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