Question 1

A standard cost income statement shows cost of goods sold at standard and then actual cost.

Accepted Answer

A standard cost income statement shows cost of goods sold at standard, which is the expected cost based on specific factors and variables, and then compares it to the actual cost incurred during the accounting period. This comparison helps a company identify any variances or deviations from standard, and helps in analyzing and improving operations.

Question 2

Costanza Manufacturing gathered the following information for the year ended December 31:
  
Prepare a standard cost income statement for Costanza for the year ended December 31.

Accepted Answer

The answer of Costanza Manufacturing gathered the following information for...

Question 3

A(n)________ "arises because the number of units actually sold differs from the static budget units."

Accepted Answer

The definition given matches the concept of sales volume variance, which is the difference between the budgeted revenue and the actual revenue resulting from the difference in units sold. A flexible budget, overhead flexible budget variance, and benchmarking are different concepts not related to this scenario.

Question 4

A credit balance means that a variance is unfavorable since it decreases income (just like a revenue).

Accepted Answer

A credit balance actually means that there is a surplus or excess amount available, which is favorable. It does not decrease income or revenue.

Question 5

Raw materials inventory is credited for which of the following when recording the use of direct materials in the production process?

Accepted Answer

The answer of Raw materials inventory is credited for which...

Question 6

Which term below is best paired with "a summarized budget that can easily be computed for several volume levels"?

Accepted Answer

A flexible budget is designed to adjust for changes in volume levels and is therefore easily computed for different levels of activity. The other options (B, C, and D) do not necessarily relate to the idea of easily calculating a budget for different volume levels.

Question 7

Which term below is best paired with "The difference between the actual overhead cost incurred and the flexible budget amount of overhead cost for actual number of output"?

Accepted Answer

The overhead flexible budget variance specifically refers to the difference between the actual overhead cost incurred and the flexible budget amount for actual output. Sales volume variance measures the difference between the budgeted sales revenue and the actual sales revenue. Flexible budget is just a budget type that adjusts to changes in volume or other factors. Benchmarking is the process of comparing a company's performance to industry standards or competitors.

Question 8

The ________ department may be responsible to incur a "direct labor rate variance."

Accepted Answer

The personnel or human resources department is typically responsible for managing employee wages and benefits, and therefore may be responsible for monitoring and analyzing the direct labor rate variance, which is a measure of the difference between the actual labor costs and the budgeted or standard labor costs for a particular production process. The finance department may also be involved in analyzing this variance, but it is not necessarily their primary responsibility. The marketing and purchasing departments are less likely to be directly involved in labor cost management.

Question 9

Standard Products Company recognizes variances from standards at the earliest opportunity,and the quantity of direct materials purchased is equal to the quantity used.The following information is available for the most recent month.Assume the allocation base for fixed overhead costs is the number of units.  
Journalize the purchase and usage of direct materials including the related variances.

Accepted Answer

The answer of Standard Products Company recognizes variances from standards...

Question 10

The ________ department may be responsible to incur a "direct labor efficiency variance."

Accepted Answer

The production department is responsible for direct labor costs as they are responsible for manufacturing and producing goods. The direct labor efficiency variance is a measure of how efficiently the production department used its labor hours. Therefore, the correct answer is B.

Question 11

Cost of goods sold is shown at which of the following on a standard cost income statement?

Accepted Answer

Cost of goods sold on a standard cost income statement is shown at both standard cost and actual cost. This allows for the analysis of variances between the expected costs (standard) and the actual costs incurred.

Question 12

Work in process inventory is debited for which of the following when recording the use of direct materials in the production process?

Accepted Answer

When recording the use of direct materials in the production process, the work in process inventory is debited for the standard quantity of direct materials used (AQU) for actual production output times standard cost per pound. This is because the standard cost per pound represents the expected cost of the materials, which is what the company should have used in the production process, and therefore should be recorded as the cost of the inventory.

Question 13

When a company uses direct materials,the amount of the debit to Work in Process Inventory is based on the standard quantity of the materials that should have been used times the Standard price (SP)per unit of the materials.

