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Accounting Module 3 Exam (ch 5 & 6)
Terms in this set (32)
a budget for a single unit of product. it is developed for each of the production inputs (direct materials, direct labor and MOH)and is made up of standard quantity and standard price.
standard price x standard quantity
sales revenue budget
case sold x price per case
sales + ending inventory - beginning inventory
direct labor budget
cases to produce x standard DLH per case = DLH needed
DLH needed x standard wage per DLH = DLB
manufacturing overhead budget
DLH x Variable MOH rate = total variable MOH
Total variable MOH + fixed MOH = total MOH
Total MOH - non cash items = total cash costs
MOH/DLH of fourth quarter
prepared for one level of sales volume at the beginning of a period
prepared for any level of sales volume within relevant range
actual - hybrid
(SP - AP) x (AQ x AV)
hybrid - flexible
SP x (AV-BV)
Sales volume variance
master - flexible
flexible budget variance
flexible - actual
static budget variance
Master - actual
AP x AQ x AV
SP x AQ x AV
SP x SQ x AV
SP x SQ x BV
who is responsible for the direct material price variance?
who is responsible for the direct material quantity variance?
who is responsible for the direct labor rate variance?
Human Resources manager
Who is responsible for the direct labor efficiency variance
if the actual budget is less than any of the other budgets than it is favorable
if the actual budget is more than any of the other budgets than it is favorable
direct labor price variance is unfavorable, but direct labor efficiency variance more than makes up for it. should the human resource manager be blamed or rewarded?
rewarded because she hired skilled workers that were more efficient even though they cost more per hour
direct materials price variance is favorable, but the large and unfavorable direct material efficiency variance wipes it out. is this solely the production managers fault?
yes, because they bought cheaper, poor quality raw materials which results in more wasted because inputs don't meet our quality standards
what would result in an unfavorable direct labor efficiency variance?
using significant overtime
explanation for a favorable direct material quantity variance?
purchased higher quality materials than specified
what would result in an unfavorable direct material price variance with a favorable direct labor efficiency variance?
the purchase and use of a higher-than-standard quality of materials
Which of the following statements regarding standard costs is false?
The standard cost multiplied by the standard quantity yields the standard price.
Which of these variances does not measure cost control?
sales volume variance
Which of the following is a benefit of participative budgeting?
Lower-level managers know more details than their bosses, which makes the budgets more accurate.
it is never the actually number of the previous month, it is the percentage given multiplied by the actual number (look at problems 2 & 3 of practice exam)
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