Standard Costs and Variance Analysis MCQs

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The purpose of identifying manufacturing variances and assigning their responsibility to a person/department should be to






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A difference between standard costs used for cost control and the budgeted costs of the same manufacturing effort can exist because






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In a responsibility accounting system, a feedback report that focuses on the difference between budgeted amounts and actual amounts is an example of ...






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Which of the following factors should not be considered when deciding whether to investigate a variance?






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Which of the following management practices involves concentrating on areas that deserve attention and placing less attention on areas operating as ex...






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Use of a standard cost system can include all of the following advantages except that it






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Use of a standard cost system can include all of the following advantages except that it






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The controller of a company holds a monthly meeting where any department that has a 10% unfavorable variance to budget must explain the variance and d...






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The benefits of management by exception reporting include all of the following except a reduction in






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Within a performance monitoring system, which of the following is the least valid reason for calculating variances between actual performance and budg...






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Jay Company uses a standard cost system. During the past year, the variances from standard were significant. Jay is considering whether to allocate t...






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Which one of the following is the least likely reason that variances are computed within a performance monitoring system?






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Which one of the following statements about management by exception is least likely to be correct?






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A standard cost system is often used in variance analysis because standard costs






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Simson Company’s master budget shows straight-line depreciation on factory equipment of $258,000. The master budget was prepared at an annual produc...






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Barnes Corporation expected to sell 150,000 board games during the month of November, and the company’s master budget contained the following data r...






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A static budget






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When preparing a performance report for a cost center using flexible budgeting techniques, the planned cost column should be based on the






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Selo Imports uses flexible budgeting for the control of costs. The companys annual master budget includes $324,000 for fixed production supervisory s...






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Red Rock Company uses flexible budgeting for cost control. Red Rock produced 10,800 units of product during October, incurring indirect materials cost...






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Flexible budgets






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The difference between the actual amounts and the flexible budget amounts for the actual output achieved is the






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A manufacturing firm planned to manufacture and sell 100,000 units of product during the year at a variable cost per unit of $4.00 and a fixed cost pe...






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An advantage of using a flexible budget compared to a static budget is that, in a flexible budget,






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A major disadvantage of a static budget is that






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Arkin Co.s controller has prepared a flexible budget for the year just ended, adjusting the original static budget for the unexpected large increase ...






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Which one of the following statements is correct concerning a flexible budget cost formula? Variable costs are stated






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The monthly sales volume of Shugart Corporation varies from 7,000 units to 9,800 units over the course of a year. Management is currently studying ant...






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Teeny Toddlers is a 4- toys. To maintain competitive prices, control of costs is critical. Management has considered moving production overseas, but s...






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Which one of the following will allow a better use of standard costs and variance analysis to help improve managerial decision-making?






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A plan that is created using budgeted revenue and costs but is based on the actual units of output is known as a






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A method of budgeting in which the cost of each program must be justified, starting with the one most vital to the company, is






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Comparing actual results with a budget based on achieved volume is possible with the use of a






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The use of standard costs in the budgeting process signifies that an organization has most likely implemented a






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A manufacturing firm has certain peak seasons; namely the Christmas season, the summer season, and the last 2 weeks of February. During these periods ...






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Country Ovens is a family restaurant chain. Due to an unexpected road construction project, traffic passing by the Country Ovens restaurant in New to...






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An organizations revenues and variable costs vary significantly with seasonal weather conditions. This variability has frustrated managements attemp...






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Gooding bicycles has begun using budgeting to evaluate performance. Budgets were prepared for the current year based on anticipated sales of 40,000 un...






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






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Blaster, Inc., a manufacturer of portable radios, purchases the components from subcontractors to use to assemble into a complete radio. Each radio re...






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Blaster, Inc., a manufacturer of portable radios, purchases the components from subcontractors to use to assemble into a complete radio. Each radio re...






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Garland Company uses a standard cost system. The standard for each finished unit of product allows for 3 pounds of plastic at $0.72 per pound. During ...






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ChemKing uses a standard costing system in the manufacture of its single product. The 35,000 Fact Pattern:units of direct materials in inventory were ...






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ChemKing uses a standard costing system in the manufacture of its single product. The 35,000 Fact Pattern:units of direct materials in inventory were ...






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A favorable materials price variance coupled with an unfavorable materials usage variance most likely results from






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Tower Company planned to produce 3,000 units of its single product, Titactium, during November. The standard specifications for one unit of Titactium ...






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David Rogers, purchasing manager at Fairway Manufacturing Corporation, was able to acquire a large quantity of direct materials from a new supplier at...






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Price variances and efficiency variances can be key to the performance measurement within a company. In evaluating the performance within a company, a...






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Todco planned to produce 5,000 units of its single product, Teragram, during November. The standard specifications for one unit of Teragram include te...






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Which one of the following variances is most controllable by the production control supervisor?






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






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






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When items are transferred from stores to production, an accountant debits work-in-process and credits materials accounts. During production, a materi...






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






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Which department is typically responsible for a materials price variance?






