cost acct ch 10

management, excpetion

Standard costs are a key element in the ________________ by ________________ approach utilized by some companies.

b. unfavorable

A labor rate variance is _______________ when the standard hourly rate is lower than the actual rate. a. favorable b. unfavorable

a. favorable

A materials price variance is ______________ when the standard price is higher than the actual price. a. favorable b. unfavorable

quantity

How much input should be used to produce a product or provide a service is a(n) _______________ standard.

price

How much should be paid for each unit of an input is specified by a(n) _______________ standard.

favorable

If overhead is overapplied, the total of the standard cost overhead variances is __________________.

purchasing

If poor-quality materials results in excessive labor processing time, the _____________ manager will probably be held responsible for the labor efficiency variance.

a. unfavorable

If the actual level of activity is greater than the planned level of activity, the activity variances will be: a. unfavorable b. favorable

standard quantity

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

b. labor efficiency

Poor supervision is one possible cause of an unfavorable _______________ variance. a. fixed overhead budget b. labor efficiency c. material price d. labor rate

a. underapplied

STP inc. has a variable overhead rate variance of $4,000 U, a variable overhead efficiency variance of $1,500 F, a fixed overhead budget variance of $2,000 F and a fixed overhead volume variance of $10,000 U. From the information, it can be determined that overhead was: a. underapplied b. overapplied c. neither

standard

The amount of an input that should have been used to produce the actual output is known as the _____________ quantity or hours allowed.

standard

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

spending

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

efficiency

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.

quantity

The difference between the actual materials used in production and the standard amount allowed for the actual output is reflected in the materials __________________ variance.

False

True or False: All materials variances are generally the responsibility of the production manager

False

True or False: The standard hours or quantity allowed for an input is the amount of the input that should have been used to produce the standard output for the period.

False

True or False: The standard hours per unit includes both direct and indirect labor hours.

False

True or False: A favorable labor rate variance is always favorable for a company.

true

True or False: If the actual hourly rate is greater than the standard hourly rate, the labor rate variance is labeled unfavorable (U).

False

True or false: Waste on the production line will result in an unfavorable materials price variance.

quantity

The difference between the amount of an input used and the amount that should have been used, all evaluated at the standard price for the input, is called a(n) _______________ variance.

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

A price variance is the difference between the: a. standard quantity allowed and the actual quantity used multiplied by the actual price b. actual price and the standard price multiplied by the standard amount allowed c. actual price and the standard price multiplied by the actual amount of the input d. standard quantity allowed and the actual quantity used multiplied by the standard price

standard

The final, delivered price that should be paid for each unit of direct materials is the _______________ price per unit of materials.

c. production

The labor efficiency variance is generally the responsibility of the _____________ manager. a. purchasing b. personnel c. production d. accounting

actual, standard

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

purchasing

The materials price variance is generally the responsibility of the ____________________ department manager.

price, quantity

The purchasing manager is generally responsible for the material ______________ variance, and the production manager is generally responsible for the material _________________ variance.

b. reflects the expected mix of workers

The standard labor rate per hour: a. is often determined using time and motion studies b. reflects the expected mix of workers c. should accounts for differences in skill and seniority d. should only include hourly wages and employment taxes

c. variable portion of the predetermined overhead rate

The standard rate per unit that a company expects to pay for variable overhead equals the _____________. a. total actual overhead the company expects to incur b. variable portion of actual overhead the company expects to incur c. variable portion of the predetermined overhead rate d. total predetermined overhead rate

b. error that occurs when the level of activity is estimated incorrectly

The volume variance is the: a. best measure of utilization of facilities available b. error that occurs when the level of activity is estimated incorrectly d. difference between the actual fixed overhead and the budgeted fixed overhead

d. has no relationship to actual spending

The volume variance: a. depends on the difference between hours used to compute the predetermined overhead rate and actual hours b. evaluates both fixed and variable overhead c. measures the difference between actual and budgeted fixed overhead d. has no relationship to actual spending

actual, standard

To calculate a quantity variance, multiply the __________ quantity times the standard price and compare it to the standard quantity allowed times the _______________ price.

favorable

When budgeted fixed overhead costs is less than fixed overhead applied to work in process, the volume variance is labeled _____________.

favorable

When the actual hourly rate is lower than the standard hourly rate, the labor rate variance is __________________.

favorable

When the actual quantity of materials used is less than the standard quantity allowed, the material quantity variance is labeled as _______________.

a. favorable

When the standard cost allowed for the actual output is less than the standard cost allowed for the planned output the activity variance is labeled as: a. favorable b. unfavorable

unfavorable

When the standard purchase price is less than the actual price paid for materials, the material price variance is ________________.

variances

When using a standard cost system, the over and under applied overhead equals the sum of the overhead ________________ for the period.