost of the direct materials is $2.00 per yard. The standard direct materials cost per unit of finished product is






7

A manufacturer of radios purchases components from subcontractors for assembly into complete radios. Each radio requires three units each of Part X, which has a standard cost of $2.90 per unit. During June, the company had the following experience with respect to Part X:
Purchases ($36,000) 12,000 Units
Consumed in manufacturing 10,000 Units
Radios manufactured 3,000 Units
During June, the company incurred a materials efficiency variance of






8

A manufacturer of radios purchases components from subcontractors for assembly into complete radios. Each radio requires three units each of Part X, which has a standard cost of $2.90 per unit. During June, the company had the following experience with respect to Part X:
Purchases ($36,000) 12,000 Units
Consumed in manufacturing 10,000 Units
Radios manufactured 3,000 Units
The amount that will be shown on a static budget for Part X usage during the month of June is






9

A company has a raw material price variance that is unfavorable. An analysis of this variance indicates that the company’s only available supplier of one of its raw materials unexpectedly raised the price of the material. The action management should take regarding this situation should be to






10

Frisco Company recently purchased 108,000 units of raw material for $583,200. Three units of raw materials are budgeted for use in each finished good manufactured, with the raw material standard set at $16.50 for each completed product. Frisco manufactured 32,700 finished units during the period just ended and used 99,200 units of raw material. If management is concerned about the timely reporting of variances in an effort to improve cost control and bottom-line performance, the materials purchase price variance should be reported as






Result

Total Questions:
Correct Answers:
Wrong Answers:
Percentage: