Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. Determine the FALSE statement about standard costing. a. Standard costing is compatible with both job order costing and process costing. b. Standard costs usually

1. Determine the FALSE statement about standard costing.

a. Standard costing is compatible with both job order costing and process costing.

b. Standard costs usually appear in the general ledger while budgeted costs do not.

c. A variance that has a debit balance generally indicates an unfavorable performance.

d. Unfavorable variances should be reviewed, but significant favorable variances need not be

reviewed.

2. When used for inventory valuation, standard cost variances with material amounts are closed to the

a. Cost of goods sold only

b. Cost of goods sold and finished goods inventory

c. Cost of goods sold, finished goods inventory and work in process

d. Cost of goods sold, finished goods inventory, work in process and direct materials

3. Which department is usually held responsible for an unfavorable materials price variance?

a. Production c. Engineering

b. Purchasing d. Materials handling

4. In standard costing, materials quantity variances are the responsibility of

a. Purchasing and sales c. Production and industrial engineering

b. Sales and industrial engineering d. Purchasing and industrial engineering

5. Which set of terms describes the same type of variance?

a. Price variance, rate variance, use variance

b. Price variance, rate variance, efficiency variance

c. Use variance, efficiency variance, quantity variance

d. Use variance, efficiency variance, spending variance

Items 6 and 7 are based on the following information

The standard for each finished unit of product allows for 3 pounds of plastic at P 0.72 per pound. During

December, 4,500 pounds of plastic were bought at P 0.75 per pound, and used 4,100 pounds in the

production of 1,300 finished units of product.

6. What is the materials quantity variance (MQV) for December?

a. P 144 favorable c. P 432 favorable

b. P 144 unfavorable d. P 432 unfavorable

7. What is the materials price variance (MPV) for December?

a. P 135 favorable c. P 123 favorable

b. P 135 unfavorable d. P 123 unfavorable

8. A debit balance in the labor efficiency variance indicates that

a. Standard hours exceed actual hours c. Actual hours exceed normal hours

b. Actual hours exceed standard hours d. Normal hours exceed actual hours

9. The direct labor costs for the month of January 2021 were as follows:

Actual direct labor hours 20,000

Standard direct labor hours 21,000

Direct labor rate variance, unfavorable P 3,000

Total payroll P 126,000

What was the direct labor efficiency variance?

a. P 6,000 favorable c. P 6,150 unfavorable

b. P 6,150 favorable d. P 6,300 unfavorable

10. An unfavorable labor efficiency variance could be caused by a

a. Unfavorable materials usage variance

b. Unfavorable fixed overhead volume variance

c. Favorable variable overhead spending variance

d. Unfavorable variable overhead spending variance

11. Under the two-variance method for analyzing FOH, budget or controllable variance is computed by

subtracting from actual FOH costs incurred the

a. Budgeted FOH based on actual hours c. Budgeted FOH based on standard hours

b. Budgeted FOH based on normal hours d. Budgeted FOH based on budgeted hours

12. Which of the following is considered as a non-controllable FOH variance?

a. Variable spending variance c. Efficiency Variance

b. Fixed spending variance d. Volume Variance

13. The FOH variances were determined as follows:

Variable overhead spending variance P 3,500 F

Variable overhead efficiency variance P 4,000 U

Fixed overhead spending variance P 5,000 F

Fixed overhead volume variance P 6,500 U

What was overhead controllable variance?

a. P 500 U c. P 4,500 F

b. P 1,500 U d. P 5,500 U

14. Assuming the same data in item 13, what is the total overhead variance?

a. P 2,000 over-applied c. P 3,500 under-applied

b. P 2,000 under-applied d. Cannot be determined from given info

15. How do you call the sum of materials variance, labor variance, and overhead variance?

a. Mix variance c. Volume variance

b. Yield variance d. Production cost variance

ASAP. WILL RATE UNHELPFUL IF ITS TOO LATE.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions