1) Standard costs for company products are typically used for all
except which of the following? Question 1 options:
| Variance analysis and cost control | |
| Computing production costs in operating budgets | |
| Determining actual costs per unit | |
| Determining the cost of goods completed and transferred to finished goods inventory |
2) Performance reports normally include all of the following
except Question 2 options:
| standard costs. | |
| normal capacity. | |
| total plantwide overhead costs. | |
| budgeted costs. |
3) Which of the following provides an explanation of why the variable overhead rate is separated from the fixed overhead rate in standard costing? Question 3 options:
| There is no justifiable reason; their separation is merely to simplify entries. | |
| Both calculations divide by the same direct labor hours, but the numerator is different for each calculation. | |
| The variable overhead rate is calculated using actual direct labor hours, whereas the fixed overhead rate is calculated using normal capacity direct labor hours. | |
| Different application bases are generally appropriate. |
4) Multiplying the standard price of direct materials by the standard quantity for direct materials yields Question 4 options:
| the direct materials price variance. | |
| the direct materials quantity variance. | |
| the standard direct materials cost. | |
| nothing; the two components should be added together. |
5) An expression of the hourly labor pay cost per function or job classification that is expected to exist during the next accounting period is the definition of a Question 5 options:
| direct labor time standard. | |
| direct materials quantity standard. | |
| direct labor rate standard. | |
| variable overhead rate. |
6) A flexible budget is most useful Question 6 options:
| for budgeting and planning purposes. | |
| when actual output equals budgeted output. | |
| as a cost control tool to help evaluate performance. | |
| when a product’s cost structure includes variable costs only. |
7) In a standard costing system, standard costs eventually flow into the Question 7 options:
| Cost of Goods Sold account. | |
| Standard Cost account. | |
| Selling and Administrative Expenses account. | |
| Sales account. |
8) The difference between actual quantity used and standard quantity multiplied by standard price is the equation for computing the Question 8 options:
| direct labor efficiency variance. | |
| direct materials price variance. | |
| direct labor rate variance. | |
| direct materials quantity variance. |
9) Which of the following statements is
not true? Question 9 options:
| Performance reports should be tailored to the responsibilities of the manager or department for which they are prepared. | |
| Performance reports normally report standard costs and variances. | |
| Performance reports should contain space for explanation of variances. | |
| Performance reports do not present the causes of variances. |
10) Suppose the standard for a given cost during a period was $80,000. The actual cost for the period was $72,000. Under what circumstances would you consider the variance from budget to be a positive performance indication? Question 10 options:
| The cost is fixed, and actual production was 90 percent of the standard level of budgeted production. | |
| The cost is variable, and the standard cost noted above is the cost at a production level lower than the actual production level. | |
| The cost is variable, and actual production was 90 percent of the standard level of production. | |
| The cost is variable, and actual production was 75 percent of the standard level of production |
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