acc exam 3 concept questions ch.10

The same basic formulas used for materials and labor are used to analyze ______ portion of manufacturing overhead. a. the variable b. neither the variable nor fixed c. the fixed d. both the variable and fixed

the variable

The standard hours per unit includes both direct and indirect labor hours. a. True b. False

false

The terms price and quantity are used when computing direct ________ variance, while the terms rate and hours are used when computing direct _________ variances.

material; labor

The difference between actual results and the flexible budget amount is a(n) ________ variance.

spending

Material requirements plus an allowance for normal inefficiencies are added together to determine the __________ _________ of a direct material per unit of output.

standard quantity

The standard price of materials is $3.50 per pound and the standard quantity allowed for actual output is 7,000 pounds. If the actual quantity purchased and used was 6,700 pounds, and the actual price per pound was $3.40, the direct materials price variance is $ __________ ___________

670 F

Which of the following are used to calculate the standard quantity per unit of direct materials? -Freight and transportation costs -Direct materials requirements per unit of finished product -Allowance for waste and spoilage

-Direct materials requirements per unit of finished product -Allowance for waste and spoilage

A planning budget called for 500 units to be produced and total direct labor cost of $7,500. Actual production was 600 units and actual direct labor cost was $9,300. The spending variance is: a. $300 F b. $1,800 U c. $1,500 U d. $300 U e. $1,500 F

$300 U Reason: $7,500 ÷ 500 = $15 standard rate per unit × 600 = $9,000 flexible budget - $9,300 actual = $300 U

Use the following information to calculate the labor rate variance for Adkinson Company. Actual hours used 5,500 Standard hours allowed 5,800 Actual labor rate $14.75 per hour Standard labor rate $14.00 per hour a. $4,350 Unfavorable b. $4,125 Unfavorable c. $4,200 Favorable

$4,125 Unfavorable Reason: The labor rate variance is: AH(AR-SR): 5,500 × ($14.75 - $14.00) = $4,125 Unfavorable

A price variance is the difference between the ______. a. actual price and the standard price multiplied by the actual amount of the input b. standard quantity allowed and the actual quantity used multiplied by the actual price c. standard quantity allowed and the actual quantity used multiplied by the standard price d. actual price and the standard price multiplied by the standard amount allowed

actual price and the standard price multiplied by the actual amount of the input

The materials price variance is the difference between the actual price of materials ______. a. times the actual quantity of materials and the standard price of materials times the standard quantity allowed for production b. and the standard price for materials with the difference multiplied by the standard quantity of material allowed c. and the standard price for materials with the difference multiplied by the actual quantity of materials

and the standard price for materials with the difference multiplied by the actual quantity of materials

A quantity variance is ______. a. calculated using the standard price of the input b. based only on the standard quantity of inputs c. based only on the actual quantity of inputs d. calculated using the actual price of the input

calculated using the standard price of the input

The variable overhead ________ variance measures activity differences and the variable overhead _________ variance measures cost differences.

efficiency; rate

The difference between the standard and the actual direct labor hourly rates is reflected in the __________ __________ variance

labor rate

The purchasing manager is generally responsible for the material ___________ variance, and the production manager is generally responsible for the material ___________ variance.

price; quantity

If poor-quality materials results in excessive labor processing time, the ___________ manager will probably be held responsible for the labor efficiency variance.

purchasing

SP(AQ-SQ) is the formula for the materials __________ variance.

quantity

AH(AR - SR) is the formula for the variable overhead __________ variance

rate

The material variance terms price and quantity are replaced with the terms ________ and ________ when computing direct labor variances

rate; hours

The standard cost for ______ manufacturing overhead is computed the same way as the standard cost for direct labor. a. fixed b. variable c. both variable and fixed

variable

The standard rate per unit that a company expects to pay for variable overhead equals the ______. a. total predetermined overhead rate b. variable portion of the predetermined overhead rate c. variable portion of actual overhead the company expects to incur d. total actual overhead the company expects to incur

variable portion of the predetermined overhead rate

When direct labor is used as the overhead allocation base, the variable overhead efficiency variance ______. a. will always be unfavorable b. cannot be calculated c. will be favorable when the direct labor efficiency variance is favorable d. explains how efficient overhead resources were used

will be favorable when the direct labor efficiency variance is favorable

To calculate a price variance, multiply the ___________ quantity times the actual price and compare it to the actual quantity times the _________ price.

actual; standard

To calculate a quantity variance, multiply the _________ quantity times the standard price and compare it to the standard quantity allowed times the __________ price

actual; standard

The difference between the actual hours used and the standard hours allowed for the actual output is used in the calculation of the labor ___________ variance

efficiency