Quiz 10: Standard Costs and the Balanced Scorecard

Managerial Accounting

Business
117
Questions
15
True/False
86
Choices
16
Essay
Quiz Mode
Quiz Mode is disabled becuase you need to unlock this quiz first.

Quiz Mode allows you to practice the quiz as a real exam, you'll have a timer, answers will be hidden, you'll be allowed to fill your answers, get the result at the end and store your results.

Quiz Materials

Use the following to answer questions 52-54:
Stench Foods Company uses a standard cost system to collect costs related to the production
of its garlic flavored yogurt. The garlic (materials) standards for each container of yogurt
produced are 0.8 ounces of crushed garlic at a standard cost of $2.30 per ounce.
During the month of June, Stench purchased 75,000 ounces of crushed garlic at a total cost of
$171,000. Stench used 64,000 of these ounces to produce 71,500 containers of yogurt.


Use the following to answer questions 55-57:
Holiday Chemical Company uses a standard cost system to collect costs related to the
production of its “bowling ball” fruitcakes. The direct labor standard for each fruitcake is 1.25
hours at a standard cost of $11.00 per hour. During the month of November, Holiday's
fruitcake production used 9,820 direct labor hours at a total direct labor cost of $106,547. This
resulted in production of 8,500 fruitcakes for November.


Use the following to answer questions 58-59:
Debit Dave and his four teaching assistants grade all 1,000 of their managerial accounting
exams as a group. The average number of exams graded per hour by each person is as
follows:
Debit Dave Joanne Karen Andy Tom
Number of exams 45 32 28 25 20
Debit Dave is considering the above information in setting a standard for grading the next
examination.


Use the following to answer questions 60-65:
Pardoe, Inc., manufactures a single product in which variable manufacturing overhead is
assigned on the basis of direct labor hours. The company uses a standard cost system and has
established the following standards for one unit of product:
Standard Standard Price Standard
Quantity or Rate Cost
Direct materials ............................. 1.5 pounds $3.00 per pound $4.50
Direct labor .................................... 0.6 hours $6.00 per hour $3.60
Variable manufacturing overhead . 0.6 hours $1.25 per hour $0.75
During March, the following activity was recorded by the company:
• The company produced 3,000 units during the month.
• A total of 8,000 pounds of material were purchased at a cost of $23,000.
• There was no beginning inventory of materials on hand to start the month; at the end of
the month, 2,000 pounds of material remained in the warehouse.
• During March, 1600 direct labor hours were worked at a rate of $6.50 per hour.
• Variable manufacturing overhead costs during March totaled $1,800.


Use the following to answer questions 66-67:
The following data pertain to Nell Company's operations for June:
Standard quantity of materials per unit of product ...... 5 pounds
Standard cost of materials per pound .......................... $0.20
Standard direct labor hours ......................................... 0.04 hours
Standard wage rate per hour ........................................ $7.00
Actual output ............................................................... 100,000 units
Materials purchased .................................................... 100,000 pounds
Actual cost of materials purchased per pound ............ $0.17
Materials used ............................................................. 60,000 pounds
Actual direct labor hours required ............................... 3,900 hours
Actual direct labor cost per hour ................................. $7.20
The materials price variance is recognized when materials are purchased.


Use the following to answer questions 68-71:
The Collins Company uses standard costing and has established the following direct material
and direct labor standards for each unit of the single product it makes:
Direct materials ........... 4 gallons at $8 per gallon
Direct labor .................. 1 hour at $16 per hour
During July, the company made 6,000 units of product and incurred the following costs:
Direct materials purchased ......... 26,800 gallons at $8.20 per gallon
Direct materials used .................. 25,200 gallons
Direct labor used ........................ 5,600 hours at $15.30 per hour


Use the following to answer questions 72-75:
Jackson Industries employs a standard cost system in which direct materials inventory is
carried at standard cost. Jackson has established the following standards for one unit of
product.
Standard Standard Price Standard
Quantity or Rate Cost
Direct materials .......... 5 pounds $3.60 per pound $18.00
Direct labor ................. 1.25 hours $12.00 per hour $15.00
During May, Jackson purchased 125,000 pounds of direct material at a total cost of $475,000.
The total factory wages for May were $364,000, 90 percent of which were for direct labor.
Jackson manufactured 22,000 units of product during May using 108,000 pounds of direct
material and 28,000 direct labor hours.


Use the following to answer questions 76-79:
Arrow Industries employs a standard cost system in which direct materials inventory is
carried at standard cost. Arrow has established the following standards for one unit of
product.
Standard Standard Price Standard
Quantity or Rate Cost
Direct material .......... 8 pounds $1.80 per pound $14.40
Direct labor ............... 0.25 hour $8.00 per hour $2.00
During November, Arrow purchased 160,000 pounds of direct material at a total cost of
$304,000. The total factory wages for November were $42,000, 90 percent of which were for
direct labor. Arrow manufactured 19,000 units of product during November using 142,500
pounds of direct material and 5,000 direct labor hours.


Use the following to answer questions 80-84:
The Dresden Company uses standard costing for the single product the company makes and
sells. The following data are for the month of April:
• Actual cost of direct material purchased and used: $62,400
• Material price variance: $4,800 unfavorable
• Total materials variance: $14,400 unfavorable
• Standard cost per pound of material: $6
• Standard cost per direct labor hour: $8
• Actual direct labor hours: 3,800 hours
• Labor efficiency variance: $1,600 favorable
• Standard number of direct labor hour per unit of product: 2
• Total labor variance: $680 unfavorable


Use the following to answer questions 85-86:
The following materials standards have been established for a particular product:
Standard quantity per unit of output .......... 9.6 meters
Standard price ............................................ $14.80 per meter
The following data pertain to operations concerning the product for the last month:
Actual materials purchased ....................... 2,600 meters
Actual cost of materials purchased ........... $37,830
Actual materials used in production .......... 2,200 meters
Actual output ............................................. 400 units


Use the following to answer questions 87-88:
Blaster, Inc., manufactures portable radios. Each radio requires 3 units of Part XBEZ52,
which has a standard cost of $1.45 per unit. During May, the company purchased 12,000 units
of the part for a total of $18,000. Also during May, the company manufactured 3,000 radios,
using 10,000 units of part XBEZ52.


