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Lesson 3 Standard Cost Accounting_EXAMINATION NUMBER: 06164900




Question;Lesson;3 Standard Cost Accounting;EXAMINATION;NUMBER: 06164900;Questions 1-20: Select the one best answer to each;question.;1. A company uses a two-variance analysis for overhead;variances?controllable variances and volume;variances.;The volume variance is based on the;A. total;overhead application rate.;B. total;expenses at various activity levels.;C. variable;overhead application rate.;D. fixed;overhead application rate.;2. When using a flexible budget, what will occur to fixed;costs (on a per unit basis) as production increases?;A. Fixed costs;aren't considered in flexible budgeting.;B. Fixed costs;per unit will decrease.;C. Fixed costs;per unit will remain unchanged.;D. Fixed costs per unit will increase.;3. The Johns Company budgeted overhead at $117,500 for;the period for Department A based on a budgeted volume of 50,000 direct labor;hours. At the end of the period, the factory overhead control account for;Department A had a balance of $124,000. The actual (and allowed) direct labor;hours were 52,000. What was the overapplied (underapplied) overhead for the;period?;A.;$(1,800);C. $1,800;B.;$(6,500);D. $6,500;4. Which of the following terms bestdescribes a;characteristic of a system of standard costs?;A. Marginal;costing;C. Management by exception;B. Contribution;approach;D. Standardized accounting;5. What standard cost variance represents the difference;between actual factory overhead incurred and budgeted factory overhead based on;actual hours worked?;A. Volume;variance;C. Efficiency variance;B. Spending;(budget) variance D. Quantity variance;6. When standard costs are used in a process cost;accounting system, how are equivalent units involved or used in the cost report;at standard?;A. Equivalent;units aren't used.;B. Equivalent;units are computed using a special approach.;C. The;standard equivalent units are multiplied by the actual cost per unit.;D. The actual;equivalent units are multiplied by the standard cost per unit.;7. Information on Armor Company's overhead costs is as;follows;Actual variable overhead;$95,000;Actual fixed overhead;$28,000;Standard hours allowed for actual production 30,000;Standard variable overhead rate per direct labor;hour $3.25;Standard fixed overhead rate per direct labor;hour $0.75;What is Armor Company's total overhead variance?;A. $2,500;favorable;C. $3,000 favorable;B. $2,500;unfavorable;D. $3,000 unfavorable;8. The direct labor costs for Boundary Company are as;follows;Standard direct labor hours 35,000;Actual direct labor hours;33,500;Direct labor efficiency variance?favorable $12,000;Direct labor rate variance?favorable $3,075;Total payroll;$252,925;What is the company's standard direct labor rate?;A. $2.63;C.;$8.00;B. $3.87;D. $10.50;9. A flexible budget is appropriate for a;Marketing Budget Service Industry;A. No;No;B. No;Yes;C. Yes No;D. Yes;Yes;10. How should an efficiency variance that is material;in amountbe treated at the end of an accounting period?;A. Reported as;a deferred charge or credit;B. Allocated;among work in process inventory, finished goods inventory, and cost of goods;sold;C. Charged or;credited to cost of goods manufactured;D. Allocated;among cost of goods manufactured, finished goods inventory, and cost of goods;sold;11. Winny Co. is budgeting sales of 53,000 units of;product Tara for October. The manufacture of one unit of Tara requires 4 pounds;of chemical Daisy. During October, Winny plans to reduce the inventory of Daisy;by 50,000 pounds and increase the finished goods inventory of Tara by 6,000;units. There's no Tara work-in-process inventory. How many pounds of Daisy is;Winny budgeting to purchase in October?;A. 138,000;C. 186,000;B. 162,000;D. 238,000;12. Earl Company's direct labor costs for the month of;January are as follows;Actual direct labor hours;18,000;Standard direct labor hours 19,000;Direct labor rate variance?unfavorable $2,160;Total payroll;$117,000;What was Earl's direct labor efficiency variance?;A. $1,200;favorable;C. $6,380 favorable;B. $1,800;favorable;D. $6,400 favorable;13. The data below relate to the month of April for;Monroe, Inc., which uses a standard cost system;Actual total direct labor $54,200;Actual hours used;16,500;Standard hours allowed for good output 16,250;Direct labor rate variance?debit;$1,400;Actual total overhead;$53,100;Budgeted fixed overhead $12,000;Normal" activity in hours;16,000;Total overhead application rate per standard direct;labor hour $3.25;What was Monroe's volume variance for April?;A. $187.50;favorable;C. $437.50 favorable;B. $187.50;unfavorable;D. $437.50 unfavorable;14. The standard direct material to produce one unit of;Product A is four yards of material at $2.50 per yard. During June, 4,200 yards;of material costing $10,080 are purchased and used to produce 1,000 units of;Product A. What was the material price variance for June?;A. $400;favorable;C. $80 unfavorable;B. $420;favorable;D. $480 unfavorable;15. Which one of the following standard cost variances;would be leastcontrollable by a production supervisor?;A. Overhead;volume;C. Labor efficiency;B. Overhead controllable;D. Material usage;16. The materials price variance, in a standard cost;system, is obtained by multiplying the;A. actual;price by the difference between actual quantity purchased and standard quantity;used.;B. actual;quantity by the difference between actual price and the standard price.;C. standard;price by the difference between standard quantity purchased and standard;quantity used.;D. standard;quantity by the difference between actual price and standard price.;17. Flexible budgeting is a reporting system in which the;A. statements;included in the budget report vary from period to period.;B. budget;standards may be adjusted at will.;C. reporting;dates vary according to the levels of activity reported upon.;D. planned;level of activity is adjusted to the actual level of activity before the budget;comparison report is prepared.;18. If a;company uses a predetermined rate for absorbing manufacturing overhead, the;volume variance is the;A.;underapplied or overapplied variable cost element of overhead.;B.;underapplied or overapplied fixed cost element of overhead.;C. difference;in budgeted costs and actual costs of fixed overhead items.;D. difference;in budgeted costs and actual costs of variable overhead items.;18. Elgin Company's budgeted fixed factory overhead costs;are $50,000 per month, plus a variable factory overhead rate of $4.00 per;direct labor hour. The standard direct labor hours allowed for October;production were 20,000. An analysis of the factory overhead indicates that in;October Elgin had an unfavorable budget (controllable) variance of $1,500 and a;favorable volume variance of $500. Elgin uses a two-variance analysis of;overhead variances.;What is Elgin's applied factory overhead for October?;A. $128,000;C. $130,000;B. $129,500;D. $130,500;19. Why might it be misleading to view an unfavorable;variance on a performance report as indicative of inferior performance?;A. Actual;results are beyond the control of the manager being evaluated.;B. The;unfavorable variance may be the result of the company's having used attainable;standards rather than ideal standards.;C. The;standard may need to be updated.;D. Variance analysis is for purposes of income;determination, not performance evaluation.


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