Managerial ACCT Module 4

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which of the following is not true regarding engineering studies

they are often achievable by operating personnel

An unfavorable price variance occurs whenever the actual prices are greater than the standard prices.

true

For better control, the materials price variance is computed using actual quantity of materials purchased.

true

The standard cost sheet provides the input standards needed to compute the total amount of inputs allowed for the actual output, an essential component in computing efficiency variances.

true

an unfavorable usage variance would occur when the actual usage of inputs is greater than the standard usage

true

currently attainable standards can be achieved under efficient operating conditions

true

currently attainable standards offer the most behavioral benefits because higher performance levels are attained through challenging, yet achievable, standards

true

ideal standards can be achieved only if everything operates perfectly, meaning that they do not allow for any machine breakdowns, slack, etc.

true

in setting standards, historical experience should be used with caution because it can perpetuate operating inefficiencies

true

in setting standards, historical experience should be used with caution because it can perpetuate operating inefficiencies.

true

managers develop price standards when they determine what amount should be paid for the quantity of input to be used

true

the actual quantity of input at the actual price less the actual quantity of input at the standard price is the price variance

true

the actual quantity of input at the standard price less than the standard quantity of input at the standard price equals the usage variance.

true

the quantity of each input that should be used to produce one unit of output is documented on the standard cost sheet

true

the standard cost sheet provides the input standards needed to compute the total amount of inputs allowed for the actual output, an essential component in computing efficiency variances

true

the sum of the labor rate and labor efficiency variances will always add up to the total labor variance

true

the total budget variance is the difference between the actual cost of the input and its planned cost

true

which of the following is true regarding variances

unfavorable variances occur whenever actual prices or actual usage of inputs are greater than standard prices or standard usage

standard hours allowed are computed using the equation

unit labor standard X actual output

the standard quantity of materials allowed is computed by the equation

unit quantity standard X actual output

which of the following is true regarding standard cost systems in manufacturing environments that emphasize continuous improvement and just-in-time manufacturing and purchasing

variances can be computed and presented in reports to higher-level managers

standard cost systems can enhance operational control through the use of

efficiency variances which indicate the need for corrective action

All of the following are true regarding variance investigation except

every variance is investigated

all of the following are true regarding variance investigation except

every variance is investigated

the labor efficiency variance is calculated by the equation

(actual hours X standard rate) - (standard hours X standard rate

the materials price variance is computed using the equation

(actual price X actual quantity) - (standard price X actual quanitity)

the labor rate variance is computed by

(actual rate X actual hours) - (standard rate X actual hours)

which of the following is not true regarding the use of materials variance information

all of these are true

standards based on the amount of input that should be used per unit of output are called

quantity standards

all of the following are true except

a favorable labor rate variance could result from lower wage workers quitting

which of the following is not an advantage of standard costing over normal costing and actual costing

ability to easily distinguish the FIFO and weighted average methods of accounting for beginning inventory costs

ideal standards

all of these -do not allow for machine breakdowns, slack, or lack of skill -demand maximum efficiency -can be achieved only if everything operates perfectly

which of the following is true regarding currently attainable standards

all of these -they can be achieved under efficient operating conditions -allowance is made for normal breakdowns, interruptions, etc. -they are challenging but achievable -they tend to achieve higher performance levels from personnel

The materials price variance is computed using the actual quantity of materials used, and the materials usage variance is computed using the actual quantity of materials purchased.

false

ideal standards can be achieved under efficient operating conditions

false

the standard quantity of materials allowed can be calculated by multiplying the unit labor standard by the actual output

false

standard costs are developed for direct materials, direct labor, and variable overhead only

false, its variable and fixed overhead

Which of the following is not true concerning control limits?

in current practice, control limits are set objectively using standard formulas

which of the following is true concerning the materials price variance

it is the difference between the actual and standard unit price of an input multiplied by the number of inputs purchased

which of the following is true regarding historical experience in standard setting

it should be used with caution because it can perpetuate inefficiencies

price standards are based on

the amount that should be paid for the total quantity of input to be used

Which of the following is not true concerning direct materials variances?

the materials price variance always uses the actual quantity of materials used rather than the actual quantity of materials purchased

the production data needed to calculate the standard unit cost as well as the underlying details for the standard cost per unit are provided in

the standard cost sheet


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