Use the following to answer questions 89-90:
The following labor standards have been established for a particular product:
Standard labor hours per unit of output ........ 7.7 hours
Standard labor rate ....................................... $15.55 per hour
The following data pertain to operations concerning the product for the last month:
Actual hours worked ............ 9,800 hours
Actual total labor cost .......... $151,900
Actual output ........................ 1,200 units


Use the following to answer questions 91-92:
A product's standard cost card specifies that a unit of the product requires 4 direct labor-hours.
During September, 3,350 units were made, which was 150 units less than budgeted. The total
budgeted direct labor cost for September was $117,600. The direct labor cost incurred during
September was $111,850 and 13,450 direct labor-hours were worked.


Use the following to answer questions 93-94:
The following standards for variable manufacturing overhead have been established for a
company that makes only one product:
Standard hours per unit of output .............. 3.2 hours
Standard variable overhead rate ................ $12.70 per hour
The following data pertain to operations for the last month:
Actual hours ................................................ 1,600 hours
Actual total variable overhead cost ............. $19,600
Actual output ............................................... 400 units


Use the following to answer questions 95-96:
The Maxwell Company has a standard costing system in which variable manufacturing
overhead is assigned to production on the basis of machine hours. The following data are
available for July:
• Actual variable manufacturing overhead cost incurred: $22,620
• Actual machine hours worked: 1,600
• Variable overhead spending variance: $3,420 unfavorable
• Total variable overhead variance: $4,620 unfavorable


Use the following to answer questions 97-98:
Vermeillen Corporation uses a standard costing system in which variable manufacturing
overhead is assigned to production on the basis of the number of machine setups. The
following data pertain to one month's operations:
• Variable manufacturing overhead cost incurred: $70,000
• Total variable overhead variance: $4,550 favorable
• Standard machine setups allowed for actual production: 3,550
• Actual machine setups incurred: 3,500


Use the following to answer questions 99-101:
The following data pertain to operations at Quick Incorporated:
Throughput time ................ 4 hours
Delivery cycle time ........... 8 hours
Process time ...................... 1 hour
Queue time ........................ 2 hours


Questions

Q1
Free

Caprice Corporation is a wholesaler of industrial goods. Data regarding the store's
operations follow:
• Sales are budgeted at $350,000 for November, $320,000 for December, and
$300,000 for January.
• Collections are expected to be 80% in the month of sale, 16% in the month
following the sale, and 4% uncollectible.
• The cost of goods sold is 70% of sales.
• The company purchases 60% of its merchandise in the month prior to the month of
sale and 40% in the month of sale. Payment for merchandise is made in the month
following the purchase.
• The November beginning balance in the accounts receivable account is $78,000.
• The November beginning balance in the accounts payable account is $254,000.
Required:
a. Prepare a Schedule of Expected Cash Collections for November and December.
b. Prepare a Merchandise Purchases Budget for November and December.

Essay
expand_more
Answer:
a. November December Sales ................................................................................ $350,000 $320,000 Schedule of Expected Cash Collections Accounts receivable ........................................................ $ 78,000 November sales ............................................................... 280,000 $ 56,000 December sales ............................................................... 256,000 Total cash collections ..................................................... $358,000 $312,000 b. November December Cost of goods sold .......................................................... $245,000 $224,000 Merchandise Purchases Budget November sales ............................................................... $ 98,000 December sales ............................................................... 134,400 $ 89,600 January sales ................................................................... 126,000 Total purchases ............................................................... $232,400 $215,600 Disbursements for merchandise ...................................... $254,000 $232,400
Q2
Free

A direct material quantity standard generally includes an allowance for waste.

True/False
expand_more
A) True.
B) False.
Answer:
False
Q3
Free

Practical standards allow for normal machine downtime and employee rest periods.

True/False
expand_more
A) True.
B) False.
Answer:
False
Q4

Ideal standards can be used in forecasting and planning whereas practical standards
cannot be used for such purposes.

True/False
expand_more
A) True.
B) False.
Answer:

Subscribe First.

Q5

Most companies compute the materials price variance when materials are placed into
production.

True/False
expand_more
A) True.
B) False.
Answer:

Subscribe First.

Q6

A materials price variance is favorable if the actual price exceeds the standard price.

True/False
expand_more
A) True.
B) False.
Answer:

Subscribe First.

Q7

An unfavorable materials quantity variance occurs when the actual quantity used in
production is less than the standard quantity allowed for the actual output of the
period.

True/False
expand_more
A) True.
B) False.
Answer:

Subscribe First.

Q8

An unfavorable labor rate variance can occur if workers with high hourly wage rates
are assigned to work on products whose standards assume workers with low hourly
wage rates.

True/False
expand_more
A) True.
B) False.
Answer:

Subscribe First.

Q9

If variable manufacturing overhead is applied based on direct labor-hours, it is
impossible to have a favorable labor efficiency variance and unfavorable variable
overhead efficiency variance for the same period.

True/False
expand_more
A) True.
B) False.
Answer:

Subscribe First.

Q10

A balanced scorecard contains both customer and internal business process
performance measures since improvements in customer satisfaction should result in
improvements in internal business processes.

True/False
expand_more
A) True.
B) False.
Answer:

Subscribe First.

Q11

Different companies, having different strategies, should have different balanced
scorecards even if they are in the same industry.

True/False
expand_more
A) True.
B) False.
Answer:

Subscribe First.

Q12

A manufacturing cycle efficiency (MCE) ratio of less than 1.00 is desirable since this
ratio measures the amount of non-value-added time to throughput time.

True/False
expand_more
A) True.
B) False.
Answer:

Subscribe First.

Q13

A favorable materials quantity variance would appear as a debit in a journal entry.

True/False
expand_more
A) True.
B) False.
Answer:

Subscribe First.

Q14

Although formal entry of standard costs and variances into the accounting records is
not required, some organizations make such entries in order to emphasize the
importance of variances as well as to simplify the bookkeeping process.

True/False
expand_more
A) True.
B) False.
Answer:

Subscribe First.

Q15

A standard can be regarded as the budgeted cost for one unit of product.

True/False
expand_more
A) True.
B) False.
Answer:

Subscribe First.

Q16

In using a statistical control chart, observation points plotted between the upper and
lower limits are considered to be random or chance occurrences and would not
typically result in an investigation.

