1. What variance captures the difference between AQ x AP and AQ x SP for direct materials?

A Materials price variance

B Materials usage variance

C Materials total variance

D None of the above

2. What variance captures the difference between AQ x SP and SQ x SP for direct labor?

A Labor rate variance

B Labor efficiency variance

C Labor total variance

D None of the above

3. Surfer Company builds custom surfboards. The actual amount of overhead incurred cannot be accurately measured until year end. Every surfboard consumes overhead activities in different proportions. Which of the following product costing methods do you recommend that Surfer Company use?

A job-order costing

B process costing

C all of the above

D none of the above

4. When attempting to compute a single product cost amount, companies should NOT try to combine

A Traditional Costing and Absorption Costing

B Traditional Costing and Activity-Based Costing

C Traditional Costing and Normal Costing

D Traditional Costing and Job-Order Costing

5. Which of the following costing methods do we always use when preparing the Master Budget?

A Actual Costing

B Normal Costing

C Standard Costing

D None of the above

6. Where in the Master Budget do we NOT use absorption costing?

A Cost of Goods Sold Budget

B Ending Inventory Budget

C Gross Margin version of the Budgeted Income Statement

D Contribution Margin version of the Budgeted Income Statement

7. Which of the following components of the Master Budget are NOT impacted by whether we choose to use traditional costing or activity-based costing?

A Direct Labor Budget

B Manufacturing Overhead Budget

C Ending Inventory Budget

D Cost of Goods Sold Budget

8. When attempting to compute a single product cost amount, companies should NOT try to combine

A Actual Costing and Variable Costing

B Actual Costing and Job Order Costing

C Actual Costing and Normal Costing

D Actual Costing and Activity-Based Costing

9. When attempting to compute a single product cost amount, companies should NOT try to combine

A Process Costing and Job-Order Costing

B Process Costing and Traditional Costing

C Process Costing and Standard Costing

D Process Costing and Variable Costing

10. Budgets are good for the organization because they help managers

A decrease reputational risk.

B protect non-value-added costs.

C monitor progress towards their goals

D encourage innovation.