The standard cost card contains quantities and costs for _______. (Points: 1) di

Question

The standard cost card contains quantities and costs for _______. (Points: 1)
direct material only
direct labor only
direct material and direct labor only
direct material, direct labor, and overhead


2. A total variance is best defined as the difference between total _______. (Points: 1)
actual cost and total cost applied for the standard output of the period
standard cost and total cost applied to production
actual cost and total standard cost of the actual input of the period
actual cost and total cost applied for the actual output of the period


3. The term standard hours allowed measures _______. (Points: 1)
budgeted output at actual hours
budgeted output at standard hours
actual output at standard hours
actual output at actual hours


4. Which of the following factors should not be considered when deciding whether to investigate a variance? (Points: 1)
magnitude of the variance
trend of the variances over time
likelihood that an investigation will reduce or eliminate future occurrences of the variance
whether the variance is favorable or unfavorable


5. A company wishing to isolate variances at the point closest to the point of responsibility will determine its material price variance when ______. (Points: 1)
material is purchased
material is issued to production
material is used in production
production is completed


6. The standard predominantly used in Western cultures for motivational purposes is a(n) ____ standard. (Points: 1)
expected annual
ideal
practical
theoretical


7. Gallagher Corporation. incurred 2,300 direct labor hours to produce 600 units of product. Each unit should take 4 direct labor hours. Gallagher Corporation applies variable overhead to production on a direct labor hour basis. The variable overhead efficiency variance _______. (Points: 1)
will be unfavorable
will be favorable
will depend upon the capacity measure selected to assign overhead to production
is impossible to determine without additional information


8. A variable overhead spending variance is caused by ________. (Points: 1)
using more or fewer actual hours than the standard hours allowed for the production achieved
paying a higher/lower average actual overhead price per unit of the activity base than the standard price allowed per unit of the activity base
larger/smaller waste and shrinkage associated with the resources involved than expected
both b and c are causes


9. McCoy Company has the following information available for October when 3,500 units were produced (round answers to the nearest dollar).

Standards:


Material
3.5 pounds per unit @ $4.50 per pound

Labor
5.0 hours per unit @ $10.25 per hour




Actual:


Material purchased
12,300 pounds @ $4.25

Material used
11,750 pounds

17,300 direct labor hours @ $10.20 per hour




What is the labor rate variance? (Points: 1)
$875 F
$865 F
$865 U
$875 U


10. McCoy Company has the following information available for October when 3,500 units were produced (round answers to the nearest dollar).

Standards:


Material
3.5 pounds per unit @ $4.50 per pound

Labor
5.0 hours per unit @ $10.25 per hour




Actual:


Material purchased
12,300 pounds @ $4.25

Material used
11,750 pounds

17,300 direct labor hours @ $10.20 per hour




What is the labor efficiency variance? (Points: 1)
$2,050 F
$2,050 U
$2,040 U
$2,040 F


11. Joint costs are useful for _______. (Points: 1)
setting the selling price of a product
determining whether to continue producing an item
evaluating management by means of a responsibility reporting system
determining inventory cost for accounting purposes


12. Each of the following is a method to allocate joint costs except _______. (Points: 1)
relative sales value
relative net realizable value
relative weight, volume, or linear measure
average unit cost


13. When allocating joint process cost based on tons of output, all products will _______. (Points: 1)
be salable at split-off
have the same joint cost per ton
have a sales value greater than their costs
have no disposal costs at the split-off point


14. Scrap is defined as a _______. (Points: 1)
finished unit of product that has no sales value
residual of the production process that has limited sales value
residual of the production process that can be reworked for sale as an irregular unit of product
residual of the production process that has no sales value


15. Waste created by a production process is _______. (Points: 1)
accounted for in the same manner as defective units
accounted for as an abnormal loss
material that can be sold as an irregular product
discarded rather than sold


16. In a lumber mill, which of the following would most likely be considered a primary product? (Points: 1)
2 x 4 studs
sawdust
wood chips
tree bark