True/False
expand_more
A) True.
B) False.
Answer:

Subscribe First.

Q17

Which of the following statements concerning ideal standards is incorrect?

Multiple Choice
expand_more
A) Ideal standards generally do not provide the best motivation for workers.
B) Ideal standards do not make allowances for waste, spoilage, and machine breakdowns.
C) Ideal standards are better suited for cash budgeting than practical standards.
D) Ideal standards may be better than practical standards when managers seek continual improvement.
Answer:

A) You need to subscribe to get the answer.

Q18

Under traditional standard costing, which of the following would commonly be
included when setting a standard quantity for direct material?
An allowance for An allowance for
material wasted material rejected
during production during production

Multiple Choice
expand_more
A) Yes Yes
B) Yes No
C) No Yes
D) No No
Answer:

A) You need to subscribe to get the answer.

Q19

When computing standard cost variances, the difference between actual and standard
price multiplied by actual quantity yields a(n):

Multiple Choice
expand_more
A) combined price and quantity variance.
B) efficiency variance.
C) price variance.
D) quantity variance.
Answer:

A) You need to subscribe to get the answer.

Q20

Poor quality materials could have an unfavorable effect on which of the following
variances?
Labor Materials
Efficiency Quantity
Variance Variance

Multiple Choice
expand_more
A) Yes Yes
B) Yes No
C) No Yes
D) No No
Answer:

A) You need to subscribe to get the answer.

Q21

When the actual price paid on credit for a raw material exceeds its standard price, the
journal entry would include:

Multiple Choice
expand_more
A) Debit to Raw Materials; Credit to Materials Price Variance
B) Debit to Accounts Payable; Credit to Materials Price Variance
C) Debit to Raw Materials; Debit to Materials Price Variance
D) Debit to Accounts Payable; Debit to Materials Price Variance
Answer:

A) You need to subscribe to get the answer.

Q22

When the actual price paid on credit for a raw material is less than its standard price,
the journal entry would include:

Multiple Choice
expand_more
A) Credit to Raw Materials; Credit to Materials Price Variance
B) Credit to Accounts Payable; Credit to Materials Price Variance
C) Credit to Raw Materials; Debit to Materials Price Variance
D) Credit to Accounts Payable; Debit to Materials Price Variance
Answer:

A) You need to subscribe to get the answer.

Q23

When the actual amount of a raw material used in production is less than the standard
amount allowed for the actual output, the journal entry would include:

Multiple Choice
expand_more
A) Credit to Raw Materials; Credit to Materials Quantity Variance
B) Credit to Work-In-Process; Credit to Materials Quantity Variance
C) Credit to Raw Materials; Debit to Materials Quantity Variance
D) Credit to Work-In-Process; Debit to Materials Quantity Variance
Answer:

A) You need to subscribe to get the answer.

Q24

When the actual amount of a raw material used in production is greater than the
standard amount allowed for the actual output, the journal entry would include:

Multiple Choice
expand_more
A) Credit to Raw Materials; Credit to Materials Quantity Variance
B) Credit to Work-In-Process; Credit to Materials Quantity Variance
C) Credit to Raw Materials; Debit to Materials Quantity Variance
D) Credit to Work-In-Process; Debit to Materials Quantity Variance
Answer:

A) You need to subscribe to get the answer.

Q25

Which of the following would produce a materials price variance?

Multiple Choice
expand_more
A) an excess quantity of materials used.
B) an excess number of direct labor-hours worked in completing a job.
C) shipping materials to the plant by air freight rather than by truck.
D) breakage of materials in production.
Answer:

A) You need to subscribe to get the answer.

Q26

The standard price per unit of materials is used in the calculation of which of the
following variances?
Materials
price
variance
Materials
quantity
variance

Multiple Choice
expand_more
A) No No
B) No Yes
C) Yes No
D) Yes Yes
Answer:

A) You need to subscribe to get the answer.

Q27

A labor efficiency debit balance indicates that:

Multiple Choice
expand_more
A) The wage rate paid to production workers was less the standard.
B) The wage rate paid to production workers was above the standard.
C) Less labor time was spent on production than was called for by the standard.
D) More labor time was spent on production than was called for by the standard.
Answer:

A) You need to subscribe to get the answer.

Q28

When the actual wage rate paid to direct labor workers exceeds the standard wage rate,
the journal entry would include:

Multiple Choice
expand_more
A) Credit to Wages Payable; Credit to Labor Rate Variance
B) Credit to Work-In-Process; Credit to Labor Rate Variance
C) Credit to Wages Payable; Debit to Labor Rate Variance
D) Credit to Work-In-Process; Debit to Labor Rate Variance
Answer:

A) You need to subscribe to get the answer.

Q29

When the actual wage rate paid to direct labor workers is less than the standard wage
rate, the journal entry would include:

Multiple Choice
expand_more
A) Debit to Wages Payable; Credit to Labor Rate Variance
B) Debit to Work-In-Process; Credit to Labor Rate Variance
C) Debit to Wages Payable; Debit to Labor Rate Variance
D) Debit to Work-In-Process; Debit to Labor Rate Variance
Answer:

A) You need to subscribe to get the answer.

Q30

When the actual direct labor-hours exceed the standard direct labor-hours allowed for
the actual output of the period, the journal entry would include:

Multiple Choice
expand_more
A) Credit to Wages Payable; Credit to Labor Efficiency Variance
B) Credit to Work-In-Process; Credit to Labor Efficiency Variance
C) Credit to Wages Payable; Debit to Labor Efficiency Variance
D) Credit to Work-In-Process; Debit to Labor Efficiency Variance
Answer:

A) You need to subscribe to get the answer.

Q31

Which of the following would produce a labor rate variance?

Multiple Choice
expand_more
A) Poor quality materials causing breakage and work interruptions.
B) Use of persons with high hourly wage rates in tasks that call for low hourly wage rates.
C) Excessive number of hours worked in completing a job.
D) An unfavorable variable overhead spending variance.
Answer:

A) You need to subscribe to get the answer.

Q32

In a certain standard costing system direct labor-hours are used as the base for
applying variable manufacturing overhead costs. The standard direct labor rate is
twice the variable manufacturing overhead rate. Last period the labor efficiency
variance was unfavorable. From this information one can conclude that last period the
variable overhead efficiency variance was:

Multiple Choice
expand_more
A) unfavorable and half the labor efficiency variance.
B) favorable and half the labor efficiency variance.
C) unfavorable and twice the labor efficiency variance.
D) favorable and twice the labor efficiency variance.
Answer:

A) You need to subscribe to get the answer.

