Which of the following types of standards can be achieved only under perfect conditions?
A. Easily attainable standard
B. Ideal standard
C. Currently attainable standard
D. Tight but attainable standard
B. ideal standard
To foster continuous improvement, standards should in difficulty over time.
A. remain stable
B. increase
C. decrease
D. idealize
B. increase
Standard cost systems depend on which two types of standards?
A. quantity and price
B. quantity and efficiency
C. rate and price
D. rate and spending
A. quantity and price
The standard costs are summarized on a:
A. static cost card.
B. flexible budget card.
C. standard cost card.
D. standard static card
C. standard cost card.
A quantity standard is
A. the total dollar amount that a company expects to spend to achieve a given level of output.
B. a form that shows what the company should spend to make a single unit of product.
C. the price that should be paid for a specific quan
D. the amount of input that should be used in each unit of product or service.
The standard labor rate is
A. the expected hourly cost of labor, excluding employee taxes and benefits.
B. the expected hourly cost of labor, including employee taxes and benefits.
C. the amount of time that workers should take to produce a single unit of
B. the expected hourly cost of labor, including employee taxes and benefits.
A master budget is an example of a
A. static budget.
B. flexible budget.
C. standard cost card.
D. volume variance.
A. static budget.
Delaware Corp. prepared a master budget that included $21,360 for direct materials, $33,600 for direct labor, $18,000 for variable overhead, and $46,440 for fixed overhead. Delaware Corp. planned to sell 4,000 units during the period, but actually sold 4,
C. $22,962
Delaware Corp. prepared a master budget that included $21,360 for direct materials, $33,600 for direct labor, $18,000 for variable overhead, and $46,440 for fixed overhead. Delaware Corp. planned to sell 4,000 units during the period, but actually sold 4,
D. $36,120
Delaware Corp. prepared a master budget that included $21,360 for direct materials, $33,600 for direct labor, $18,000 for variable overhead, and $46,440 for fixed overhead. Delaware Corp. planned to sell 4,000 units during the period, but actually sold 4,
C. $19,350
Delaware Corp. prepared a master budget that included $21,360 for direct materials, $33,600 for direct labor, $18,000 for variable overhead, and $46,440 for fixed overhead. Delaware Corp. planned to sell 4,000 units during the period, but actually sold 4,
B. $46,440
Delaware Corp. prepared a master budget that included $21,360 for direct materials, $33,600 for direct labor, $18,000 for variable overhead, and $46,440 for fixed overhead. Delaware Corp. planned to sell 4,000 units during the period, but actually sold 4,
C. $124,872
After selling 4,300 units during the period, Dole Corp. prepared a flexible budget that included $22,962 for direct materials, $36,120 for direct labor, $19,350 for variable overhead, and $46,440 for fixed overhead. Dole originally planned its master budg
B. $119,400
Comparing the master budget with the flexible budget creates a
A. quantity variance.
B. volume variance.
C. spending variance.
D. price variance.
B. volume variance.
A spending variance is made up of
A. volume variance and quantity variance.
B. price variance and volume variance.
C. price variance and quantity variance.
D. price variance and rate variance.
C. price variance and quantity
The formula AQ � (SP - AP) is the
A. direct materials spending variance.
B. direct materials volume variance.
C. direct materials price variance.
D. direct materials quantity variance.
C. direct materials price variance.
The formula SP � (SQ - AQ) is the
A. direct materials spending variance.
B. direct materials volume variance.
C. direct materials price variance.
D. direct materials quantity variance.
D. direct materials quantity variance.
The difference between the actual price and the standard price, multiplied by the actual quantity of materials purchased is the
A. direct materials spending variance.
B. direct materials volume variance.
C. direct materials price variance.
D. direct mater
C. direct materials price variance.
The difference between the actual quantity and the standard quantity, multiplied by the standard price is the
A. direct materials spending variance.
B. direct materials volume variance.
C. direct materials price variance.
D. direct materials quantity vari
D. direct materials quantity variance.
Exeter has a material standard of 1 pound per unit of output. Each pound has a standard price of $26 per pound. During July, Exeter paid $66,100 for 2,475 pounds, which they used to produce 2,350 units. What is the direct materials price variance?
