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Exam 22: Evaluating Variances From Standard Costs

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Question 51

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Standards that represent levels of operation that can be attained with reasonable effort are called

A) theoretical standards
B) ideal standards
C) variable standards
D) normal standards

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Question 52

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-Calculate the direct materials price variance.

A) $1,795.50 favorable
B) $378.00 favorable
C) $4,512.50 unfavorable
D) $378.00 unfavorable

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Question 53

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Define nonfinancial performance measures. What are they used for and what are some common examples?

Use this information for Taylor Company to answer the questions that follow. ​ The following data are given for Taylor Company: ​ Overhead is applied based on standard labor hours. ​ -Compute the direct labor rate and time variances for Taylor Company.

Accounting systems that use standards for product costs are called standard cost systems.

Accounting systems that use standards for product costs are called budgeted cost systems.

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual is 800 units at $12, the direct materials price variance is $800 favorable.

The variance from standard for factory overhead resulting from incurring a total amount of factory overhead cost that is greater or less than the amount budgeted for the level of operations achieved is termed controllable variance.

The formula to the compute direct labor time variance is to calculate the difference between

A company records inventory purchases at standard cost and also records purchase price variances. Prepare the journal entry for a purchase of 6,000 widgets that were bought at $8.00 and have a standard cost of $8.15.

A company records its inventory purchases at standard cost but also records purchase price variances. The company purchased 5,000 widgets at $8.00 each, and the standard cost for the widgets is $7.60. Which of the following would be included in the journal entry?

Nonfinancial measures are often linked to the inputs or outputs of an activity or process.

Standard costs are determined by multiplying expected price by expected quantity.

Normally, standard costs should be revised when labor rates change to incorporate new union contracts.

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual is 800 units at $12, the direct materials quantity variance is $1,000 unfavorable.

What is the fixed factory overhead volume variance?

Standards are set for only direct labor and direct materials.

Match each of the following descriptions with the term (a-e) it describes. -Normal standard

-Calculate the direct labor rate variance.

A variable cost system is an accounting system where standards are set for each manufacturing cost element.