Q33

A manager would like to see a decreasing trend in all of the following operating
measures except:

Multiple Choice
expand_more
A) Customer complaints as a percentage of units sold.
B) Scrap as a percentage of total cost.
C) Setup time.
D) Manufacturing cycle efficiency.
Answer:

A) You need to subscribe to get the answer.

Q34

Which of the following will increase a company's manufacturing cycle efficiency
(MCE)?
Decrease in Decrease in
Inspection Time Queue Time

Multiple Choice
expand_more
A) Yes Yes
B) Yes No
C) No Yes
D) No No
Answer:

A) You need to subscribe to get the answer.

Q35

If raw materials are carried in the raw materials inventory at standard cost, then it is
reasonable to assume that:

Multiple Choice
expand_more
A) the price variance is recognized when materials are purchased.
B) the price variance is recognized when materials are placed into production.
C) all variances are prorated between work in process, finished goods, and cost of goods sold.
D) the raw materials account is overstated.
Answer:

A) You need to subscribe to get the answer.

Q36

Which of the following statements is a good description of the variances that should
be investigated under the management by exception concept?

Multiple Choice
expand_more
A) all variances should be investigated.
B) only unfavorable variances should be investigated.
C) a small random sample of all variances should be investigated.
D) unusually large favorable and unfavorable variances should be investigated.
Answer:

A) You need to subscribe to get the answer.

Q37

The following direct labor information pertains to the manufacture of product Glu:
Time required to make one unit .................................. 2 direct labor-hours
Number of direct labor workers .................................. 50 workers
Number of productive hours per week, per worker ..... 40 hours
Weekly wages per worker ........................................... $500
Workers’ benefits treated as direct labor costs ............ 20% of wages
What is the standard direct labor cost per unit of product Glu?

Multiple Choice
expand_more
A) $30
B) $24
C) $15
D) $12
Answer:

A) You need to subscribe to get the answer.

Q38

Anderson Company purchased 20,000 pounds of direct material at $0.70 per pound.
The standard cost per pound of material is $0.60 per pound. The general ledger entry
to record the issuance of materials would include:

Multiple Choice
expand_more
A) a debit to Materials Price Variance $2,000.
B) a credit to Materials Price Variance of $2,000.
C) a credit to Raw Materials of $0.70 per pound times the number of pounds issued.
D) a credit to Raw Materials of $0.60 per pound times the number of pounds issued.
Answer:

A) You need to subscribe to get the answer.

Q39

The following materials standards have been established for a particular raw material
used in the company's sole product:
Standard quantity per unit of output .......... 1.0 pound
Standard price ............................................ $16.60 per pound
The following data pertain to operations concerning the product for the last month:
Actual materials purchased ....................... 2,200 pounds
Actual cost of materials purchased ............ $34,650
Actual materials used in production .......... 1,900 pounds
Actual output ............................................. 2,100 units
What is the materials quantity variance for the month?

Multiple Choice
expand_more
A) $3,320 F
B) $3,150 F
C) $4,980 U
D) $4,725 U
Answer:

A) You need to subscribe to get the answer.

Q40

The following materials standards have been established for a particular raw material
used in the company's sole product:
Standard quantity per unit of output .......... 0.1 pound
Standard price ............................................ $18.20 per pound
The following data pertain to operations for the last month:
Actual materials purchased ....................... 5,700 pounds
Actual cost of materials purchased ............ $100,320
Actual materials used in production .......... 5,600 pounds
Actual output ............................................. 55,800 units
What is the materials price variance for the month?

Multiple Choice
expand_more
A) $1,820 U
B) $1,760 U
C) $3,420 F
D) $352 U
Answer:

A) You need to subscribe to get the answer.

Q41

A quantity of a particular raw material was purchased for $43,250. The standard cost
of the material was $2.00 per kilogram and there was an unfavorable materials price
variance of $3,250. How many kilograms were purchased?

Multiple Choice
expand_more
A) 20,000
B) 21,625
C) 23,250
D) 24,875
Answer:

A) You need to subscribe to get the answer.

Q42

A total of 6,850 kilograms of a raw material was purchased at a total cost of $21,920.
The material price variance was $1,370 favorable. The standard price per kilogram for
the raw material must be:

Multiple Choice
expand_more
A) $0.20
B) $3.00
C) $3.20
D) $3.40
Answer:

A) You need to subscribe to get the answer.

Q43

Results of operations for the Anderson Company indicated that the actual direct labor
rate for the month of May was $9.75 while the standard rate was $10.00. The general
ledger entry to record the incurrence of direct labor cost would include:

Multiple Choice
expand_more
A) a debit to Work-In-Process for the actual number of hours times $9.75 per hour.
B) a debit to Work-In-Process for the standard number of hours times $10.00 per hour.
C) a debit to Work-In-Process for the standard number of hours times $9.75 per hour.
D) a debit to Work-In-Process for the actual number of hours times $10.00 per hour.
Answer:

A) You need to subscribe to get the answer.

Q44

The following labor standards have been established for a particular product:
Standard labor-hours per unit of output ............. 8.0 hours
Standard labor rate .............................................. $13.10 per hour
The following data pertain to operations concerning the product for the last month:
Actual hours worked ............ 4,000 hours
Actual total labor cost ........... $53,000
Actual output ........................ 400 units
What is the labor efficiency variance for the month?

Multiple Choice
expand_more
A) $10,600 U
B) $11,080 U
C) $11,080 F
D) $10,480 U
Answer:

A) You need to subscribe to get the answer.

Q45

The following labor standards have been established for a particular product:
Standard labor-hours per unit of output ............. 2.4 hours
Standard labor rate .............................................. $15.45 per hour
The following data pertain to operations concerning the product for the last month:
Actual hours worked ............ 5,400 hours
Actual total labor cost ........... $85,860
Actual output ........................ 2,200 units
What is the labor rate variance for the month?

Multiple Choice
expand_more
A) $1,908 U
B) $2,430 U
C) $4,284 U
D) $4,284 F
Answer:

A) You need to subscribe to get the answer.

