1.If an analysis shows an unfavorable materials price variance of $22,000, the journal entry to record the purchase of direct materials and the related price variance would include:

A.a debit to Accounts Payable for $22,000.

B.a debit for $22,000 to Materials Price Variance.

C.a credit for $22,000 to Materials Price Variance.

D.a credit to Work in Process Inventory for $22,000.

E.None of the answer choices is correct.

2. Which of the following is a possible cause for an unfavorable labor rate variance?

A.An unexpected increase in hiring new unskilled personnel.

B.Producing fewer units than expected.

C.An unexpected increase in demand caused the direct labor workforce to work overtime.

D.Using attainable standards rather than ideal standards.

E.None of the answer choices is correct.

3. Colfax Company incurred production labor costs of $5,400 in February (payable in March) for work requiring 1,100 standard hours at a standard rate of $15 per hour; 1,200 actual direct labor hours were worked. Based on this information, which one of the following would be included in the journal entry to record the labor costs?

A.$16,500 credit to Work-in-process Inventory.

B.$1,500 credit to Labor Efficiency Variance.

C.$16,200 credit to Wages Payable.

D.$1,500 credit to Labor Rate Variance.

E.None of the answer choices is correct.

4. The variable overhead efficiency variance is the difference between the actual hours worked at the standard rate and the standard hours worked at the standard rate.

A.True

B.False

5. A higher mix of skilled indirect labor workers typically results in an unfavorable variable overhead spending variance.

A.True

B.False

6. The variable overhead efficiency variance is the difference between the actual hours worked at the actual rate and the standard hours worked at standard rate.

A.True

B.False

7. Favorable variances are recorded with a credit to the appropriate variance account.

A.True

B.False

8. Regardless of whether a company uses the traditional costing approach or an activity-based costing approach, the process of performing variance analysis is similar.

A.True

B.False

9. The materials quantity variance is defined as the difference between the actual quantity of materials purchased at the actual price and the actual quantity of materials purchased at the stand-ard price.

A.True

B.False

10. When establishing ideal standards, several factors are considered including machine down-time, electricity outages, and materials waste.

A.True
B.False