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STANDARD COSTS mcq homework

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Question;141. When;is a variance considered to be 'material'?;a. When;it is large compared to the actual cost;b. When;it is infrequent;c. When;it is unfavorable;d. When it could have been;controlled more effectively;142. Variance;reports are;a. external;financial reports.;b. SEC;financial reports.;c. internal;reports for management.;d. all;of these.;143. In using variance reports, management looks;for;a. total;assets invested.;b. significant;variances.;c. competitors?;costs in comparison to the company's costs.;d. more;efficient ways of valuing inventories.;144. Parnell Company prepared its income;statement for internal use. How would amounts for cost of goods sold and;variances appear?;a. Cost;of goods sold would be at actual costs, and variances would be reported;separately.;b. Cost;of goods sold would be combined with the variances, and the net amount reported;at standard cost.;c. Cost;of goods sold would be at standard costs, and variances would be reported;separately.;d. Cost;of goods sold would be combined with the variances, and the net amount reported;at actual cost.;145. Alex Co. prepared its income statement for;management using a standard cost accounting system. Which of the following;appears at the ?standard? amount?;a. Sales;b. Selling;expenses;c. Gross;profit;d. Cost;of goods sold;146. The costing of inventories at standard cost;for external financial statement reporting purposes is;a. not;permitted.;b. preferable;to reporting at actual costs.;c. in;accordance with generally accepted accounting principles if significant;differences exist between actual and standard costs.;d. in;accordance with generally accepted accounting principles if significant;differences do not exist between actual and standard costs.;147. Income statements prepared internally for;management often show cost of goods sold at standard cost and variances are;a. separately;disclosed.;b. deducted;as other expenses and revenues.;c. added;to cost of goods sold.;d. closed;directly to retained earnings.;148. In Zero Company?s income statement, they report gross;profit of $55,000 at standard and the following variances;Materials price $ 420 F;Materials quantity 600 F;Labor price 420 U;Labor quantity 1,000 F;Overhead 900 F;Zero;would report actual gross profit of;a. $51,660.;b. $52,500.;c. $57,500.;d. $58,340.;149. In Zero Company?s income;statement, they report actual gross profit of $52,500 and the following;variances;Materials price $ 420 F;Materials quantity 600 F;Labor price 420 U;Labor quantity 1,000 F;Overhead 900 F;Zero;would report gross profit at standard of;a. $46,660.;b. $47,500.;c. $55,000.;d. $53,340.;150. The balanced;scorecard;a. incorporates;financial and nonfinancial measures in an integrated system.;b. is;based on financial measures.;c. is;based on nonfinancial measures.;d. does;not use financial or nonfinancial measures.;151. Which is not one of;the four most commonly used perspectives on a balanced scorecard?;a. The;financial perspective;b. The;customer perspective;c. The;external process perspective;d. The;learning and growth perspective;152. The balanced scorecard;approach;a. uses;only financial measures to evaluate performance.;b. uses;rather vague, open statements when setting objectives in order to allow;managers and employees flexibility.;c. normally;sets the financial objectives first, and then sets the objectives in the other;perspectives to accomplish the financial objectives.;d. evaluates;performance using about 10 different perspectives in order to effectively incorporate;all areas of the organization.;153. The customer perspective of;the balanced scorecard approach;a. is;the most traditional view of the company.;b. evaluates;the internal operating processes critical to the success of the organization.;c. evaluates;how well the company develops and retains its employees.;d. evaluates;the company from the viewpoint of those people who buy its products or services.;154. The perspectives included in the balanced;scorecard approach include all of the following except the;a. internal;process perspective.;b. capacity;utilization perspective.;c. learning;and growth perspective.;d. customer;perspective.;a155. If 10,000 pounds of direct;materials are purchased for $9,300 on account and the standard cost is $.90 per;pound, the journal entry to record the purchase is;a. Raw;Materials Inventory........................................................ 9,300;Accounts;Payable......................................................... 9,300;b. Work;In Process Inventory.................................................... 9,300;Accounts;Payable......................................................... 9,000;Materials;Quantity Variance......................................... 300;c. Raw;Materials Inventory........................................................ 9,300;Accounts;Payable......................................................... 9,000;Materials;Price Variance.............................................. 300;d. Raw;Materials Inventory........................................................ 9,000;Materials;Price Variance....................................................... 300;Accounts;Payable......................................................... 9,300;a 156. Debit balances in variance accounts represent;a. unfavorable;variances.;b. favorable;variances.;c. favorable;for price variances, unfavorable for quantity variances.;d. favorable;for quantity variances, unfavorable for price variances.;a 157. If a company purchases;raw materials on account for $19,830 when the standard cost is $18,900, it will;a. debit;Materials Price Variance for $930.;b. credit;Materials Price Variance for $930.;c. debit;Materials Quantity Variance for $930.;d. credit;Material Quantity Variance for $930.;a158. If a company;issues raw materials to production at a cost of $18,900 when the standard cost;is $18,300, it will;a. debit;Materials Price Variance for $600.;b. credit;Materials Price Variance for $600.;c. debit;Materials Quantity Variance for $600.;d. credit;Material Quantity Variance for $600.;a159. If a company incurs direct labor cost of $82,000 when;the standard cost is $84,000, it will;a. debit;Labor Price Variance for $2,000.;b. credit;Labor Price Variance for $2,000.;c. debit;Labor Quantity Variance for $2,000.;d. credit;Labor Quantity Variance for $2,000.;a160. If a company assigns factory labor to;production at a cost of $84,000 when standard cost is $80,000, it will;a. debit;Labor Price Variance for $4,000.;b. credit;Labor Price Variance for $4,000.;c. debit;Labor Quantity Variance for $4,000.;d. credit;Labor Quantity Variance for $4,000.;a161. The overhead variances;measure whether overhead costs;Are Effectively;Managed Were Used;Effectively;a. Controllable Controllable;and Volume;b. Controllable Volume;c. Controllable and;Volume Controllable;d. Volume Controllable;a162. The overhead volume;variance is;a. actual;overhead less overhead budgeted for actual hours.;b. actual;overhead less overhead budgeted for standard hours allowed.;c. overhead;budgeted for actual hours less applied overhead.;d. the;fixed overhead rate times the difference between normal capacity hours and;standard hours allowed.;a163. Budgeted;overhead for Cinnabar Industries at normal capacity of 30,000 direct labor;hours is $6 per hour variable and $4 per hour fixed. In May, $310,000 of;overhead was incurred in working 31,500 hours when 32,000 standard hours were;allowed. The overhead controllable variance is;a. $5,000;favorable.;b. $2,000;favorable.;c. $10,000;favorable.;d. $10,000;unfavorable.;a164. Budgeted;overhead for Cinnabar Industries at normal capacity of 30,000 direct labor;hours is $6 per hour variable and $4 per hour fixed. In May, $310,000 of;overhead was incurred in working 31,500 hours when 32,000 standard hours were;allowed. The overhead volume variance is;a. $8,000;favorable.;b. $11,000;favorable.;c. $5,000;favorable.;d. $10,000;favorable.;a165. Budgeted;overhead for Haft, Inc. at normal capacity of 60,000 direct labor hours is $3;per hour variable and $2 per hour fixed.;In May, $310,000 of overhead was incurred in working 63,000 hours when 64,000;standard hours were allowed. The overhead;controllable variance is;a. $5,000;favorable.;b. $2,000;favorable.;c. $10,000;favorable.;d. $10,000;unfavorable.;a166. Budgeted;overhead for Haft, Inc. at normal capacity of 60,000 direct labor hours is $3;per hour variable and $2 per hour fixed.;In May, $310,000 of overhead was incurred in working 63,000 hours when 64,000;standard hours were allowed. The overhead volume variance is;a. $8,000 favorable.;b. $11,000;favorable.;c. $5,000;favorable.;d. $10,000;favorable.;a167. An overhead volume variance is calculated as;the difference between normal capacity hours and standard hours allowed;a. times;the total predetermined overhead rate.;b. times;the predetermined variable overhead rate.;c. times;the predetermined fixed overhead rate.;d. divided;by actual number of hours worked.;a168. Which of the following statements is false?;a. The;overhead volume variance indicates whether plant facilities were used;efficiently during the period.;b. The;costs that cause the overhead volume variance are usually controllable costs.;c. The;overhead volume variance relates solely to fixed costs.;d. The;overhead volume variance is favorable if standard hours allowed for output are;greater than the standard hours at normal capacity.;a169. If the standard hours allowed are less than;the standard hours at normal capacity;a. the;overhead volume variance will be unfavorable.;b. variable;overhead costs will be underapplied.;c. the;overhead controllable variance will be favorable.;d. variable;overhead costs will be overapplied.;a170. Which of the following;statements about overhead variances is false?;a. Standard;hours allowed are used in calculating the controllable variance.;b. Standard;hours allowed are used in calculating the volume variance.;c. The;controllable variance pertains solely to fixed costs.;d. The;total overhead variance pertains to both variable and fixed costs.;a171. The overhead volume variance relates only to;a. variable;overhead costs.;b. fixed;overhead costs.;c. both;variable and fixed overhead costs.;d. all;manufacturing costs.;a172. What does the;controllable variance measure?;a. Whether;a company incurred more or less fixed overhead costs compared to the;amount of overhead applied;b. Whether;a company incurred more or less overhead costs than allowed;c. The;efficiency of using variable overhead resources;d. Whether;the production manager is able to control the production;facility;a173. The overhead controllable variance is;calculated as the difference between actual overhead costs incurred and the;budgeted;a. overhead;costs for the standard hours allowed.;b. overhead;costs applied to the product.;c. overhead;costs at the normal level of activity.;d. fixed;overhead costs.;a174. If the standard hours allowed are less than;the standard hours at normal capacity, the volume variance;a. cannot;be calculated.;b. will;be favorable.;c. will;be unfavorable.;d. will;be greater than the controllable variance.;a175. The budgeted overhead costs for standard;hours allowed and the overhead costs applied to the product are the same amount;a. for;both variable and fixed overhead costs.;b. only;when standard hours allowed are less than normal capacity.;c. for;variable overhead costs.;d. for;fixed overhead costs.;a176. The following information;was taken from the annual manufacturing overhead cost budget of Fergie;Manufacturing.;Variable;manufacturing overhead costs $92,400;Fixed;manufacturing overhead costs $55,440;Normal;production level in labor hours 30,800;Normal;production level in units 5,775;Standard;labor hours per unit 4;During the year, 5,600 units were;produced, 18,340 hours were worked, and the actual manufacturing overhead was $151,200.;Actual fixed manufacturing overhead costs equaled budgeted fixed manufacturing;overhead costs. Overhead is applied on the basis of direct labor hours. Fergie's;total overhead rate is;a. $2.40.;b. $4.00.;c. $6.40.;d. $6.53.

 

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