HEAL TAKE HOME QUIZ #5 CHAPTER 10 Using capital letters, please wnite the correc
ID: 2579179 • Letter: H
Question
HEAL TAKE HOME QUIZ #5 CHAPTER 10 Using capital letters, please wnite the correct answer on the blank to the left of each question. Each question is worth one (1) point for a total of twenty (20) points. The exam is due at the beginning of class on 11/27/17 Which of the following statements is true? A) Budgets set standards that are used to control and evaluate managerial B) The quantity decision is the amount that should be paid for the quantity of C) The pricing decision is the amount of input that should be used per unit of D) The standard cost per unit equals the quantity standard plus the price performance the input to be used. output. standard 2. Which statement below is FALSE? A) Labor rates are largely determined by external forces such as labor markets and union contracts B) Departures of actual rates from standard labor rates are rare, and variances are usually due to unexpected overtime or the use of higher paid employees for less skilled tasks. C) The use of labor is controllable by the production manager D) Whether or not the labor variance is significant, an investigation is still needed to find out the causes for the variance. E) The labor rate variance computes the difference between what was paid to direct laborers and what should have been paid. 3. Southern Company is manufacturing 5,000 units for the period. The following are actual and standard direct materials information: Standard Costs: 1.5 pounds per unit; purchase price is $0.78 per pound Actual Costs: 8,000 pounds purchased and used; purchase price is $0.75 per pound Based on this information, the materials price variance is: A) $240 favorable. B) $240 unfavorable. C) $390 favorable. D) $390 unfavorable. E) $150 favorable.Explanation / Answer
As per policy, only four parts of a question is allowed to answer, so answering 1 to 9 :
1. D) The standard cost per unit equals the quantity standard plus the price standard.
2. E) The labor rate variance computes the difference between what was paid to direct laborers and what should have been paid. ( because it is difference between the what is paid and what would be the payment as per standard rate)
3. The MPV = (actual material price – standard material price) * actual material usage = (0.75 – 0.78) * 8000 = (A) $240 favorable
4. The MUV = (material required for the actual output – Actual material units) * Standard material price
= (5000*1.5 – 8000) $0.78 = (7500 – 8000) $0.78 = (B) $390 unfavorable
5. (C) Manufacturing overhead budget (because direct material is not counted in M. Overhead budget)
6. No getting the options, sorry
7. (C) The purchasing agent (because he/she is exploring and negotiating the material price)
8. (A) For, labor, the price variance is usually called an efficiency variance. (because price variance is usually called the Rate variance)
9. (A) True (because standard costing is implemented and quantity standards of each item and price / rate are fixed to reach out to the expected cost of the product)
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