Site MapHelpFeedbackChapter 10 Quiz 1
Chapter 10 Quiz 1
(See related pages)

1
David McDonald, the Management Accountant employed by the Standard Manufacturing Company, is investigating the difference between the actual costs incurred in the manufacturing process and the standard costs budgeted. The difference between the two costs is a:
A)control cost variance
B)budgeted cost variance
C)standard cost variance
D)historical cost variance
2
David McDonald, the Management Accountant employed by the Standard Manufacturing Company, is investigating the standard cost variances for the month of December. Standard cost variances are used to:
A)evaluate budgeted performance
B)evaluate the performance of major competitors
C)evaluate the performance of revenue centres
D)evaluate actual performance and control costs
3
Which of the following statements regarding the selection of standards is false?
A)Some managers believe that perfection standards motivate managers to achieve the lowest costs possible because they motivate employees to work as hard as possible to achieve the standards.
B)Some managers and many psychologists feel that perfection standards discourage workers from working hard because they are so unlikely to be achieved.
C)Setting unrealistic and difficult standards may encourage employees to sacrifice product quality to achieve lower costs.
D)Many organisational psychologists believe that practical standards result in lower motivation towards achieving standards and discourage more positive and productive employee attitudes, than do perfection standards.
4
The direct material price variance is:
A)the difference between the actual cost of the material purchased and the standard cost of the material purchased
B)the difference between the standard cost of the material used and the standard cost of the material allowed to produce the actual output
C)the difference between the actual cost of the material purchased and the standard cost of the material allowed to produce the actual output
D)the difference between the actual cost of the material purchased and the static budget cost of material purchased
5
The direct material quantity variance is:
A)the difference between the actual cost of the material purchased and the standard cost of the material purchased
B)the difference between the standard cost of the material used and the standard cost of the material allowed to produce the actual output
C)the difference between the actual cost of the material purchased and the standard cost of the material allowed to produce the actual output
D)the difference between the actual cost of the material purchased and the static budget cost of material purchased
6
When the amount of the raw materials purchased is different to the amount of raw materials used, the recommended method of calculating the direct materials price variance is on the basis of:
A)the direct materials used
B)the standard amount of direct materials allowed for actual production
C)the difference between the actual quantity of direct materials used and the standard amount of materials allowed for actual production
D)the direct materials purchased
7
For the quantity variance to be meaningful, the standard quantity of direct material must be based on:
A)budgeted quantity allowed, given the budgeted output
B)standard quantity allowed, given the actual output
C)actual price paid for the quantity purchased
D)standard price paid for the quantity purchased
8
An unfavourable direct material price variance indicates that:
A)the actual amount of direct material used in production is higher than that allowed for in the standard
B)the actual amount of direct material purchased is lower than that forecast in the static budget
C)the actual purchase price of the direct material is higher than the standard price
D)the actual purchase price of the direct material is lower than the standard price
9
A favourable direct material quantity variance indicates that:
A)the actual amount of direct material used in production is higher than that allowed for in the standard
B)the actual amount of direct material purchased is lower than that forecast in the static budget
C)the actual purchase price of the direct material is higher than the standard price
D)the actual amount of direct material used in production is lower than that allowed for in the standard
10

Calculate the direct material price variance given the following information:

Direct materials purchased

550 kilograms

Actual purchase price

$10 per kilogram

Actual production

1000 units

Standard quantity of direct materials allowed to produce one unit of output

0.5 kilograms

Standard price

$9 per kilogram

Actual quantity used in production

520 kilograms

A)$550 unfavourable
B)$520 favourable
C)$550 favourable
D)$500 unfavourable





To learn more about the book this website supports, please visit its Information Center.
(c)2009 McGraw-Hill Australia
Any use is subject to the Terms of Use and Privacy Notice.
McGraw-Hill Australia is one of the many fine businesses of The McGraw-Hill Companies.


Management AccountingOnline Learning Center

Home > Chapter 10 > Quiz 10.01