Accounting 2 - Chapter 23 - Test 3 - Review MC
Terms in this set (32)
Standard costs are used in companies for a variety of reasons. Which of the following is not one of the benefits for using standard costs?
Used to indicate where changes in technology and machinery need to be made.
Manufacturing companies use standard costs for the following except:
Several people play an essential part in setting standards. Which of the following is incorrect as to setting standards?
Quality managers provide quality measures that will be used to evaluate rejects.
Standards that represent levels of operation that can be attained with reasonable effort are called:
Which of the following conditions normally would not indicate that standard costs should be revised?
Actual costs differed from standard costs for the preceding week.
The principle of exceptions allows managers to
focus on correcting variances between standard costs and actual costs.
The standard price and quantity of direct materials are separated because:
direct materials prices are controlled by the purchasing department, and quantity used is controlled by the production department
Standard costs are divided into which of the following components?
Price Standard and Quantity Standard
A favorable cost variance occurs when
Standard costs are more than actual costs.
Total manufacturing cost variance includes:
Direct materials cost variance, direct labor cost variance, factory overhead cost variance
Periodic comparisons between planned objectives and actual performance are reported in:
budget performance reports
Which of the following is not a reason standard costs are separated in two components?
variances brings attention to discrepancies in the budget and requires managers to revise budgets closer to actual.
If the actual quantity of direct materials used in producing a commodity differs from the standard quantity, the variance is termed:
If the price paid per unit differs from the standard price per unit for direct materials, the variance is termed:
If the wage rate paid per hour differs from the standard wage rate per hour for direct labor, the variance is termed:
If the actual direct labor hours spent producing a commodity differ from the standard hours, the variance is termed:
The formula to compute direct material quantity variance is to calculate the difference between
(actual quantity * standard price) - standard costs
The formula to compute direct labor rate variance is to calculate the difference between
actual costs - (actual hours * standard rate)
The formula to compute direct labor time variance is to calculate the difference between
(actual hours * standard rate) - standard costs
Which of the following would not lend itself to applying direct labor variances?
Which of the following is not a reason for a direct materials quantity variance?
Material requiring rework
The formula to compute direct materials price variance is to calculate the difference between
actual costs - (actual quantity * standard price)
Assuming that the standard fixed overhead rate is based on full capacity, the cost of available but unused productive capacity is indicated by the:
factory overhead cost volume variance
The controllable variance measures:
the efficiency of using variable overhead resources
The unfavorable volume variance may be due to all but the following factors:
unexpected increases in the cost of utilities
Favorable volume variances may be harmful when:
production in excess of normal capacity cannot be sold
Incurring actual indirect factory wages in excess of budgeted amounts for actual production results in a:
A negative fixed overhead volume variance can be caused due to the following except:
Increase in utility costs
The use of standards for nonmanufacturing expenses is:
not as common as it is for manufacturing costs
If at the end of the fiscal year the variances from standard are significant, the variances should be transferred to the:
work in process, cost of goods sold, and finished goods accounts
Variances from standard costs are usually reported to:
At the end of the fiscal year, variances from standard costs are usually transferred to the:
cost of goods sold account