Question 1

In using variance reports, management looks for

Accepted Answer

A)  total assets invested.
B)  significant variances.
C)  competitors' costs in comparison to the company's costs.
D)  more efficient ways of valuing inventories.E) B) and C)
F) A) and D)

Question 2

An unfavourable labour quantity variance may be caused by

Accepted Answer

A)  paying workers higher wages than expected.
B)  paying workers a bonus at year-end.
C)  worker fatigue or carelessness.
D)  higher pay rates mandated by union contracts.E) A) and B)
F) A) and C)

Question 3

Allowance for spoilage is part of the direct

Accepted Answer

A)  materials price standard.
B)  materials quantity standard.
C)  labour price standard.
D)  labour quantity standard.E) All of the above
F) None of the above

Question 4

Inventories CANNOT be valued at standard cost in financial statements.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements is FALSE?

Accepted Answer

A)  A standard cost is more accurate than a budgeted cost.
B)  A standard is a unit amount.
C)  In concept, standards and budgets are essentially the same.
D)  The standard cost of a product is equivalent to the budgeted cost per unit of product.E) B) and C)
F) C) and D)

Question 6

In designing a balanced scorecard approach for its operations, a company should

Accepted Answer

A)  seek to determine as much detail as possible from its activities.
B)  be readily available as a discussion tool between management and shareholders.
C)  attempt to link performance measures on a cause and effect basis.
D)  eliminate any financial results as these will be dealt with in.E) B) and C)
F) A) and D)

Question 7

Use the following information for questions 
Bridgeware Company has a materials price standard of $2.50 per kilogram.Four thousand kilograms of materials were purchased at $2.40 a kilogram.The actual quantity of materials used was 3,500 kilograms, although the standard quantity allowed for the output was 3,400 kilograms.
-Bridgeware Company's materials price variance is

Accepted Answer

A)  $400 U.
B)  $400 F.
C)  $350 U.
D)  $300 F.E) A) and B)
F) A) and C)

Question 8

Which of the following statements about standard costs is FALSE?

Accepted Answer

A)  Properly set standards should promote efficiency.
B)  Standard costs facilitate management planning.
C)  Standards should not be used in "management by exception."
D)  Standard costs can simplify the costing of inventories.E) C) and D)
F) A) and B)

Question 9

If actual costs are less than standard costs, the variance is favourable.

Accepted Answer

A) True 
 B)False

Question 10

The matrix approach to variance analysis

Accepted Answer

A)  will yield slightly different variances than the formula approach.
B)  is more accurate than the formula approach.
C)  does not separate the price and quantity variance calculations.
D)  provides a convenient structure for determining each variance.E) A) and C)
F) A) and B)

Question 11

Standard cost is the industry average cost for a particular item.

Accepted Answer

A) True 
 B)False

Question 12

A standard cost system may be used with

Accepted Answer

A)  job order costing only.
B)  process costing only.
C)  activity-based costing.
D)  either job order or process costing.E) C) and D)
F) All of the above

Question 13

A favourable variance

Accepted Answer

A)  is an indication that the company is not operating in an optimal manner.
B)  implies a positive result if quality control standards are met.
C)  implies a positive result if standards are flexible.
D)  means that standards are too loosely specified.E) A) and B)
F) All of the above

Question 14

The formula for the materials price variance is

Accepted Answer

A)  (AQ × SP) - (SQ × SP) .
B)  (AQ × AP) - (AQ × SP) .
C)  (AQ × AP) - (SQ × SP) .
D)  (AQ × SP) - (SQ × AP) .E) B) and C)
F) A) and B)

Question 15

The difference between fixed overhead budgeted and overhead applied is the

Accepted Answer

A)  budget variance.
B)  spending variance.
C)  total overhead variance.
D)  volume variance.E) A) and D)
F) C) and D)

Question 16

Labour efficiency is measured by the

Accepted Answer

A)  materials quantity variance.
B)  total labour variance.
C)  labour quantity variance.
D)  labour rate variance.E) A) and B)
F) A) and D)

