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Exam 9: Standard Costing: a Functional-Based Control Approach

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Question 61

True/False

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All variances accounts are closed out at the end of the year.

A) True
B) False

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Question 62

Multiple Choice

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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.

E) C) and D)
F) A) and D)

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Question 63

Multiple Choice

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All of the following are true of currently attainable standards EXCEPT

Formidable Company collected the following information: Using the two variance method, what is the volume variance?

Compare and contrast mix and yield variances.

The following standard costs were developed for one of the products of Razzmatazz Corporation: The following information is available regarding the company's operations for the period: Budgeted fixed manufacturing overhead for the period is $960,000, and the standard fixed overhead rate is based on expected capacity of 80,000 direct labor hours. Required:

The most detailed method to compute overhead variances is the four-variance method.

The formula for the fixed overhead spending variance is:

During September, 40,000 units were produced. The standard quantity of material allowed per unit was 5 pounds at a standard cost of $2.50 per pound. If there was a favorable usage variance of $25,000 for September, the actual quantity of materials used must have been

Figure 9-4 San Francisco Corporation uses two materials in the production of its product. The materials, X and Y, have the following standards: During April, the following actual production information was provided: Refer to Figure 9-4. What is the materials usage variance?

Unfavorable variances occur whenever actual prices or usage are less than standard prices or usage, and the opposite for a favorable variance.

Colina Production Company uses a standard costing system. The following information pertains to 2014. Direct labor hours is the driver used to assign overhead costs to products. The factory overhead rate is based on an activity level of 10,000 direct labor hours. Standard cost data for 5,000 units is as follows: What is the variable overhead efficiency variance for Colina Production Company?

Quantity price standards

The costing that establishes price and quantity standards for inputs is called __________ costing.

Organics Corporation uses two different types of labor to manufacture its product. The types of labor, Cutting and Setup, have the following standards: During July, the following actual production information was provided: Required: Calculate the labor mix and yield variances.

The standard overhead cost assigned to each unit of product manufactured is called the

Which of the following equations measures the total budget variance?

Somalian Corporation uses a standard costing system. Information for the month of May is as follows: The factory overhead rate is based on a normal volume of 12,000 direct labor hours. Standard cost data at 12,000 direct labor hours were as follows: What is the fixed overhead spending variance for Somalian?

An unfavorable variable overhead spending variance may be caused by

LaPointe Corporation uses two different types of labor to manufacture its product. The types of labor, Cutting and Setup, have the following standards: During January, the following actual production information was provided: Required: Calculate the labor efficiency and mix and yield variances.