Accepted Answer

This statement is true. The debit to Work in Process Inventory for direct materials is based on the standard quantity of materials that should have been used (called the standard quantity allowed) multiplied by the standard price per unit of the materials. This calculation helps to determine if the actual usage and cost of materials is in line with the expected or standard usage and cost.

Question 14

The ________ department is most likely responsible to incur a "direct material price variance."

Accepted Answer

The purchasing department is responsible for acquiring the direct materials needed for production, so they would be the most likely department to incur a direct material price variance.

Question 15

Just as in job costing,the manufacturing costs flow through the inventory accounts in the following order: raw materials → work in process → cost of goods sold → finished goods.

Accepted Answer

The correct order is raw materials → work in process → finished goods → cost of goods sold.

Question 16

Which of the following shows the effect on work in process inventory when assigning direct labor costs to the production process?

Accepted Answer

When assigning direct labor costs to the production process, the work in process inventory is debited for the standard quantity of direct labor used for actual production multiplied by the standard cost per hour. This is because the amount of work in process inventory increases with the amount of direct labor used in the production process, and the standard cost per hour is used to ensure consistency and accuracy in accounting for direct labor costs.

Question 17

The ________ department may be responsible to incur a "sales volume variance."

Accepted Answer

A sales volume variance would refer to the difference between the planned amount of sales and the actual amount of sales. This would be influenced by factors such as pricing, promotion, and overall marketing efforts, making the marketing department most responsible for incurring this type of variance. The production department would be focused on producing the products, while the purchasing department would handle procurement of materials and supplies. The personnel department would deal with issues related to the workforce.

Question 18

Standard Products Company recognizes variances from standards at the earliest opportunity,and the quantity of direct materials purchased is equal to the quantity used.The following information is available for the most recent month.Assume the allocation base for fixed overhead costs is the number of units.  
Journalize the direct labor costs incurred and the assignment of direct labor to Work in Process Inventory,including the related variances.

Accepted Answer

The answer of Standard Products Company recognizes variances from standards...

Question 19

Regarding a standard cost income statement,which of the following is true?

Accepted Answer

Variances are shown separately on a standard cost income statement to highlight the differences between actual costs and standard costs. Operating income may be shown at actual or standard cost, and both cost of goods sold and sales revenue are typically shown at actual values.

Question 20

The entry to allocate manufacturing overhead costs to production involves which of the following?

Accepted Answer

The entry to allocate manufacturing overhead costs to production involves a debit to work in process inventory for the standard rate of overhead times the standard quantity of the allocation base allowed for actual output. This entry reflects the predetermined overhead rate used to allocate costs to production based on estimated costs and usage of the allocation base.

Quiz 11: Standard Costs and Variances

A standard cost income statement shows cost of goods sold at standard and then actual cost.

Costanza Manufacturing gathered the following information for the year ended December 31: Prepare a standard cost income statement for Costanza for the year ended December 31.

A(n) ________ "arises because the number of units actually sold differs from the static budget units."

A credit balance means that a variance is unfavorable since it decreases income (just like a revenue).

Raw materials inventory is credited for which of the following when recording the use of direct materials in the production process?

Which term below is best paired with "a summarized budget that can easily be computed for several volume levels"?

Which term below is best paired with "The difference between the actual overhead cost incurred and the flexible budget amount of overhead cost for actual number of output"?

The ________ department may be responsible to incur a "direct labor rate variance."

The ________ department may be responsible to incur a "direct labor efficiency variance."

Cost of goods sold is shown at which of the following on a standard cost income statement?

Work in process inventory is debited for which of the following when recording the use of direct materials in the production process?

When a company uses direct materials,the amount of the debit to Work in Process Inventory is based on the standard quantity of the materials that should have been used times the Standard price (SP)per unit of the materials.

The ________ department is most likely responsible to incur a "direct material price variance."

Just as in job costing,the manufacturing costs flow through the inventory accounts in the following order: raw materials → work in process → cost of goods sold → finished goods.

Which of the following shows the effect on work in process inventory when assigning direct labor costs to the production process?

The ________ department may be responsible to incur a "sales volume variance."

Regarding a standard cost income statement,which of the following is true?

The entry to allocate manufacturing overhead costs to production involves which of the following?