A. $1,7
A. $1,750 unfavorable
Exeter has a material standard of 1 pound per unit of output. Each pound has a standard price of $26 per pound. During July, Exeter paid $66,100 for 2,475 pounds, which they used to produce 2,350 units. What is the direct materials quantity variance?
A. $
C. $3,250 unfavorable
Oxford Co. has a material standard of 2.1 pounds per unit of output. Each pound has a standard price of
$10 per pound. During February, Oxford Co. paid $57,220 for 4,840 pounds, which were used to produce 2,400 units. What is the direct materials price va
B. $8,820 unfavorable
Oxford Co. has a material standard of 2.1 pounds per unit of output. Each pound has a standard price of
$10 per pound. During February, Oxford Co. paid $57,220 for 4,840 pounds, which were used to produce 2,400 units. What is the direct materials quantity
B. $2,000 favorable
Cooper Company has a direct material standard of 2 gallons of input at a cost of $7.50 per gallon. During July, Cooper Company purchased and used 13,000 gallons, paying $93,200. The direct materials quantity variance was $1,500 unfavorable. How many units
D. 6,400 units
Scarlett Company has a direct material standard of 3 gallons of input at a cost of $5 per gallon. During July, Scarlett Company purchased and used 7,500 gallons. The direct materials quantity variance was
$750 unfavorable and the direct materials price va
A. 2,450 units
Scarlett Company has a direct material standard of 3 gallons of input at a cost of $5 per gallon. During July, Scarlett Company purchased and used 7,500 gallons. The direct material quantity variance was $750 unfavorable and the direct material price vari
C. $4.60
The formula AH � (SR - AR) is the
A. direct labor spending variance.
B. direct labor volume variance.
C. direct labor rate variance.
D. direct labor efficiency variance.
C. direct labor rate variance.
The formula SR � (SH - AH) is the
A. direct labor spending variance.
B. direct labor volume variance.
C. direct labor rate variance.
D. direct labor efficiency variance.
D. direct labor efficiency variance
The difference between the actual labor rate and the standard labor rate, multiplied by the actual labor hours is the
A. direct labor spending variance.
B. direct labor volume variance.
C. direct labor rate variance.
D. direct labor efficiency variance.
C. direct labor rate variance.
The difference between the actual labor hours and the standard labor hours, multiplied by the standard labor rate is the
A. direct labor spending variance.
B. direct labor volume variance.
C. direct labor rate variance.
D. direct labor efficiency variance
D. direct labor efficiency variance.
Whitman has a direct labor standard of 2 hours per unit of output. Each employee has a standard wage rate of $22.50 per hour. During July, Whitman paid $94,750 to employees for 4,445 hours worked. 2,350 units were produced during July. What is the flexibl
A. $105,750
Madrid Co. has a direct labor standard of 4 hours per unit of output. Each employee has a standard wage rate of $11 per hour. During February, Madrid Co. paid $99,500 to employees for 9,150 hours worked. 2,400 units were produced during February. What is
D. $105,600
Whitman has a direct labor standard of 2 hours per unit of output. Each employee has a standard wage rate of $22.50 per hour. During July, Whitman paid $94,750 to employees for 4,445 hours worked. 2,350 units were produced during July. What is the direct
C. $5,262.50 favorable
Whitman has a direct labor standard of 2 hours per unit of output. Each employee has a standard wage rate of $22.50 per hour. During July, Whitman paid $94,750 to employees for 4,445 hours worked. 2,350 units were produced during July. What is the direct
B. $5,737.50 favorable
Madrid Co. has a direct labor standard of 4 hours per unit of output. Each employee has a standard wage rate of $11 per hour. During February, Madrid Co. paid $99,500 to employees for 9,150 hours worked. 2,400 units were produced during February. What is
A. $1,150 favorable
Madrid Co. has a direct labor standard of 4 hours per unit of output. Each employee has a standard wage rate of $11 per hour. During February, Madrid Co. paid $99,500 to employees for 9,150 hours worked. 2,400 units were produced during February. What is
B. $4,950 favorable
Swan Company has a direct labor standard of 15 hours per unit of output. Each employee has a standard wage rate of $14 per hour. During March, employees worked 13,100 hours. The direct labor rate variance was $9,170 favorable, the direct labor efficiency
D. 800 units
Swan Company has a direct labor standard of 15 hours per unit of output. Each employee has a standard wage rate of $14 per hour. During March, employees worked 13,100 hours. The direct labor rate variance was $9,170 favorable, the direct labor efficiency
C. $174,230
The overall difference between the actual and applied manufacturing overhead is the