Q46

The following information pertains to Bates Company's direct labor for March:
Standard direct labor-hours ....................... 21,000
Actual direct labor-hours ........................... 20,000
Favorable direct labor rate variance .......... $8,400
Standard direct labor rate per hour ............ $6.30
What was Bates' total actual direct labor cost for March?

Multiple Choice
expand_more
A) $117,600
B) $118,000
C) $134,000
D) $134,400
Answer:

A) You need to subscribe to get the answer.

Q47

The direct labor standards for a particular product are:
4 hours of direct labor @ $12.00 per direct labor-hour = $48.00
During October, 3,350 units of this product were made, which was 150 units less than
budgeted. The labor cost incurred was $159,786 and 13,450 direct labor-hours were
worked. The direct labor variances for the month were:
Labor Rate Variance Labor Efficiency Variance

Multiple Choice
expand_more
A) $1,614 U $600 U
B) $1,614 U $600 F
C) $1,614 F $600 U
D) $1,614 F $600 F
Answer:

A) You need to subscribe to get the answer.

Q48

The standard cost card of a particular product specifies that it requires 4.5 direct laborhours
at $12.80 per direct labor-hour. During March, 2,300 units of the product were
produced and direct labor wages of $128,300 were incurred. A total of 11,700 direct
labor-hours were worked. The direct labor variances for the month were:
Labor Rate Variance Labor Efficiency Variance

Multiple Choice
expand_more
A) $4,180 F $14,804 U
B) $4,180 F $17,280 U
C) $21,460 F $14,804 U
D) $21,460 F $17,280 U
Answer:

A) You need to subscribe to get the answer.

Q49

The following standards for variable manufacturing overhead have been established
for a company that makes only one product:
Standard hours per unit of output .............. 5.6 hours
Standard variable overhead rate ................ $19.15 per hour
The following data pertain to operations for the last month:
Actual hours ................................................ 5,100 hours
Actual total variable overhead cost ............. $99,195
Actual output ............................................... 1,100 units
What is the variable overhead efficiency variance for the month?

Multiple Choice
expand_more
A) $20,299 F
B) $18,769 F
C) $1,848 F
D) $20,617 F
Answer:

A) You need to subscribe to get the answer.

Q50

The following standards for variable manufacturing overhead have been established
for a company that makes only one product:
Standard hours per unit of output .............. 2.8 hours
Standard variable overhead rate ................ $16.30 per hour
The following data pertain to operations for the last month:
Actual hours ................................................ 7,600 hours
Actual total variable overhead cost ............. $127,300
Actual output ............................................... 2,500 units
What is the variable overhead spending variance for the month?

Multiple Choice
expand_more
A) $3,420 U
B) $3,150 F
C) $10,050 U
D) $13,200 U
Answer:

A) You need to subscribe to get the answer.

Q51

Sanchez Custom Yachts, Inc. manufactures and sells luxury yachts. From the time an
order is placed till the time the yacht reaches the customer averages 200 days. These
200 days are spent as follows:
Wait time ........................... 50 days
Move time .......................... 10 days
Process time ....................... 90 days
Queue time ........................ 30 days
Inspection time .................. 20 days
What is Sanchez's manufacturing cycle efficiency (MCE) for its yachts?

Multiple Choice
expand_more
A) 0.45
B) 0.50
C) 0.60
D) 0.65
Answer:

A) You need to subscribe to get the answer.

Q52

During the month of May, Domino Manufacturing Corporation purchased materials
that had a total standard cost of $57,000. The Materials Price Variance on these
materials was $3,000 favorable. What summary journal entry would Domino make to
record this purchase and variance for May?

Multiple Choice
expand_more
A) Work in Process 57,000 Materials Price Variance 3,000 Raw Materials 60,000
B) Work in Process 54,000 Materials Price Variance 3,000 Raw Materials 57,000
C) Raw Materials 57,000 Materials Price Variance 3,000 Accounts Payable 54,000
D) Raw Materials 57,000 Materials Price Variance 3,000 Accounts Payable 60,000
Answer:

A) You need to subscribe to get the answer.

Q53

What is Stench's materials price variance for the month of June?

Multiple Choice
expand_more
A) $1,500 favorable
B) $15,640 unfavorable
C) $17,250 favorable
D) $23,800 favorable
Answer:

A) You need to subscribe to get the answer.

Q54

What is Stench's materials quantity variance for the month of June?

Multiple Choice
expand_more
A) $1,500 favorable
B) $15,640 unfavorable
C) $17,250 favorable
D) $23,800 favorable
Answer:

A) You need to subscribe to get the answer.

Q55

Assume that it takes 15 minutes of labor time to crush enough garlic to fill one
container of yogurt. Because the smell of the garlic can be unbearable, workers are
given (and they take it!) 10 minutes of break time every hour (i.e., 50 minutes of work,
10 minutes of break). How many minutes should Stench use as a standard quantity of
labor time per container of yogurt?

Multiple Choice
expand_more
A) 18.0
B) 16.2
C) 17.0
D) 17.5
Answer:

A) You need to subscribe to get the answer.

Q56

What is Holiday's labor rate variance for November?

Multiple Choice
expand_more
A) $8,855 favorable
B) $1,473 favorable
C) $13,047 unfavorable
D) $14,520 unfavorable
Answer:

A) You need to subscribe to get the answer.

Q57

What is Holiday's labor efficiency variance for November?

Multiple Choice
expand_more
A) $8,855 favorable
B) $10,328 favorable
C) $13,047 unfavorable
D) $14,520 unfavorable
Answer:

A) You need to subscribe to get the answer.

Q58

Assume that 7 ounces of pecans are included in each bowling ball fruitcake. Because
Holiday wants only the best pecans in its fruitcakes, the pecans they buy are inspected
and some are discarded as unacceptable for fruitcake production. The loss rate is
expected to be 1 ounce of pecans for every 5 ounces inspected. Under traditional
standard costing, how many ounces of pecans should Holiday use as a standard
quantity per fruitcake?

Multiple Choice
expand_more
A) 7.20
B) 7.80
C) 8.40
D) 8.75
Answer:

A) You need to subscribe to get the answer.

Q59

Which amount above best represents a practical standard?

Multiple Choice
expand_more
A) 45
B) 32
C) 25
D) 20
Answer:

A) You need to subscribe to get the answer.