Question 17

If standard cost reports emphasize meeting predetermined standards

Accepted Answer

A)  there should be non-financial performance measures available to management to supplement the cost reports.
B)  management can control the department properly with standard cost reports.
C)  the budget process should be sufficient to support management's performance.
D)  all members of the team will be able to properly identify critical variance issues.E) B) and D)
F) B) and C)

Question 18

The direct labour quantity standard is sometimes called the direct labour

Accepted Answer

A)  volume standard.
B)  effectiveness standard.
C)  efficiency standard.
D)  quality standard.E) B) and D)
F) None of the above

Question 19

Use the following information for questions 
Bridgeware Company has a materials price standard of $2.50 per kilogram.Four thousand kilograms of materials were purchased at $2.40 a kilogram.The actual quantity of materials used was 3,500 kilograms, although the standard quantity allowed for the output was 3,400 kilograms.
-Bridgeware Company's total materials variance is

Accepted Answer

A)  $1,100 U.
B)  $1,500 U.
C)  $1,250 U.
D)  $100 F.E) B) and D)
F) All of the above

Question 20

A direct labour price standard is frequently called the direct labour efficiency standard.

Accepted Answer

A) True 
 B)False

Exam 12: Standard Costs and Balanced Scorecard

A direct labour price standard is frequently called the direct labour efficiency standard.

Correct Answer
verified

Labour efficiency is measured by the

Correct Answer
verified

Correct Answer
verified

If actual costs are less than standard costs, the variance is favourable.

Correct Answer
verified

Standard cost is the industry average cost for a particular item.

Correct Answer
verified

In using variance reports, management looks for

Correct Answer
verified

Correct Answer
verified

A favourable variance

Correct Answer
verified

The difference between fixed overhead budgeted and overhead applied is the

Correct Answer
verified

Allowance for spoilage is part of the direct

Correct Answer
verified

Inventories CANNOT be valued at standard cost in financial statements.

Correct Answer
verified

An unfavourable labour quantity variance may be caused by

Correct Answer
verified

Which of the following statements is FALSE?

Correct Answer
verified

If standard cost reports emphasize meeting predetermined standards

Correct Answer
verified

A standard cost system may be used with

Correct Answer
verified

The direct labour quantity standard is sometimes called the direct labour

Correct Answer
verified

The formula for the materials price variance is

Correct Answer
verified

In designing a balanced scorecard approach for its operations, a company should

Correct Answer
verified

Which of the following statements about standard costs is FALSE?

Correct Answer
verified

The matrix approach to variance analysis

Correct Answer
verified

Exam 12: Standard Costs and Balanced Scorecard

A direct labour price standard is frequently called the direct labour efficiency standard.

Correct AnswerverifiedShow Answer

Labour efficiency is measured by the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If actual costs are less than standard costs, the variance is favourable.

Correct AnswerverifiedShow Answer

Standard cost is the industry average cost for a particular item.

Correct AnswerverifiedShow Answer

In using variance reports, management looks for

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A favourable variance

Correct AnswerverifiedShow Answer

The difference between fixed overhead budgeted and overhead applied is the

Correct AnswerverifiedShow Answer

Allowance for spoilage is part of the direct

Correct AnswerverifiedShow Answer

Inventories CANNOT be valued at standard cost in financial statements.

Correct AnswerverifiedShow Answer

An unfavourable labour quantity variance may be caused by

Correct AnswerverifiedShow Answer

Which of the following statements is FALSE?

Correct AnswerverifiedShow Answer

If standard cost reports emphasize meeting predetermined standards

Correct AnswerverifiedShow Answer

A standard cost system may be used with

Correct AnswerverifiedShow Answer

The direct labour quantity standard is sometimes called the direct labour

Correct AnswerverifiedShow Answer

The formula for the materials price variance is

Correct AnswerverifiedShow Answer

In designing a balanced scorecard approach for its operations, a company should

Correct AnswerverifiedShow Answer

Which of the following statements about standard costs is FALSE?

Correct AnswerverifiedShow Answer

The matrix approach to variance analysis

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified