ACCY 309 Final- Chapter 7

B

A bill of material does not include A. quantity of component inputs. B. price of component inputs. C. quality of component inputs. D. type of product output

A

A company would most likely have an unfavorable labor rate variance and a favorable labor efficiency variance if A. the mix of workers used in the production process was more experienced than the normal mix. B. the mix of workers used in the production process was less experienced than the normal mix. C. workers from another part of the plant were used due to an extra heavy production schedule. D. the purchasing agent acquired very high quality material that resulted in less spoilage

D

A favorable fixed overhead volume variance occurs if A. there is a favorable labor efficiency variance. B. there is a favorable labor rate variance. C. production is less than planned. D. production is greater than planned

False

A fixed overhead volume variance is a controllable variance

True

A standard cost card is prepared after manufacturing standards have been developed for direct materials, direct labor, and factory overhead

D

A total variance is best defined as the difference between total A. actual cost and total cost applied for the standard output of the period. B. standard cost and total cost applied to production. C. actual cost and total standard cost of the actual input of the period. D. actual cost and total cost applied for the actual output of the period

D

A variable overhead spending variance is caused by A. using more or fewer actual hours than the standard hours allowed for the production achieved. B. paying a higher/lower average actual overhead price per unit of the activity base than the standard price allowed per unit of the activity base. C. larger/smaller waste and shrinkage associated with the resources involved than expected. D. both b and c are causes

B

Bailey Corporation. incurred 2,300 direct labor hours to produce 600 units of product. Each unit should take 4 direct labor hours. Bailey Corporation applies variable overhead to production on a direct labor hour basis. The variable overhead efficiency variance A. will be unfavorable. B. will be favorable. C. will depend upon the capacity measure selected to assign overhead to production. D. is impossible to determine without additional information.

False

Favorable variances are always desirable for production

False

In a totally automated organization, using theoretical capacity will generally provide the highest fixed overhead application rate

C

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

True

The difference between budgeted variable overhead for actual hours and standard overhead is the variable overhead efficiency variance

False

The formula for price/rate variance is (AP - SP) ´ SQ

D

The overhead variance calculated as total budgeted overhead at the actual input production level minus total budgeted overhead at the standard hours allowed for actual output is the A. efficiency variance. B. spending variance. C. volume variance. D. budget variance

D

The standard cost card contains quantities and costs for A. direct material only. B. direct labor only. C. direct material and direct labor only. D. direct material, direct labor, and overhead

A

The sum of the labor mix and labor yield variances equals A. the labor efficiency variance. B. the total labor variance. C. the labor rate variance. D. nothing because these two variances cannot be added since they use different costs

B

The sum of the material mix and material yield variances equals A. the material purchase price variance. B. the material quantity variance. C. the total material variance. D. none of the above

True

The total variance does not provide useful information about the source of cost differences

True

Unfavorable variances are represented by debit balances in the overhead account

C

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