Q60

Which amount above best represents an ideal standard?

Multiple Choice
expand_more
A) 45
B) 32
C) 25
D) 20
Answer:

A) You need to subscribe to get the answer.

Q61

The materials price variance for March is:

Multiple Choice
expand_more
A) $1,000 F
B) $1,000 U
C) $750 F
D) $750 U
Answer:

A) You need to subscribe to get the answer.

Q62

The materials quantity variance for March is:

Multiple Choice
expand_more
A) $4,500 F
B) $10,500 F
C) $10,500 U
D) $4,500 U
Answer:

A) You need to subscribe to get the answer.

Q63

The labor rate variance for March is:

Multiple Choice
expand_more
A) $480 U
B) $800 U
C) $480 F
D) $800 F
Answer:

A) You need to subscribe to get the answer.

Q64

The labor efficiency variance for March is:

Multiple Choice
expand_more
A) $5,040 U
B) $1,200 U
C) $1,200 F
D) $5,040 F
Answer:

A) You need to subscribe to get the answer.

Q65

The variable overhead spending variance for March is:

Multiple Choice
expand_more
A) $200 U
B) $600 U
C) $600 F
D) $200 F
Answer:

A) You need to subscribe to get the answer.

Q66

The variable overhead efficiency variance for March is:

Multiple Choice
expand_more
A) $1,050 F
B) $1,050 U
C) $250 F
D) $250 U
Answer:

A) You need to subscribe to get the answer.

Q67

Nell's materials price variance for June was:

Multiple Choice
expand_more
A) $3,000 favorable
B) $3,000 unfavorable
C) $2,000 favorable
D) $2,000 unfavorable
Answer:

A) You need to subscribe to get the answer.

Q68

Nell's labor efficiency variance for June was:

Multiple Choice
expand_more
A) $780 favorable
B) $780 unfavorable
C) $700 favorable
D) $700 unfavorable
Answer:

A) You need to subscribe to get the answer.

Q69

The material price variance for July was:

Multiple Choice
expand_more
A) $5,360 favorable
B) $5,360 unfavorable
C) $5,040 favorable
D) $5,040 unfavorable
Answer:

A) You need to subscribe to get the answer.

Q70

The materials quantity variance for July was:

Multiple Choice
expand_more
A) $22,960 unfavorable
B) $22,400 unfavorable
C) $9,600 unfavorable
D) $9,840 unfavorable
Answer:

A) You need to subscribe to get the answer.

Q71

The labor rate variance for July was:

Multiple Choice
expand_more
A) $3,920 unfavorable
B) $6,120 unfavorable
C) $1,120 favorable
D) $3,920 favorable
Answer:

A) You need to subscribe to get the answer.

Q72

The labor efficiency variance for July was:

Multiple Choice
expand_more
A) $6,400 favorable
B) $89,600 favorable
C) $10,320 favorable
D) $6,120 favorable
Answer:

A) You need to subscribe to get the answer.

Q73

The price variance for the direct material acquired by Jackson Industries during May
is:

Multiple Choice
expand_more
A) $21,600 favorable
B) $25,000 unfavorable
C) $28,000 favorable
D) $21,600 unfavorable
Answer:

A) You need to subscribe to get the answer.

Q74

The direct material quantity variance for May is:

Multiple Choice
expand_more
A) $7,200 unfavorable
B) $7,600 favorable
C) $5,850 unfavorable
D) $7,200 favorable
Answer:

A) You need to subscribe to get the answer.

Q75

The direct labor rate variance for May is:

Multiple Choice
expand_more
A) $8,400 favorable
B) $7,200 unfavorable
C) $8,400 unfavorable
D) $6,000 favorable
Answer:

A) You need to subscribe to get the answer.

Q76

The direct labor efficiency variance for May is:

Multiple Choice
expand_more
A) $5,850 favorable
B) $7,200 favorable
C) $6,000 unfavorable
D) $5,850 unfavorable
Answer:

A) You need to subscribe to get the answer.

Q77

The direct material price variance for November is:

Multiple Choice
expand_more
A) $16,000 favorable
B) $16,000 unfavorable
C) $14,250 favorable
D) $14,250 unfavorable
Answer:

A) You need to subscribe to get the answer.

Q78

The direct material quantity variance for November is:

Multiple Choice
expand_more
A) $14,400 unfavorable
B) $1,100 favorable
C) $17,100 unfavorable
D) $17,100 favorable
Answer:

A) You need to subscribe to get the answer.

Q79

The direct labor rate variance for November is:

Multiple Choice
expand_more
A) $2,200 favorable
B) $1,900 unfavorable
C) $2,000 unfavorable
D) $2,090 favorable
Answer:

A) You need to subscribe to get the answer.

Q80

The direct labor efficiency variance for November is:

Multiple Choice
expand_more
A) $2,200 favorable
B) $2,000 favorable
C) $2,000 unfavorable
D) $1,800 unfavorable
Answer:

A) You need to subscribe to get the answer.

Q81

The total number of units produced during April was:

Multiple Choice
expand_more
A) 8,000
B) 12,000
C) 2,000
D) 3,800
Answer:

A) You need to subscribe to get the answer.

Q82

The standard quantity of material allowed to produce one unit of product was:

Multiple Choice
expand_more
A) 1 pound
B) 4 pounds
C) 6 pounds
D) 2 pounds
Answer:

A) You need to subscribe to get the answer.

Q83

The actual material cost per pound was:

Multiple Choice
expand_more
A) $6.50
B) $6.00
C) $5.00
D) $7.20
Answer:

A) You need to subscribe to get the answer.

Q84

The actual direct labor rate per hour was:

Multiple Choice
expand_more
A) $16.00
B) $6.50
C) $8.00
D) $8.60
Answer:

A) You need to subscribe to get the answer.

Q85

The labor rate variance was:

Multiple Choice
expand_more
A) $2,280 favorable
B) $2,280 unfavorable
C) $920 favorable
D) $920 unfavorable
Answer:

A) You need to subscribe to get the answer.

Q86

What is the materials price variance for the month?

Multiple Choice
expand_more
A) $650 F
B) $550 U
C) $550 F
D) $650 U
Answer:

A) You need to subscribe to get the answer.

Q87

What is the materials quantity variance for the month?

