Question 1

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 2

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 3

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. Overhead costs are also included as part of the standard cost card to provide a complete picture of the cost of producing a product.

Question 4

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 5

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 6

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, the standard cost is used to estimate the cost of each individual job, while in process costing, the standard cost is used to estimate the cost of each unit produced in a continuous manufacturing process. Therefore, option C is the correct answer.

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

The answer of In a standard cost system, Work in...

Question 8

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 9

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

Accepted Answer

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

Question 10

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...

Question 11

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 12

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 13

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 be the result of cost savings or efficiency improvements, but they can also indicate problems such as poor quality materials or excessively tight production standards. Therefore, it is important for managers to investigate all variances, whether they are favorable or unfavorable. Choices B and C are incorrect because while managers will investigate variances, the production supervisor is generally responsible for material usage variances, not price variances. Choice D is incorrect because standard costs can be a useful tool for planning purposes, even though they may not always reflect actual costs in the future.

Question 14

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 15

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...

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...

Question 17

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

Accepted Answer

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

Question 18

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...

Question 19

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...

Question 20

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

Accepted Answer

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

Quiz 7: Standard Costing and Variance Analysis