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| 1 | Which of the following statements are true? (there may be more than one)
(Learning Objective 1 Ch 12) |
 | A) | the standard cost per unit is computed by multiplying the
standard quantity or hours by the standard price or rate. |
| B) | the standard hours per product is the time required to produce the product as observed during a time and motion study |
| C) | The standard labour rate is the hourly rate paid to employees |
| D) | a standard can be viewed as the budgeted
cost for one unit of product. |
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| 2 | The next 3 questions are based on the following information
Cox Engineering performs cement core tests in its laboratory. The following standards have been set for each core test performed:
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During March, the laboratory performed 2,000 core tests. On March 1 no direct materials (sand) were on hand. Variable manufacturing overhead is assigned to core tests on the basis of direct labour hours. The following events occurred during March:
8,600 pounds of sand were purchased at a cost of £7,310.
7,200 pounds of sand were used for core tests.
840 actual direct labour hours were worked at a cost of £8,610.
Actual variable manufacturing overhead incurred was £6,216.
The materials price variance for March is:
(Learning Objective 2 Ch 12) |
| A) | £860 unfavourable. |
| B) | £860 favourable. |
| C) | £281 unfavourable. |
| D) | £281 favourable. |
|
| 3 | The labour rate variance is:
(Learning Objective 3 Ch 12) |
| A) | £990F |
| B) | £990U |
| C) | £1470F |
| D) | £1470 U |
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| 4 | The variable overhead efficiency variance is:
(Learning Objective 4 Ch 12) |
| A) | £360F |
| B) | £360U |
| C) | £984F |
| D) | £984U |
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| 5 | A favourable material price variance coupled with an unfavourable material usage variance would most likely result from:
(Learning Objective 5 Ch 12) |
| A) | labour efficiency problems. |
| B) | machine efficiency problems. |
| C) | the purchase and use of higher than standard quality material. |
| D) | the purchase and use of lower than standard quality material. |
|
| 6 | Which department should usually be held responsible for an unfavourable materials price variance?
(Learning Objective 5 Ch 12) |
| A) | Production. |
| B) | Materials Handling. |
| C) | Engineering. |
| D) | Purchasing. |
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| 7 | If managers are insensitive and punish adverse variances then morale will suffer
(Learning Objective 5 Ch 12) |
| A) | True |
| B) | False |
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| 8 | Generally speaking, it is the responsibility of the production department to see that material usage is kept in line with standards
(Learning Objective 5 Ch 12) |
| A) | True |
| B) | False |
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| 9 | The entry to record unfavorable labour efficiency variance and a favourable labour rate variance is
(Learning Objective 6 Ch 12) |
| A) | Dr Labour Rate Var Cr WIP
Dr Wages Payable Cr Labour Efficiency Var |
| B) | Dr Labour Efficiency Var Cr WIP
Dr Labour Rate Var Cr Wages Payable |
| C) | Dr WIP Cr Labour Rate
Dr Labour Efficiency Var Cr Wages Payable |
| D) | Dr WIP Cr Labour Efficiency Var
Dr Wages Payable Cr Labour Rate Var |
|
| 10 | The entry to record an unfavourable material quantity variance is
(Learning Objective 6 Ch 12) |
| A) | Dr WIP Dr Mat Qty Var Cr Raw Mats |
| B) | Cr WIP Cr Mat Qty Var Dr Raw Mats |
| C) | Dr WIP Cr Mat Qty Var Cr Raw Mats |
| D) | Cr WIP Dr Mat Qty Var Dr Raw Mats |