Multiple Choice
expand_more
A) $5,820 U
B) $24,272 F
C) $5,920 U
D) $23,862 F
Answer:

A) You need to subscribe to get the answer.

Q88

During May, the materials price variance for part XBEZ52 was:

Multiple Choice
expand_more
A) $450 U
B) $450 F
C) $600 F
D) $600 U
Answer:

A) You need to subscribe to get the answer.

Q89

During May, the materials quantity variance for part XBEZ52 was:

Multiple Choice
expand_more
A) $1,450 U
B) $1,450 F
C) $4,350 F
D) $4,350 U
Answer:

A) You need to subscribe to get the answer.

Q90

What is the labor rate variance for the month?

Multiple Choice
expand_more
A) $490 F
B) $60 F
C) $60 U
D) $490 U
Answer:

A) You need to subscribe to get the answer.

Q91

What is the labor efficiency variance for the month?

Multiple Choice
expand_more
A) $8,680 U
B) $8,708 U
C) $8,218 F
D) $8,218 U
Answer:

A) You need to subscribe to get the answer.

Q92

The direct labor rate variance for the month was:

Multiple Choice
expand_more
A) $5,750 F
B) $5,750 U
C) $1,130 F
D) $1,130 U
Answer:

A) You need to subscribe to get the answer.

Q93

The direct labor efficiency variance for the month was:

Multiple Choice
expand_more
A) $420.00 U
B) $420.00 F
C) $415.80 U
D) $415.80 F
Answer:

A) You need to subscribe to get the answer.

Q94

What is the variable overhead spending variance for the month?

Multiple Choice
expand_more
A) $3,344 F
B) $720 U
C) $3,344 U
D) $720 F
Answer:

A) You need to subscribe to get the answer.

Q95

What is the variable overhead efficiency variance for the month?

Multiple Choice
expand_more
A) $576 U
B) $4,064 U
C) $3,920 U
D) $3,920 F
Answer:

A) You need to subscribe to get the answer.

Q96

The variable overhead efficiency variance for July is:

Multiple Choice
expand_more
A) $8,040 unfavorable
B) $8,040 favorable
C) $1,200 unfavorable
D) $1,200 favorable
Answer:

A) You need to subscribe to get the answer.

Q97

The standard number of machine hours allowed for July production is:

Multiple Choice
expand_more
A) 1,500 hours
B) 1,600 hours
C) 1,700 hours
D) 2,270 hours
Answer:

A) You need to subscribe to get the answer.

Q98

The standard variable overhead rate per machine setup is:

Multiple Choice
expand_more
A) $20.00
B) $21.30
C) $18.44
D) $21.00
Answer:

A) You need to subscribe to get the answer.

Q99

The variable overhead spending variance is:

Multiple Choice
expand_more
A) $1,000 favorable
B) $1,000 unfavorable
C) $3,500 unfavorable
D) $3,500 favorable
Answer:

A) You need to subscribe to get the answer.

The wait time for this operation would be:

Multiple Choice
expand_more
A) 4 hours
B) 2 hours
C) 8 hours
D) cannot be determined from information provided
Answer:

A) You need to subscribe to get the answer.

The combined inspection and move time for this operation would be:

Multiple Choice
expand_more
A) 4 hours
B) 1 hour
C) 2 hours
D) cannot be determined from information provided
Answer:

A) You need to subscribe to get the answer.

The manufacturing cycle efficiency (MCE) for this operation would be:

Multiple Choice
expand_more
A) 50%
B) 75%
C) 25%
D) 12´%
Answer:

A) You need to subscribe to get the answer.

The following standards have been established for a raw material used in the
production of product G13:
Standard quantity of the material per unit of output ....... 2.3 liters
Standard price of the material ......................................... $19.00 per liter
The following data pertain to a recent month’s operations:
Actual material purchased ......................... 5,100 liters
Actual cost of material purchased ............. $100,725
Actual material used in production ........... 4,700 liters
Actual output ............................................. 2,040 units of product G13
Required:
a. What is the materials price variance for the month?
b. What is the materials quantity variance for the month?
c. Prepare journal entries to record the purchase and use of the raw material during
the month. (All raw materials are purchased on account.)

Essay
expand_more
Answer:

You cannot see the question answer before you subscribe, please create an account and subscribe to one of our plans to get access to the answer.

The standards for product F28 call for 2.7 pounds of a raw material that costs $16.50
per pound. Last month, 4,100 pounds of the raw material were purchased for $70,520.
The actual output of the month was 1,300 units of product F28. A total of 3,500
pounds of the raw material were used to produce this output.
Required:
a. What is the materials price variance for the month?
b. What is the materials quantity variance for the month?
c. Prepare journal entries to record the purchase and use of the raw material during
the month. (All raw materials are purchased on account.)

Essay
expand_more
Answer:

You cannot see the question answer before you subscribe, please create an account and subscribe to one of our plans to get access to the answer.

The following materials standards have been established for a particular product:
Standard quantity per unit of output ............ 0.2 grams
Standard price .............................................. $18.90 per gram
The following data pertain to operations concerning the product for the last month:
Actual materials purchased .......................... 4,800 grams
Actual cost of materials purchased ............... $86,880
Actual materials used in production ............. 4,200 grams
Actual output ................................................ 21,080 units
Required:
a. What is the materials price variance for the month?
b. What is the materials quantity variance for the month?

Essay
expand_more
Answer:

You cannot see the question answer before you subscribe, please create an account and subscribe to one of our plans to get access to the answer.

The following standards have been established for a raw material used to make
product I92:
Standard quantity of the material per unit of output ... 4.5 pounds
Standard price of the material ..................................... $13.90 per pound
The following data pertain to a recent month’s operations:
Actual material purchased ...................... 2,000 pounds
Actual cost of material purchased .......... $26,200
Actual material used in production ........ 1,300 pounds
Actual output .......................................... 220 units of product I92
Required:
a. What is the materials price variance for the month?
b. What is the materials quantity variance for the month?

Essay
expand_more
Answer:

You cannot see the question answer before you subscribe, please create an account and subscribe to one of our plans to get access to the answer.

The standards for product K17 call for 5.0 meters of a raw material that costs $19.10
per meter. Last month, 2,700 meters of the raw material were purchased for $51,435.
The actual output of the month was 460 units of product K17. A total of 2,500 meters
of the raw material were used to produce this output.
Required:
a. What is the materials price variance for the month?
b. What is the materials quantity variance for the month?

