1. Statement 1: A budgeted cost for one unit of product may not always be the standard cost of said product. Statement 2: Standard costs maybe described as benchmarks used to evaluate performance.

both statements are true

both statements are false

Statement 1 is true

Statement 2 is true

2. Who is least likely to be involved in establishing standard costs for a company?

the president

the controller

the factory administrator

the marketing manager

3. An entity that uses direct costing in its performance evaluation would normally include the following variance in its report, except:

Price variance

Volume variance

Budget variance

Efficiency variance

4. What would result in a favorable volume variance?

Production is greater than budgeted

There is a favorable efficiency variance

Production is equal to sales

There is a favorable spending variance

5. Standard costs differ from budgeted costs because standard costs are:

always expressed in total amounts while budgeted costs are in per unit amounts

costs incurred for actual production while budgeted costs are that should have been incurred for production

costs that have been incurred for actual production while budgeted costs are costs that should be incurred for planned production

based on engineering studies while budgeted costs are based on historical data