Help with these Cost questions

Question 11

Which of the following is NOT true about currently attainable standards?

	a) they are based on an efficiently operating work force
	b) they are based on ideal conditions
	c) they allow for downtime and rest periods
	d) they are based on present production processes and technology

Question 12

Variances indicate

	a) the cause of the variance
	b) who is responsible for the variance
	c) that actual performance is not going according to plan
	d) when the variance should be investigated

Question 13

Which of the following is information that would be included in the standard cost sheet?

	a) quantity and price of direct materials for each unit of output
	b) retail price of the product charged to the customers
	c) delivery cost per unit of product
	d) all of the above

Question 14

Price variances focus on the difference between

	a) actual price and standard price for actual quantity allowed for units actually produced
	b) actual price and standard price for standard quantity allowed for units actually produced
	c) actual price and standard price for actual quantity allowed for estimated activity
	d) none of the above

Question 15

Efficiency variances focus on the difference between

	a) actual quantity used and standard quantity allowed for estimated activity
	b) actual quantity used and standard quantity allowed for units actually produced
	c) quantity allowed for estimated production and standard quantity allowed for units actually produced
	d) none of the above

Question 16

When do unfavorable variances occur?

	a) when actual prices paid for materials are less than the standard price set
	b) when standard prices set for materials is greater than actual prices paid
	c) when actual prices paid for materials are less than the budgeted price
	d) when actual prices paid for materials are greater than the budgeted price

Question 17

When should variances be investigated?

	a) when they fall out of the accepted range or the control limit
	b) when the variances are unfavorable
	c) when the variances are over $10,000
	d) all variances should be investigated

Question 18

Laune Co.'s standard cost is $200,000, and its allowable deviation is $20,000. Laune's upper and lower control limits are

	a) $220,000 and $200,000
	b) $200,000 and $180,000
	c) $220,000 and $180,000
	d) $210,000 and $190,000

Question 19

The materials price variance is calculated as

	a) (actual price - standard price) x actual quantity
	b) (actual price - standard price) x standard quantity
	c) (actual quantity - standard quantity) x actual price
	d) (actual quantity - standard quantity) x standard price

Question 20

During May, 6,000 pounds of raw materials were purchased at a cost of $2.60 per pound. If there was a favorable materials price variance of $900 for December, the standard cost per pound must be

	a) $2.75
	b) $2.60
	c) $2.45
	d) none of the above

Question 21

Decentralization occurs when

	a) the firm's operations are located over a large geographic area to reduce risk
	b) authority for important decisions is delegated to lower segments of the organization
	c) important decisions are made at the upper levels and the lower levels of the organization are responsible for implementing the decisions
	d) None of the above are correct.

Question 22

Why would a company decide to decentralize?

	a) To ensure all decisions are made by one or two key individuals within the company.
	b) To enhance competition, exposing segments to market forces.
	c) To keep decision making within the top levels of the organization.
	d) To discourage competition from other companies in the same field.

Question 23

The Marketing Department is most likely considered to be a(n)

	a) profit center
	b) revenue center
	c) investment center
	d) cost center

Question 24

Types of responsibility centers include all of the following EXCEPT

	a) profit centers
	b) contribution centers
	c) investment centers
	d) cost centers

Question 25

When variable costing is used, all of the following are considered product costs EXCEPT

	a) direct labor
	b) fixed overhead
	c) variable overhead
	d) direct materials

Question 26

When variable costing is used, fixed manufacturing overhead is recognized as an expense when

	a) the cost is incurred
	b) the product is sold
	c) the product is completed
	d) none of the above are correct

Question 27

Which costing method is NOT acceptable to the FASB for external reporting

	a) absorption costing
	b) full costing
	c) variable costing
	d) all of the above methods are acceptable

Question 28

Variable costing income will usually exceed absorption costing income when

	a) sales exceed production
	b) production exceeds sales
	c) production and sales are equal
	d) none of the above are correct

Question 29

Return on investment (ROI) is calculated as

	a) Operating income/Average operating assets
	b) (Operating income/Sales) (Sales/Average operating assets)
	c) Operating income margin Operating asset turnover
	d) all of the above

Question 30

Assuming that sales and operating assets remain the same, a company's ROI will

	a) decrease if operating income increases
	b) decrease if operating expenses decrease
	c) increase if margin decreases
	d) increase if margin increases