Académique Documents
Professionnel Documents
Culture Documents
ANS: D
2. The standard predominantly used in Western cultures for motivational purposes is a(n) ____
standard.
a. expected annual
b. ideal
c. practical
d. theoretical
ANS: C
ANS: C
WIP FG
Cost of Goods Sold Inventory Inventory
a. no no no
b. no yes yes
c. yes no no
d. yes yes yes
ANS: D
c. allocated among Work in Process, Finished Goods, and Cost of Goods Sold.
d. carried forward as a balance sheet account to the next period.
ANS: C
6. Which of the following factors should not be considered when deciding whether to investigate a
variance?
a. magnitude of the variance
b. trend of the variances over time
c. likelihood that an investigation will reduce or eliminate future occurrences of the
variance
d. whether the variance is favorable or unfavorable
ANS: D
7. When computing variances from standard costs, the difference between actual and standard price
multiplied by actual quantity used yields a
a. combined price-quantity variance.
b. price variance.
c. quantity variance.
d. mix variance.
ANS: B
8. A company wishing to isolate variances at the point closest to the point of responsibility will
determine its material price variance when
a. material is purchased.
b. material is issued to production.
c. material is used in production.
d. production is completed.
ANS: A
9. The sum of the material price variance (calculated at point of purchase) and material quantity
variance equals
a. the total cost variance.
b. the material mix variance.
c. the material yield variance.
d. no meaningful number.
STANDARD CORSTINF AND FLEXIBLE BUDGET
ANS: D
10. A company would most likely have an unfavorable labor rate variance and a favorable labor
efficiency variance if
a. the mix of workers used in the production process was more experienced than the
normal mix.
b. the mix of workers used in the production process was less experienced than the
normal mix.
c. workers from another part of the plant were used due to an extra heavy production
schedule.
d. the purchasing agent acquired very high quality material that resulted in less
spoilage.
ANS: A
11. If actual direct labor hours (DLHs) are less than standard direct labor hours allowed and
overhead is applied on a DLH basis, a(n)
a. favorable variable overhead spending variance exists.
b. favorable variable overhead efficiency variance exists.
c. favorable volume variance exists.
d. unfavorable volume variance exists.
ANS: B
12. The total labor variance can be subdivided into all of the following except
a. rate variance.
b. yield variance.
c. learning curve variance.
d. mix variance.
ANS: C
ANS: A
Sales in Units o
100,000 150,000 200,000
Sales..................... $1,500,000 $2,250,000 $3,000,000
Less variable expenses:
Raw materials............. 220,000 330,000 440,000
Direct labor.............. 240,000 360,000 480,000
Manufacturing overhead.... 180,000 270,000 360,000
Selling and administrative 100,000 150,000 200,000
Total variable expenses .. 740,000 1,110,000 1,480,000
Contribution margin....... 760,000 1,140,000 1,520,000
Less fixed expenses:
Manufacturing overhead.... 337,500 337,500 337,500
Selling and administrative 250,000 250,000 250,000
Total fixed expenses...... 587,500 587,500 587,500
Net income................ $ 172,500 $ 552,500 $ 932,500
Required:
a. The denominator activity level is 150,000 units. What are the predetermined variable and
fixed manufacturing overhead rates?
b. Actual data for the year were as follows:
Actual variable manufacturing overhead cost ....... $211,680
Actual fixed manufacturing overhead cost .......... $343,000
Actual machine-hours incurred ..................... 126,000
Units produced and sold ........................... 120,000
Compute the variable overhead spending and efficiency variances and the fixed overhead
budget and volume variances for the year.
STANDARD CORSTINF AND FLEXIBLE BUDGET
Answer: