Question 1

Standards that allow for waste and inefficiency are referred to as ______________________________.

Accepted Answer

The answer of Standards that allow for waste and inefficiency...

Question 2

Standards that are attainable with reasonable effort are referred to as ___________________________________.

Accepted Answer

The answer of Standards that are attainable with reasonable effort...

Question 3

Standards that reflect what is expected to occur are referred to as ______________________________.

Accepted Answer

The answer of Standards that reflect what is expected to...

Question 4

A primary purpose of using a standard cost system is
A)to make things easier for managers in the production facility.
B)to provide a distinct measure of cost control.
C)to minimize the cost per unit of production.
D)b and c are correct.

Accepted Answer

The answer of A primary purpose of using a standard...

Question 5

Which of the following statements regarding standard cost systems is true?
A)Favorable variances are not necessarily good variances.
B)Managers will investigate all variances from standard.
C)The production supervisor is generally responsible for material price variances.
D)Standard costs cannot be used for planning purposes since costs normally change in the future.

Accepted Answer

Favorable variances may indicate that actual costs were lower than expected, but they may also be the result of cutting corners or using lower quality materials. Therefore, favorable variances are not necessarily good variances and should be investigated by management. The other options are incorrect. Managers may investigate significant variances but not necessarily all variances. The responsibility for material price variances may vary among organizations. Lastly, standard costs can be used for planning purposes, but it is important to regularly update the standards to reflect changes in the cost environment.

Question 6

The difference between budgeted variable overhead for actual hours and standard overhead is the __________________________________________________.

Accepted Answer

The answer of The difference between budgeted variable overhead for...

Question 7

In a standard cost system,Work in Process Inventory is ordinarily debited with
A)actual costs of material and labor and a predetermined overhead cost for overhead.
B)standard costs based on the level of input activity (such as direct labor hours worked).
C)standard costs based on production output.
D)actual costs of material,labor,and overhead.

Accepted Answer

In a standard cost system, Work in Process Inventory is debited with standard costs based on production output, reflecting the expected costs rather than actual costs.

Question 8

The two components of total material/labor variance are ______________________________ and ___________________________________

Accepted Answer

The answer of The two components of total material/labor variance...

Question 9

The difference between budgeted and applied fixed factory overhead is referred to as a __________________________________________________.

Accepted Answer

The answer of The difference between budgeted and applied fixed...

Question 10

When multiple labor categories are used,the monetary impact of using a higher or lower number of hours than a standard allows is referred to as a ______________________________ variance.

Accepted Answer

The answer of When multiple labor categories are used,the monetary...

Question 11

When multiple labor categories are used,the financial effect of using a different mix of workers in a production process is referred to as a _________________________ variance.

Accepted Answer

The answer of When multiple labor categories are used,the financial...

Question 12

A standard cost system may be used in
A)job order costing,but not process costing.
B)process costing,but not job order costing.
C)either job order costing or process costing.
D)neither job order costing nor process costing.

Accepted Answer

A standard cost system can be used in both job order costing and process costing. In job order costing, standard costs are established for each individual job, while in process costing, standard costs are established for each process or department within the production process. Therefore, choice C is the correct answer.

Question 13

The standard cost card contains quantities and costs for
A)direct material only.
B)direct labor only.
C)direct material and direct labor only.
D)direct material,direct labor,and overhead.

Accepted Answer

Standard cost card contains quantities and costs for Direct Material, Direct Labor, and Overhead.

Question 14

The difference between actual and budgeted fixed factory overhead is referred to as a __________________________________________________.

Accepted Answer

The answer of The difference between actual and budgeted fixed...

Question 15

The difference between standard quantity allowed and quantity used for a unit of output is known as an ______________________________.

Accepted Answer

The answer of The difference between standard quantity allowed and...

Question 16

When multiple materials are used,the effect of substituting a non-standard mix of materials during the production process is referred to as a ____________________ variance.

Accepted Answer

The answer of When multiple materials are used,the effect of...

Question 17

Standards that provide for no human limitations or operating delays are referred to as ______________________________.

Accepted Answer

The answer of Standards that provide for no human limitations...

Question 18

When multiple materials are used,the difference between the total quantity and the standard quantity of output when a nonstandard mix of materials is used is known as the _________________________ variance.

Accepted Answer

The answer of When multiple materials are used,the difference between...

Question 19

The difference between what was paid for inputs and what should have been paid for inputs is referred to as a _________________________.

Accepted Answer

The answer of The difference between what was paid for...

Question 20

The difference between actual variable overhead and budgeted variable overhead based upon actual hours is referred to as the _______________________________________________________.

Accepted Answer

The answer of The difference between actual variable overhead and...

Quiz 7: Standard Costing and Variance Analysis