ACCOUNTING

the standard quantity or hours and the standard price or rate required to produce a unit of a specific product is shown on a standard ________

cost card

excessive inventory on hand, especially in the work in process inventory account, leads to:

increased defects, inefficient operations, obsolete goods

the difference between the actual hours used and the standard hours allowed for the actual output is used in the calculation of the __________

labor efficiency variance

standard costs are a key element in the _______ approach utilized by some companies

management by exception

the standard labor rate per hour:

may be a single rate for all employees in a department

an unfavorable materials quantity variance:

occurs when the actual amount of material used is greater than the standard amount of material allowed for the actual output period

the materials _________variance reflects the difference between the actual price paid for the material and what should have been paid according to the standard

price

the ________ supervisor is generally responsible for controlling the labor rate variance

production

the ________ is usually responsible for controlling the labor efficiency variance

production manager

Material Quantity Variance

SP(AQ-SQ)

Labor efficiency variance

SR(AH-SH)

variable overhead efficiency variance

SR(SH-AH)

the materials price variance is calculated using the ______quantity of the input purchased

actual

direct labor variances

are computed in the same way as material variances

standard costs may:

be used to compute both flexible budget activity and spending variances

Standards are:

benchmarks for measuring performance, compared to the actual quantities, and costs of inputs, set for each major production input

True or False: quantity standards refer to the price to be paid for each unit of the input

false

Warren, Inc. standard cost card indicates that each widget should require 2 Ibs. of material. In july warren budgeted 2,000 widgets and actually produced 1500 widgets. each widget produced used 2.2 of material. the standard quantity of materials allowed for july is:

3000 pounds

Labor rate variance

AH(AR-SR)

Material Price Variance

AQ(AP-SP)

the standard price per unit for direct materials:

can change as a result of change in the delivery method, is based on the quality of material to be purchased

a favorable labor rate variance is always favorable for a company: true or false

false

true or false:The standard hours or quantity allowed for an input is the amount of input that should have been used to produce the standard output for the period

false

an _______materials price variance occurs when the standard price is higher than the actual price

favorable

when the actual quantity of materials used is less than the standard quantity allowed, the material quantity variance is labeled as _______

favorable

poor supervision is one possible cause of an unfavorable_________variance

labor efficiency

________ standards specify how much input should be used to produce a product or provide a service

quantity

the difference between the amount of an input used and the amount that should have been used, all evaluated at the standard price for the input, is called a:

quantity variance

The _____ price per unit of an input should reflect the expected cost of the raw materials less any discounts taken

standard

a benchmark used in measuring performance is called a(n)

standard

a price _______ indicates how much should be paid for an input

standard

the amount of an input that should have been used to produce the actual output is known as the _______quantity or hours allowed

standard

standard quantities and the cost of inputs to make a single product are accumulated on a(n) _______card

standard cost

the most difficult standard to determine is probably the:

standard hours per unit

a price variance is the difference between:

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

the standard rate per direct labor-hour includes:

the base rate per hour, fringe benefits, and the employer share of payroll taxes

if managers consider it unwise to adjust the workforce in response to changes in workload:

the direct labor workforce is really fixed in the short run

if the actual level of activity is greater than the planned level of activity, the activity variances will be:

unfavorable

the standard cost for ________ manufacturing overhead is computed the same way as the standard cost for direct labor

variable