Managerial ACCT Module 4
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
