Managerial Accounting chpt 10

Material requirements plus an allowance for normal inefficiencies are added together to determine the ______________ per unit

Standard Quantity

The labor rate variance measures the productivity of direct labor. True false question. t/f

False, The labor rate variance reflects the difference between the actual and standard direct labor rates.

A price variance is the difference between the ______.

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

The variable overhead ____________ variance measures activity differences and the variable overhead _________________ variance measures cost differences.

efficiency rate

The labor rate variance measures the productivity of direct labor. t/f

false

The standard hours per unit includes both direct and indirect labor hours t/f

false

The terms price and quantity are used when computing direct materials ___________ variance, while the terms rate and hours are used when computing _______________ variances.

materials Labor

(Actual cost per unit - standard cost per unit) × actual quantity = the materials _______________ variance.

price

The difference between the actual amount of an input used and the amount that should have been used, stated in dollar terms using the standard price of the input, is called a(n) _______________ variance.

quantity

The difference between the standard and the actual direct labor wages per hour is reflected in the labor ____________ variance.

rate

The difference between the standard and the actual direct labor wages per hour is reflected in the labor ______________ variance.

rate

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

rate hours

The amount of direct-labor hours that should be used to produce one unit of finished goods is the __________________hours per unit.

standard

Actual hours used 5,500; Standard hours allowed 5,800; Actual labor rate $14.75 per hour; and Standard labor rate $14.00 per hour. The labor rate variance is ____________.

AH(AR-SR): 5,500 × ($14.75 - $14.00) = $4,125 U

The materials price variance is calculated using the ____________ quantity of the input purchased. Actual or standard

Actual

Actual hours used 5,500; Standard hours allowed 5,800; Actual labor rate $14.75 per hour; and Standard labor rate $14.00 per hour. The labor efficiency variance is ______.

$14.00 × (5,800 - 5,500) = $4,200 F

The material quantity variance reflects the difference between the _____________ quantity of materials used in production and the _______________ quantity of materials allowed for the actual output.

1. Actual 2. Standard

Which of the following are used to calculate the standard quantity per unit of direct materials?

Direct materials requirements per unit of finished product. Allowance for normal scrap and spoilage.

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 actual quantity of materials c. and the standard price for materials with the difference multiplied by the standard quantity of material allowed

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

SR(AH - SH) is the formula for the Blank______ variance. a. material price b. labor efficiency c. material quantity d. labor rate

b. labor efficiency

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

b. variable portion of the predetermined overhead rate

The same basic formulas used for materials and labor are used to analyze the ___________ portion of manufacturing overhead.

variable

The difference between the actual amount of an input used and the amount that should have been used, stated in dollar terms using the standard price of the input, is called a(n) _________________ variance.

Quantity

The difference between the actual amount of materials used in production and the standard amount of materials allowed for the actual output, multiplied by the standard price per unit of materials is the materials ___________ variance.

Quantity

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

Spending

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

Spending

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

Standard

The labor efficiency variance is the difference between actual hours used and standard hours allowed multiplied by the ______ hourly rate.

Standard

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

Standard quantity

When the actual cost incurred exceeds the standard cost allowed for the actual level of output, the spending variance is _____________. Favorable or Unfavorable

Unfavorable

The standard cost for ______ manufacturing overhead is computed the same way as the standard cost for direct labor.

Variable

When calculating the labor rate variance, multiply the actual hours worked times the ______________ labor rate and compare it to the actual hours worked times the _________________ labor rate.

actual standard

Which of the following statements are true? a. The purpose of using standards is to assess blame and responsibility. b. Standards provide information for measuring performance. c. When actual results depart significantly from the standard, the reasons why should be investigated. d. Standards are only used in managerial accounting.

b & c

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

c. calculated using the standard price of the input

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

c. the variable

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

The difference between the actual level of activity and the standard activity allowed for the actual output x the variable part of the predetermined overhead rate is the variable overhead _______________ variance.

efficiency

The standard rate per unit that a company expects to pay for variable overhead equals the ___________________.

variable portion of the predetermined overhead rate