A. over- or underapplied overhead.
B. overhead rate variance.
C. overhead efficiency variance.
D. overhead volume variance
A. over- or underapplied overhead.
The difference between the actual variable overhead rate and the standard variable overhead rate, multiplied by the actual amount of the cost driver, is the
A. variable overhead rate variance.
B. variable overhead efficiency variance.
C. variable overhead
A. variable overhead rate variance.
The difference between the actual cost driver amount and the standard cost driver amount, multiplied by the standard variable overhead rate is the
A. variable overhead rate variance.
B. variable overhead efficiency variance.
C. variable overhead volume va
B. variable overhead efficiency variance
Raven applies overhead based on direct labor hours. The variable overhead standard is 2 hours at $11 per hour. During July, Raven spent $116,700 for variable overhead. 8,890 labor hours were used to produce 4,700 units. How much is variable overhead on th
C. $103,400
Jupiter Co. applies overhead based on direct labor hours. The variable overhead standard is 4 hours at $12 per hour. During February, Jupiter Co. spent $113,400 for variable overhead. 9,150 labor hours were used to produce 2,400 units. How much is variabl
D. $115,200
Raven applies overhead based on direct labor hours. The variable overhead standard is 2 hours at $11 per hour. During July, Raven spent $116,700 for variable overhead. 8,890 labor hours were used to produce 4,700 units. What is the variable overhead rate
C. $18,910 unfavorable
Raven applies overhead based on direct labor hours. The variable overhead standard is 2 hours at $11 per hour. During July, Raven spent $116,700 for variable overhead. 8,890 labor hours were used to produce 4,700 units. What is the variable overhead effic
A. $5,610 favorable
Jupiter Co. applies overhead based on direct labor hours. The variable overhead standard is 4 hours at $12 per hour. During February, Jupiter Co. spent $113,400 for variable overhead. 9,150 labor hours were used to produce 2,400 units. What is the variabl
A. $3,600 unfavorable
67. Jupiter Co. applies overhead based on direct labor hours. The variable overhead standard is 4 hours at $12 per hour. During February, Jupiter Co. spent $113,400 for variable overhead. 9,150 labor hours were used to produce 2,400 units. What is the var
C. $5,400 favorable
Jupiter Co. applies overhead based on direct labor hours. The variable overhead standard is 4 hours at $12 per hour. During February, Jupiter Co. spent $113,400 for variable overhead. 9,150 labor hours were used to produce 2,400 units. What is the over- o
D. $1,800 overapplied
Venus Company applies overhead based on direct labor hours. The variable overhead standard is 10 hours at $3.50 per hour. During October, Venus Company spent $157,600 for variable overhead. 47,440 labor hours were used to produce 4,800 units. What is the
A. $10,400 overapplied
Venus Company applies overhead based on direct labor hours. The variable overhead standard is 10 hours at $3.50 per hour. During October, Venus Company spent $157,600 for variable overhead. 47,440 labor hours were used to produce 4,800 units. What is the
A. $8,440 favorable
Venus Company applies overhead based on direct labor hours. The variable overhead standard is 10 hours at $3.50 per hour. During October, Venus Company spent $157,600 for variable overhead. 47,440 labor hours were used to produce 4,800 units. What is the
B. $1,960 favorable
Bonnie Company has a direct labor standard of 15 hours per unit of output. Each employee has a standard wage rate of $14 per hour. The standard variable overhead rate is $10 per hour. During March, employees worked 13,100 hours. The direct labor rate vari
B. $11,000 unfavorable
Bonnie Company has a direct labor standard of 15 hours per unit of output. Each employee has a standard wage rate of $14 per hour. The standard variable overhead rate is $10 per hour. During March, employees worked 13,100 hours. The direct labor rate vari
C. $144,100
The difference between the actual fixed manufacturing overhead cost and the budgeted fixed manufacturing overhead cost is the
