CH10

Select all that apply Standards are Blank______. Multiple select question. benchmarks for measuring performance related to the price and quantity of inputs compared to actual results with significant differences investigated generally only used in managerial accounting

benchmarks for measuring performance related to the price and quantity of inputs compared to actual results with significant differences investigated NOT: generally only used in managerial accounting Reason: Standards are found in most situations both inside and outside of accounting.

A quantity variance is Blank______. Multiple choice question. based only on the standard quantity of inputs calculated using the actual price of the input calculated using the standard price of the input based only on the actual quantity of inputs

calculated using the standard price of the input A quantity variance is the difference between how much of an input was actually used and how much should have been used for the actual level of output and is stated in dollar terms using the standard price of the input.

The variable overhead _____________ variance measures activity differences and the variable overhead ________________ variance measures cost differences.

efficiency; rate

Select all that apply When using a standard cost system, Blank______. Multiple select question. employees may take unfavorable actions to ensure favorable variances the most important objective for the company is to meet the standards an undue emphasis on labor efficiency can create pressure to build excess inventory

employees may take unfavorable actions to ensure favorable variances an undue emphasis on labor efficiency can create pressure to build excess inventory NOT: the most important objective for the company is to meet the standards incorrect Reason: Too much emphasis on meeting standards may overshadow other important objectives.

Select all that apply The materials price variance is generally calculated at the time materials are purchased because Blank______. Multiple select question. it simplifies bookkeeping it allows materials to be carried in the inventory accounts at standard cost GAAP requires variances to be recognized when they are incurred management can generate more timely variance reports

it simplifies bookkeeping it allows materials to be carried in the inventory accounts at standard cost management can generate more timely variance reports NOT: GAAP requires variances to be recognized when they are incurred Reason: GAAP does not require the recording of variances.

Material requirements plus an allowance for normal inefficiencies are added together to determine the ___________ ____________ per unit of output for direct materials.

standard quantity The standard quantity per unit defines the amount of direct materials that should be used for each unit of finished product, including an allowance for normal inefficiencies, such as scrap and spoilage.

The standard cost for Blank______ manufacturing overhead is computed the same way as the standard cost for direct labor. Multiple choice question. both variable and fixed fixed variable

variable