Essay
expand_more
Answer:

You cannot see the question answer before you subscribe, please create an account and subscribe to one of our plans to get access to the answer.

The following direct labor standards have been established for product N30A:
Standard direct labor-hours ................ 3.3 hours per unit of N30A
Standard direct labor wage rate .......... $10.50 per hour
The following data pertain to the most recent month’s operations during which 400
units of product N30A were made:
Actual direct labor-hours worked ........ 1,100
Actual direct labor wages paid ............ $11,385
Required:
a. What was the labor rate variance for the month?
b. What was the labor efficiency variance for the month?
c. Prepare a journal entry to record direct labor costs during the month, including the
direct labor variances.

Essay
expand_more
Answer:

You cannot see the question answer before you subscribe, please create an account and subscribe to one of our plans to get access to the answer.

The standards for product Q58W specify 8.4 direct labor-hours per unit at $14.00 per
direct labor-hour. Last month 400 units of product Q58W were produced using 2,800
direct labor-hours at a total direct labor wage cost of $41,020.
Required:
a. What was the labor rate variance for the month?
b. What was the labor efficiency variance for the month?
c. Prepare a journal entry to record direct labor costs during the month, including the
direct labor variances.

Essay
expand_more
Answer:

You cannot see the question answer before you subscribe, please create an account and subscribe to one of our plans to get access to the answer.

The following labor standards have been established for a particular product:
Standard labor hours per unit of output ..... 3.2 hours
Standard labor rate ..................................... $19.10 per hour
The following data pertain to operations concerning the product for the last month:
Actual hours worked ......... 5,500 hours
Actual total labor cost ........ $105,050
Actual output ..................... 1,900 units
Required:
a. What is the labor rate variance for the month?
b. What is the labor efficiency variance for the month?

Essay
expand_more
Answer:

You cannot see the question answer before you subscribe, please create an account and subscribe to one of our plans to get access to the answer.

The following direct labor standards have been established for product S57S:
Standard direct labor-hours ....................... 1.5 hours per unit of S57S
Standard direct labor wage rate ................. $14.70 per hour
The following data pertain to last month’s operations:
Actual output of product S57S .................... 720 units
Actual direct labor-hours worked ................ 1,000
Actual direct labor wages paid .................... $14,800
Required:
a. What was the labor rate variance for the month?
b. What was the labor efficiency variance for the month?

Essay
expand_more
Answer:

You cannot see the question answer before you subscribe, please create an account and subscribe to one of our plans to get access to the answer.

The standards for product F88W specify 3.4 direct labor-hours per unit at $13.00 per
direct labor-hour. Last month 800 units of product F88W were produced using 2,500
direct labor-hours at a total direct labor wage cost of $30,500.
Required:
a. What was the labor rate variance for the month?
b. What was the labor efficiency variance for the month?

Essay
expand_more
Answer:

You cannot see the question answer before you subscribe, please create an account and subscribe to one of our plans to get access to the answer.

The following standards for variable manufacturing overhead have been established
for a company that makes only one product:
Standard hours per unit of output .............. 0.6 hours
Standard variable overhead rate ................ $17.55 per hour
The following data pertain to operations for the last month:
Actual hours ................................................ 6,200 hours
Actual total variable overhead cost ............. $110,670
Actual output ............................................... 10,200 units
Required:
a. What is the variable overhead spending variance for the month?
b. What is the variable overhead efficiency variance for the month?

Essay
expand_more
Answer:

You cannot see the question answer before you subscribe, please create an account and subscribe to one of our plans to get access to the answer.

Deschamp Corporation's variable manufacturing overhead is applied on the basis of
direct labor-hours. The company has established the following variable manufacturing
overhead standards for product O28H:
Standard direct labor-hours ..................................... 2.5 hours per unit of O28H
Standard variable manufacturing overhead rate ...... $7.70 per hour
The following data pertain to the most recent month’s operations during which 2,160
units of product O28H were made:
Actual direct labor-hours worked .................................... 5,200
Actual variable manufacturing overhead incurred .......... $44,980
Required:
a. What was the variable overhead spending variance for the month?
b. What was the variable overhead efficiency variance for the month?

Essay
expand_more
Answer:

You cannot see the question answer before you subscribe, please create an account and subscribe to one of our plans to get access to the answer.

Shawl Corporation's variable manufacturing overhead is applied on the basis of direct
labor-hours. The standard cost card for product F02E specifies 5.5 direct labor-hours
per unit of F02E. The standard variable manufacturing overhead rate is $6.80 per
direct labor-hour. During the most recent month, 1,560 units of product F02E were
made and 8,700 direct labor-hours were worked.
The actual variable manufacturing overhead incurred was $52,635.
Required:
a. What was the variable overhead spending variance for the month?
b. What was the variable overhead efficiency variance for the month?

Essay
expand_more
Answer:

You cannot see the question answer before you subscribe, please create an account and subscribe to one of our plans to get access to the answer.

Pardun Corporation's management keeps track of the time it takes to process orders.
During the most recent month, the following average times were recorded per order:
Days
Wait time ................. 15.6
Inspection time ........ 0.8
Process time ............. 1.6
Move time ................ 0.7
Queue time .............. 3.9
Required:
a. Compute the throughput time.
b. Compute the manufacturing cycle efficiency (MCE).
c. What percentage of the production time is spent in non-value-added activities?
d. Compute the delivery cycle time.

Essay
expand_more
Answer:

You cannot see the question answer before you subscribe, please create an account and subscribe to one of our plans to get access to the answer.

During the most recent month at Luinstra Corporation, queue time was 4.5 days,
inspection time was 0.8 day, process time was 1.9 days, wait time was 5.1 days, and
move time was 0.7 day.
Required:
a. Compute the throughput time.
b. Compute the manufacturing cycle efficiency (MCE).
c. What percentage of the production time is spent in non-value-added activities?
d. Compute the delivery cycle time.

Essay
expand_more
Answer:

You cannot see the question answer before you subscribe, please create an account and subscribe to one of our plans to get access to the answer.

Related Quizzes

Business
148 Questions
bookmark lock_open
Business
108 Questions
bookmark lock_open
Business
151 Questions
bookmark lock_open
Business
131 Questions
bookmark lock_open