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Exam 22: Performance Evaluation Using Variances From Standard Costs

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Question 51

True/False

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Financial reporting systems that are guided by the principle of exceptions concept focus attention on variances from standard costs.

A) True
B) False

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Question 52

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Calculate the Total Direct Labor Variance using the above information

A) $2,051.25 Favorable
B) $2,051.25 Unfavorable
C) $2,362.50 Unfavorable
D) $2,362.50 Favorable

E) B) and D)
F) None of the above

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Question 53

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A company records their inventory purchases at standard cost but also records purchase price variances. The company purchased 5,000 widgets $8.00. The standard cost for the widgets is $7.60. Which of the following would be included in the journal entry?

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows: The amount of the factory overhead controllable variance is:

Standards are designed to evaluate price and quantity variances separately.

Robin Company purchased and used 520 pounds of direct materials to produce a product with a 510 pound standard direct materials requirement. The standard materials price is $2.10 per pound. The actual materials price was $2.00 per pound. Prepare the journal entries to record (1) the purchase of the materials and (2) the material entering production. Robin records standards and variances in the general ledger.

Nonfinancial performance output measures are used to improve the input measures.

At the end of the fiscal year, variances from standard costs are usually transferred to the:

The following data is given for the Bahia Company: Overhead is applied on standard labor hours. The factory overhead controllable variance is:

The Flapjack Corporation had 8,200 actual direct labor hours at an actual rate of $12.40 per hour. Original production had been budgeted for 1,100 units, but only 1,000 units were actually produced. Labor standards were 7.6 hours per completed unit at a standard rate of $13.00 per hour. Compute the labor time variance.

A negative fixed overhead volume variance can be caused due to the following except:

The following data is given for the Stringer Company: Overhead is applied on standard labor hours. The direct material price variance is:

Cost systems using detailed estimates of each element of manufacturing cost entering into the finished product are called budgeted cost systems.

The difference between the standard cost of a product and its actual cost is called a variance.

Ruby Company produces a chair that requires 5 yds. of material per unit. The standard price of one yard of material is $7.60. During the month, 8,500 chairs were manufactured, using 40,000 yards at a cost of $7.50. Determine the (a) price variance, (b) quantity variance, and (c) cost variance.

Because accountants have financial expertise, they are the only ones that are able to set standard costs for the production area.

The following data is given for the Taylor Company: Overhead is applied on standard labor hours. Compute the direct labor rate and time variances for Taylor Company.

The following data relate to direct materials costs for November: What is the direct materials price variance?

Normally standard costs should be revised when labor rates change to incorporate new union contracts.

An unfavorable cost variance occurs when budgeted cost at actual volumes exceeds actual cost.