17. Fisher Company produces three products from a joint process. The products can be sold at split-off or processed further. In deciding whether to sell at split-off or process further, management should _______. (Points: 1)
allocate the joint cost to the products based on relative sales value prior to making the decision
allocate the joint cost to the products based on a physical quantity measure prior to making the decision
subtract the joint cost from the total sales value of the products before determining relative sales value and making the decision
ignore the joint cost in making the decision


18. The split-off point is the point at which _______. (Points: 1)
output is first identifiable as individual products
joint costs are allocated to joint products
some products may first be sold
all of the above


19. A product may be processed beyond the split-off point if management believes that _______. (Points: 1)
its marketability will be enhanced
the incremental cost of further processing will be less than the incremental revenue of further processing
the joint cost assigned to it is not already greater than its prospective selling price
both a and b


20. Which of the following is a commonly used joint cost allocation method? (Points: 1)
high-low method
regression analysis
approximated sales value at split-off method
weighted average quantity technique

Explanation / Answer

1. The standard cost card contains quantities and costs for direct material, direct labor, and overhead . 2. A total variance is best defined as the difference between total actual cost and total cost applied for the actual output of the period. 3. The term standard hours allowed measures actual output as standard hours. 4. whether the variance is favorable or unfavorable.
5. A company wishing to isolate variances at the point closest to the point of responsibility will determine its material price variance when material is purchased.
6. The standard predominantly used in Western cultures for motivational purposes is a(n) practical standard. 7. Gallagher Corporation. incurred 2,300 direct labor hours to produce 600 units of product. Each unit should take 4 direct labor hours. Gallagher Corporation applies variable overhead to production on a direct labor hour basis. The variable overhead efficiency variance will be favorable. 8. A variable overhead spending variance is caused by both b and c are causes.
9. Labor rate variance = (Actual price - Standard price)*actual quantity Labor rate variance = (10.20 - 10.25)*17,300 Labor rate variance = $865F

10. Labor efficiency variance = (Actual quantity - standard quantity)*standard price

Labor efficiency variance = (17,300 - 3,500*5)*10.25

Labor efficiency variance = (17,300 - 17,500)*10.25

Labor efficiency variance = $2,050F


11. Joint costs are useful for determining inventory cost for accounting purposes.

12. Each of the following is a method to allocate joint costs except average unit cost

13. When allocating joint process cost based on tons of output, all products will have the same joint cost per ton
14. Scrap is defined as a residual of the production process that has limited sales value

15. Waste created by a production process is discarded rather than sold.

16. 2 x 4 studs is most likely to be considered a primary product.

17. Fisher Company produces three products from a joint process. The products can be sold at split-off or processed further. In deciding whether to sell at split-off or process further, management should ignore the joint cost in making the decision.

18. all of the above.

19. A product may be processed beyond the split-off point if management believes that both a and b.

20. approximated sales value at split-off method is commonly used joint cost allocation method.



3. The term standard hours allowed measures actual output as standard hours. 4. whether the variance is favorable or unfavorable.
5. A company wishing to isolate variances at the point closest to the point of responsibility will determine its material price variance when material is purchased.
6. The standard predominantly used in Western cultures for motivational purposes is a(n) practical standard. 7. Gallagher Corporation. incurred 2,300 direct labor hours to produce 600 units of product. Each unit should take 4 direct labor hours. Gallagher Corporation applies variable overhead to production on a direct labor hour basis. The variable overhead efficiency variance will be favorable. 8. A variable overhead spending variance is caused by both b and c are causes.
9. Labor rate variance = (Actual price - Standard price)*actual quantity Labor rate variance = (10.20 - 10.25)*17,300 Labor rate variance = $865F

10. Labor efficiency variance = (Actual quantity - standard quantity)*standard price

Labor efficiency variance = (17,300 - 3,500*5)*10.25

Labor efficiency variance = (17,300 - 17,500)*10.25

Labor efficiency variance = $2,050F


11. Joint costs are useful for determining inventory cost for accounting purposes.

12. Each of the following is a method to allocate joint costs except average unit cost

13. When allocating joint process cost based on tons of output, all products will have the same joint cost per ton
14. Scrap is defined as a residual of the production process that has limited sales value

15. Waste created by a production process is discarded rather than sold.

16. 2 x 4 studs is most likely to be considered a primary product.