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Fleece Company uses a standard-costing system in relation to its manufacture of scarves. Each finished scarf contains 1.5 yards of direct materials. H...






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A manufacturer of radios purchases components from subcontractors for assembly into complete radios. Each radio requires three units each of Part X, w...






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A manufacturer of radios purchases components from subcontractors for assembly into complete radios. Each radio requires three units each of Part X, w...






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A company has a raw material price variance that is unfavorable. An analysis of this variance indicates that the companys only available supplier of ...






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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 ...






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A company isolates its raw material price variance in order to provide the earliest possible information to the manager responsible for the variance. ...






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Richter Company has an unfavorable materials efficiency (usage) variance for a particular month. Which one of the following is least likely to be the ...






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During the month of May, Tyler Company experienced a significant unfavorable material efficiency variance in the production of its single product at o...






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TwoCo established a standard direct material cost of $20 per finished unit for its main product. The standard is calculated using direct materials of ...






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Bettis Company began business on January 1 of the current year. The firms standard cost system allows for 4 yards of fabric at $1.55 per yard for eac...






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The inventory control supervisor at Wilson Manufacturing Corporation reported that a large quantity of a part purchased for a special order that was n...






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Under a standard cost system, direct labor price variances are usually not attributable to






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The static budget for the month of May was for 9,000 units with direct materials at $15 per unit. Direct labor was budgeted at 45 minutes per unit fo...






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An unfavorable direct labor efficiency variance could be caused by a(n)






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Tub Co. uses a standard cost system. The following information pertains to direct labor for product B for the month of October: Standard hours allowed...






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"A company manufactures one product and has a standard cost system. In April the company had the following experience:" ...






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"A company manufactures one product and has a standard cost system. In April the company had the following experience:" ...






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"A company manufactures one product and has a standard cost system. In April the company had the following experience:" ...






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One of the items produced by a manufacturer of lawn and garden tools is a chain saw. The direct labor standard for assembling and testing a chain saw...






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One of the items produced by a manufacturer of lawn and garden tools is a chain saw. The direct labor standard for assembling and testing a chain saw...






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A manager prepared the following table by which to analyze labor costs for the month:Actual Hours at Actual Rate $10,000Actual Hours at Standard Rate ...






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The total budgeted direct labor cost of a company for the month was set at $75,000 when 5,000 units were planned to be produced. The following standar...






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Normal Company produced 600 units of one of its products last year. The standard for labor hours allowed was 2 hours per unit at a standard rate of $...






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Bell Co. manufactures a single product with a standard direct labor cost of 2 hours at $10.00 per hour. During November, 1,500 units were produced re...






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In which of the following variances is the standard unit cost used in the calculations?






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Pane Companys direct labor costs for April are as follows: Standard direct labor hours 42,000 Actual direct labor hours 41,200 Total direct labor ...






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Lakes direct labor costs for the month of May are as follows: Standard direct labor hours allowed 12,500 Actual direct labor rate $8.25 Actual dir...






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Bolt Co. uses a standard-cost system. Bolts direct labor information for July is as follows: Standard hours allowed for actual production 3,000 Act...






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Daniel Corporations direct labor costs for June were as follows: Actual direct labor hours 32,000 Standard direct labor hours 33,600 Direct labor rat...






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A company has a direct labor price variance that is favorable. Of the following, the most serious concern the company may have about this variance is ...






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MinnOil performs oil changes and other minor maintenance services (e.g., tire pressure checks) for cars. The company advertises that all services are...






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Lee Manufacturing uses a standard cost system with overhead applied based on direct labor hours. The manufacturing budget for the production of 5,000...






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Randall Company uses standard costing and flexible budgeting and is evaluating its direct labor. The flexible budget variance can usually be broken do...






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A company had a total labor variance of $15,000 favorable and a labor efficiency variance of $18,000 unfavorable. The labor price variance was






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The accounting records of Foster Corporation reveal a favorable labor efficiency variance for the period just ended. Which of the following comments b...






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Sleep-Fine Company is a mattress manufacturer. The company has a standard direct labor rate of $25 per hour, 75 direct labor employees, and 50 indirec...






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Baxter Corporations master budget calls for the production of 5,000 units of product monthly. The master budget includes indirect labor of $144,000 a...






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The efficiency variance for either direct labor or materials can be divided into






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A materials or labor yield variance equals






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The labor mix and labor yield variances together equal the






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1452Conroy, Inc., manufactures a product by mixing two materials as shown by the following standards for one unit of finished goods. 1. Material A: ...






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If overhead is applied on the basis of units of output, the variable overhead efficiency variance will be






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Variable overhead is applied on the basis of standard direct labor hours. If, for a given period, the direct labor efficiency variance is unfavorable...






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Variable overhead is applied on the basis of standard direct labor hours. If, for a given period, the direct labor efficiency variance is unfavorable...






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Baltimore Products has an estimated practical capacity of 90,000 machine hours, and each unit requires two machine hours. The following data apply to...