ACCT CH 9

A standard cost: -is the "true" cost of a unit of production. correct -is a budget for the production of one unit of a -product or service. -can be useful in calculating equivalent units. -is normally the average cost within an industry. -is almost always the actual cost from previous years.

Variances are computed by taking the difference between which of the following? -Product cost and period cost. -Actual cost and differential cost. -Price factors and rate factors. -Actual cost and standard cost. -Product cost and standard cost

Most companies base the calculation of the direct-material price variance on the: -number of units purchased. -number of units spoiled. -number of units that should have been used. -number of units actually used. -number of units to be purchased during the next accounting period

Which of the following correctly lists all the information needed to calculate a labour rate variance? -Standard labour rate and actual hours worked. -Actual hours worked and actual units produced. -Standard labour rate, actual labour rate, and actual units produced. -Actual labour rate and actual hours worked. -Actual labour rate, standard labour rate, and actual hours worked

Which of the following variances are most similar with respect to the manner in which they are calculated? -Direct-labour rate variance and direct-labour efficiency variance. -Direct-material price variance and direct-material quantity variance. -Direct-material price variance, direct-material quantity variance, and total direct-material variance. -Direct-material price variance and direct-labour efficiency variance. -Direct-material quantity variance and direct-labour efficiency variance

Simms Limited had a favourable direct-labour efficiency variance of $8,000 for the period just ended. The actual wage rate was $0.70 more than the standard rate of $10.00. If the company's standard hours allowed for actual production totalled 10,000, how many hours did the firm actually work? 800. 8,000. 9,200. 10,000. 18,000

Bowing International purchased 66,000 metres (cost = $514,800) of direct material to be used in the manufacture of the company's sole product. According to the production specifications, each completed unit requires five metres of direct material at a standard cost of $8.00 per metre. Direct materials consumed by the end of the period totalled 63,500 metres in the manufacture of 12,933 finished units. An examination of Bowing's payroll records revealed that the company worked 23,000 labour hours (cost = $333,500) during the period, and specifications called for each completed unit requiring two hours of labour at a standard cost of $14.60 per hour. Bowing's direct-material price variance is: -$12,700F. -$12,700U. -$13,200F. -$13,200U. -$12,933F.

Bowing International purchased 66,000 metres (cost = $514,800) of direct material to be used in the manufacture of the company's sole product. According to the production specifications, each completed unit requires five metres of direct material at a standard cost of $8.00 per metre. Direct materials consumed by the end of the period totalled 63,500 metres in the manufacture of 12,933 finished units. An examination of Bowing's payroll records revealed that the company worked 23,000 labour hours (cost = $333,500) during the period, and specifications called for each completed unit requiring two hours of labour at a standard cost of $14.60 per hour. Bowing's direct-labour efficiency variance is: -$2,300F. -$2,300U. -$12,700F. -$41,844F. -$41,844U.

What is the primary difference between a static budget and a flexible budget? -The static budget contains only fixed costs, while the flexible budget contains only variable costs. -The static budget is prepared for a single level of activity, while a flexible budget is adjusted for different activity levels. -The flexible budget is prepared for a single level of activity, while a static budget is adjusted for different activity levels. -The static budget is constructed using input from only upper level management, while a flexible budget obtains input from all levels of management. -The flexible budget is constructed using input from only upper level management, while a static budget obtains input from all levels of management.

The gears department of Cycle Company has budgeted monthly manufacturing overhead cost of $40,000 plus $5 per direct labour hour. The flexible budget report reflects $120,000 for total budgeted manufacturing cost for the month. What is the actual level of activity achieved during the month? 16,000 direct labour hours. 22,400 direct labour hours. 24,000 direct labour hours. 32,000 direct labour hours. 120,000 direct labour hours.

Which of the following mathematical expressions is found in a typical flexible-budget formula for overhead? -Total activity units + budgeted fixed overhead cost per unit. -Total activity units + actual fixed overhead cost per unit. -Budgeted variable overhead cost per unit + budgeted fixed overhead cost. -(Budgeted variable overhead cost per unit x total activity units) + budgeted fixed overhead costs. -(Budgeted fixed overhead cost per unit x total activity units) + (budgeted variable overhead cost per unit x total activity units).

The activity measure selected for use in a variable overhead flexible budget and a fixed overhead flexible budget: -should be stated in sales dollars. -should be approved by the company's president. -should be one that varies in a similar behaviour pattern to the way that variable overhead varies. -should remain fixed. -should produce the most attractive results for the individual who will use the budget in managerial applications.

Smithville uses labour hours to apply variable overhead to production. If the company's workers were very inefficient during the period, which of the following statements would be true about the variable-overhead efficiency variance? -The variance would be favourable. -The variance would be unfavourable. -The nature of the variance (favourable or unfavourable) would be unknown based on the facts presented. -The variance would be the same amount as the labour efficiency variance. -The variance would be the same amount as the fixed overhead volume variance

Which department would normally begin an investigation regarding an unfavourable materials quantity variance? Quality control. Purchasing. Human resource. Production. Receiving.