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Chapter 10 Quiz 4
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1
Some managers believe that perfection standards motivate employees to achieve the lowest cost possible. They claim that, since the standard is theoretically attainable, employees will be motivated to work as hard as possible to achieve it:
A)True
B)False
2
The standard material quantity is the total delivered cost of that material, after subtracting any discounts:
A)True
B)False
3
Management by exception is where managers only follow up significant variations in costs:
A)True
B)False
4
Management accountants can use historical cost data, which employs time and motion studies as the key element for predicting costs:
A)True
B)False
5

All control systems have three basic parts:

  • a predetermined or past performance level
  • a measure of past performance
  • a comparison between past performance and actual performance
A)True
B)False
6
A direct labour rate variance will indicate the cost implications of using a different number of direct labour hours, compared to standard (given the actual output):
A)True
B)False
7
A standard cost is a budget for the production of one unit of product, either goods or services. It is the cost that serves as the benchmark in the budgetary control system:
A)True
B)False





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