Cost Accounting Final Exam

The standard cost card contains quantities and costs for a.) direct material, direct labor, and overhead. b.) direct labor only. c.) direct material only. d.) direct material and direct labor only.

direct material, direct labor, and overhead.

The variance most useful in evaluating plant utilization is the a.) variable overhead spending variance. b.) variable overhead efficiency variance. c.) fixed overhead volume variance. d.) fixed overhead spending variance.

fixed overhead volume variance.

The term "standard hours allowed" measures a.) actual output at actual hours. b.) actual output at standard hours. c.) budgeted output at actual hours. d.) budgeted output at standard hours.

actual output at standard hours.

Standard costs may be used for a.) controlling. b.) planning. c.) product costing. d.) all of the above.

all of the above.

At the end of a period, a significant material quantity variance should be a.) allocated among Raw Material, Work in Process, Finished Goods, and Cost of Goods Sold. b.) carried forward as a balance sheet account to the next period. c.) closed to Cost of Goods Sold. d.) allocated among Work in Process, Finished Goods, and Cost of Goods Sold.

allocated among Work in Process, Finished Goods, and Cost of Goods Sold.

A primary purpose of using a standard cost system is a.) to make things easier for managers in the production facility. b.) to provide a distinct measure of cost control. c.) to minimize the cost per unit of production. d.) b and c are correct.

to provide a distinct measure of cost control.

In analyzing manufacturing overhead variances, the volume variance is the difference between the a.) predetermined overhead application rate and the flexible budget application rate times actual hours worked. b.) actual amount spent for overhead items during the period and the overhead amount applied to production during the period. c.) amount shown in the flexible budget and the amount shown in the debit side of the overhead control account. d.) budget allowance based on standard hours allowed for actual production for the period and the amount budgeted to be applied during the period.

budget allowance based on standard hours allowed for actual production for the period and the amount budgeted to be applied during the period.

A company has a favorable variable overhead spending variance, an unfavorable variable overhead efficiency variance, and underapplied variable overhead at the end of a period. The journal entry to record these variances and close the variable overhead control account will show which of the following? VOH spending variance - VOH efficiency variance - VMOH a.) debit credit debit b.) credit debit credit c.) debit credit credit d.) credit debit debit

credit debit credit

If actual direct labor hours (DLHs) are less than standard direct labor hours allowed and overhead is applied on a DLH basis, a(n) a.) unfavorable volume variance exists. b.) favorable volume variance exists. c.) favorable variable overhead efficiency variance exists. d.) favorable variable overhead spending variance exists.

favorable variable overhead efficiency variance exists.

The variance least significant for purposes of controlling costs is the a.) material quantity variance. b.) fixed overhead spending variance. c.) variable overhead efficiency variance. d.) fixed overhead volume variance.

fixed overhead volume variance.

The sum of the material price variance (calculated at point of purchase) and material quantity variance equals a.) the total cost variance. b.) no meaningful number. c.) the material yield variance. d.) the material mix variance.

no meaningful number.

When computing variances from standard costs, the difference between actual and standard price multiplied by actual quantity used yields a a.) quantity variance. b.) mix variance. c.) combined price-quantity variance. d.) price variance.

price variance.

A purpose of standard costing is to a.) replace budgets and budgeting. b.) eliminate the need for actual costing for external reporting purposes. c.) eliminate the need to account for year-end underapplied or overapplied manufacturing overhead. d.) simplify costing procedures.

simplify costing procedures.

A large labor efficiency variance is prorated to which of the following at year-end? Cost of Goods Sold - WIP Inventory - FG Inventory a.) yes yes yes b.) yes no no c.) no no no d.) no yes yes

yes yes yes

Patterson Company The following information is for Patterson Company's July production: Standards: Material - 3.0 feet per unit @ $4.20 per foot Labor - 2.5 hours per unit @ $7.50 per hour Actual: Production - 2,750 units produced during the month Material - 8,700 feet used; 9,000 feet purchased @ $4.50 per foot Labor - 7,000 direct labor hours @ $7.90 per hour Refer to Patterson Company. What is the material price variance (calculated at point of purchase)? a.) $2,700 U b.) $2,700 F c.) $2,610 U d.) $2,610 F

$2,700 U

Patterson Company The following information is for Patterson Company's July production: Standards: Material - 3.0 feet per unit @ $4.20 per foot Labor - 2.5 hours per unit @ $7.50 per hour Actual: Production - 2,750 units produced during the month Material - 8,700 feet used; 9,000 feet purchased @ $4.50 per foot Labor - 7,000 direct labor hours @ $7.90 per hour Refer to Patterson Company. What is the labor rate variance? a.) $3,480 F b.) $2,800 F c.) $3,480 U d.) $2,800 U

$2,800 U

Buckingham Company Buckingham Company uses a standard cost system for its production process and applies overhead based on direct labor hours. The following information is available for May when Buckingham produced 4,500 units: Standard: DLH per unit - 2.50 Variable overhead per DLH - $1.75 Fixed overhead per DLH - $3.10 Budgeted variable overhead - $21,875 Budgeted fixed overhead - $38,750 Actual: Direct labor hours - 10,000 Variable overhead - $26,250 Fixed overhead - $38,000 Refer to Buckingham Company. Using the one-variance approach, what is the total overhead variance? a.) $3,625 U b.) $6,062 U c.) $6,562 U d.) $9,687 U

$9,687 U

Patterson Company The following information is for Patterson Company's July production: Standards: Material - 3.0 feet per unit @ $4.20 per foot Labor - 2.5 hours per unit @ $7.50 per hour Actual: Production - 2,750 units produced during the month Material - 8,700 feet used; 9,000 feet purchased @ $4.50 per foot Labor - 7,000 direct labor hours @ $7.90 per hour Refer to Patterson Company. What is the material quantity variance? a.) $3,105 U b.) $1,050 F c.) $1,890 U d.) $3,105 F

$1,890 U