17. Fisher Company produces three products from a joint process. The products can be sold at split-off or processed further. In deciding whether to sell at split-off or process further, management should ignore the joint cost in making the decision.

18. all of the above.

19. A product may be processed beyond the split-off point if management believes that both a and b.

20. approximated sales value at split-off method is commonly used joint cost allocation method.


A company wishing to isolate variances at the point closest to the point of responsibility will determine its material price variance when material is purchased.
6. The standard predominantly used in Western cultures for motivational purposes is a(n) practical standard. 7. Gallagher Corporation. incurred 2,300 direct labor hours to produce 600 units of product. Each unit should take 4 direct labor hours. Gallagher Corporation applies variable overhead to production on a direct labor hour basis. The variable overhead efficiency variance will be favorable. 6. The standard predominantly used in Western cultures for motivational purposes is a(n) practical standard. 7. Gallagher Corporation. incurred 2,300 direct labor hours to produce 600 units of product. Each unit should take 4 direct labor hours. Gallagher Corporation applies variable overhead to production on a direct labor hour basis. The variable overhead efficiency variance will be favorable. 7. Gallagher Corporation. incurred 2,300 direct labor hours to produce 600 units of product. Each unit should take 4 direct labor hours. Gallagher Corporation applies variable overhead to production on a direct labor hour basis. The variable overhead efficiency variance will be favorable. 8. A variable overhead spending variance is caused by both b and c are causes.
9. Labor rate variance = (Actual price - Standard price)*actual quantity Labor rate variance = (10.20 - 10.25)*17,300 Labor rate variance = $865F

10. Labor efficiency variance = (Actual quantity - standard quantity)*standard price

Labor efficiency variance = (17,300 - 3,500*5)*10.25

Labor efficiency variance = (17,300 - 17,500)*10.25

Labor efficiency variance = $2,050F


11. Joint costs are useful for determining inventory cost for accounting purposes.

12. Each of the following is a method to allocate joint costs except average unit cost

13. When allocating joint process cost based on tons of output, all products will have the same joint cost per ton
14. Scrap is defined as a residual of the production process that has limited sales value

15. Waste created by a production process is discarded rather than sold.

16. 2 x 4 studs is most likely to be considered a primary product.

17. Fisher Company produces three products from a joint process. The products can be sold at split-off or processed further. In deciding whether to sell at split-off or process further, management should ignore the joint cost in making the decision.

18. all of the above.

19. A product may be processed beyond the split-off point if management believes that both a and b.

20. approximated sales value at split-off method is commonly used joint cost allocation method.


8. A variable overhead spending variance is caused by both b and c are causes.
9. Labor rate variance = (Actual price - Standard price)*actual quantity Labor rate variance = (10.20 - 10.25)*17,300 Labor rate variance = $865F

10. Labor efficiency variance = (Actual quantity - standard quantity)*standard price

Labor efficiency variance = (17,300 - 3,500*5)*10.25

Labor efficiency variance = (17,300 - 17,500)*10.25

Labor efficiency variance = $2,050F


11. Joint costs are useful for determining inventory cost for accounting purposes.

12. Each of the following is a method to allocate joint costs except average unit cost

13. When allocating joint process cost based on tons of output, all products will have the same joint cost per ton
14. Scrap is defined as a residual of the production process that has limited sales value

15. Waste created by a production process is discarded rather than sold.

16. 2 x 4 studs is most likely to be considered a primary product.

17. Fisher Company produces three products from a joint process. The products can be sold at split-off or processed further. In deciding whether to sell at split-off or process further, management should ignore the joint cost in making the decision.

18. all of the above.

19. A product may be processed beyond the split-off point if management believes that both a and b.

20. approximated sales value at split-off method is commonly used joint cost allocation method.

have the same joint cost per ton

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