A. fixed overhead spending variance.
B. fixed overhead volume variance.
C. fixed overhead rate variance.
D. fixed overhead effici
A. fixed overhead spending
The fixed overhead volume variance is the difference between
A. Actual fixed overhead and budgeted fixed overhead.
B. Actual fixed overhead and applied fixed overhead.
C. Applied fixed overhead and budgeted fixed overhead.
D. Actual fixed overhead and the
C. Applied fixed overhead and budgeted fixed overhead.
The difference between the actual volume and the budgeted volume, multiplied by the fixed overhead rate based on budgeted volume, is the
A. fixed overhead spending variance.
B. fixed overhead price variance.
C. fixed overhead efficiency variance.
D. fixed
D. fixed overhead volume variance.
A fixed overhead rate based on highlights for management attention the cost of unutilized capacity.
A. budgeted production
B. practical capacity
C. utilized capacity
D. actual production
B. practical capacity
The difference between budgeted volume and practical capacity, multiplied by the fixed overhead rate, is the
A. Expected (planned) capacity variance.
B. Unexpected (unplanned) capacity variance.
C. Total capacity variance.
D. Volume variance.
A. Expected (planned) capacity variance
The difference betwee actual volume and budgeted production, multiplied by the fixed overhead rate based on practical capacity, is the
A. Expected (planned) capacity variance.
B. Unexpected (unplanned) capacity variance.
C. Total capacity variance.
D. Vol
B. Unexpected (unplanned) capacity variance
The difference between budgeted volume and practical capacity, multiplied by the fixed overhead rate, is the
A. Expected (planned) capacity variance.
B. Unexpected (unplanned) capacity variance.
C. Total capacity variance.
D. Volume variance.
C. Total capacity variance.
In a standard cost system, an unfavorable variance will appear as
A. a credit entry.
B. a debit entry.
C. either a debit or a credit entry.
D. variances do not affect journal entries.
B. a debit entry.
In a standard cost system, a favorable variance will appear as
A. a credit entry.
B. a debit entry.
C. either a debit or a credit entry.
D. variances do not affect journal entries.
A. a credit entry.
In a standard cost system, the initial debit to an inventory account is based on
A. standard cost rather than actual cost.
B. actual cost rather than standard cost.
C. actual cost less the standard cost.
D. standard cost less the actual cost.
A. standard cost rather than actual cost
At the end of the accounting period, all variances are closed to the account.
A. Work in Process
B. Finished Goods
C. Cost of Goods Manufactured
D. Cost of Goods Sold
D. Cost of Goods Sold
Melrose Inc. uses standard costing. Last period, it spent $145,000 for labor. The direct labor rate variance was $5,000 favorable, and the direct labor efficiency variance was $6,000 unfavorable. In the journal entry to record the use of direct labor, the
A. $144,000
Melrose Inc. uses standard costing. Last period, its flexible budget for labor was $144,000. The direct labor rate variance was $5,000 favorable, and the direct labor efficiency variance was $6,000
unfavorable. In the journal entry to record the use of di
B. $145,000
Tulip Inc. uses standard costing, and its manufacturing standards are as follows: 2 pounds of materials at $13 per pound, and 3 hours of labor at $10 per hour. Budgeted production last period was 5,000 units, and actual production was 4,800 units. Last pe
A. Option A
99. Tulip Inc. uses standard costing, and its manufacturing standards are as follows: 2 pounds of materials at
$13 per pound, and 3 hours of labor at $10 per hour. Budgeted production last period was 5,000 units, and actual production was 4,800 units. Las
B. option B
Tulip Inc. uses standard costing, and its manufacturing standards are as follows: 2 pounds of materials at
$13 per pound, and 3 hours of labor at $10 per hour. Budgeted production last period was 5,000 units, and actual production was 4,800 units. Last pe
C. option C