ACCTG1B CH. 22
Which of the following is not a reason standard costs are separated in two components
Variance brings attention to discrepancies in the budget and requires managers to revise budgets closer to actual
All of the following statements about standards are true except:
Currently attainable standard do not allow for reasonable production difficulties
Generally standard cost should not be revised when
Actual costs differ from standard costs for preceding period But are not considered a permanent change
Significant year end variances from standard should be allocated
All of these choices (Only to work in process, only to finished goods, only to costs of goods sold)
Which is the best explanation for why the standard price and quantity of direct materials are separated into two standards?
Because the purchasing department controls price and the production department controls quantity
Year end variances from standard costs are usually transferred to the
Cost of goods sold account
Standards representing levels of operation that maybe attained with reasonable effort Are referred to as
Normal standards
Cost standards for non-manufacturing expenses are
Not as common as it is for manufacturing costs in practice
If the unit price differs from The Expected standard price per unit for direct materials the variance is termed
Price variance
Favorable volume variances are harmful when
Production in excess of normal capacity cannot be sold
If the actual quantity of direct materials differs from The Standard quantity Variance termed
Quantity Variance
The controllable variance best measures
The efficiency of using variable overhead resources