Multiple Choice Questions:

1) Which of the following will result in an unfavorable direct labor cost variance?

A) When actual direct labor hours exceed standard direct labor hours

B) When actual direct labor hours are less than standard direct labor hours

C) When the actual direct labor rate exceeds the standard direct labor rate

D) When the actual direct labor rate is less than the standard direct labor rate

2) Which of the following will result in an unfavorable direct materials efficiency variance?

A) The actual cost per unit of direct materials exceeded the standard cost of direct materials.

B) The actual cost per unit of direct materials was less than the standard cost of direct materials.

C) The actual quantity of direct materials used per unit exceeded the standard quantity of direct materials allowed per unit.

D) The actual quantity of direct materials used per unit was less than the standard quantity of direct materials allowed per unit.

3) Which of the following best describes standard costs?

A) Costs used as a budget for a single unit of product

B) Costs incurred to produce a product

C) Costs based on the average of current market values

D) Costs used to compare with competitors' prices

4) Which of the following is one of the reasons why companies use standard costs?

A) To enhance customer loyalty

B) To set performance targets

C) To share best practices with other companies

D) To ensure the accuracy of the financial records

5) Which of the following is one of the reasons why companies use standard costs?

A) To enhance customer loyalty

B) To ensure the accuracy of the financial records

C) To share best practices with other companies

D) To make budgeting easier and more efficient