Standard Costing

A budget that separates variable costs from fixed costs and presents variable costs on a per unit basis so that budgeted amounts can be calculated for all levels of production within the relevant range is a rolling budget.

• TRUE

• FALSE

A fixed budget performance report explains why actual costs such as for direct materials differed from the budgeted amounts.

• TRUE

• FALSE

A budget that is based on a single estimate of sales or production volume and that gives no consideration to the possibility that the actual sales or production volume may differ from the assumed amount is a master budget.

• TRUE

• FALSE

Standard material, labor and overhead costs can be found by looking up the particular cost in tables published by the PICPA.

• TRUE

• FALSE

A cost variance is the difference between actual cost and standard cost.

• TRUE

• FALSE

A direct labor cost variance may be broken into a controllable variance and a volume variance.

• TRUE

• FALSE

Overhead cost variance is the difference between the overhead actually incurred and the overhead budgeted at the operating level achieved.

• TRUE

• FLASE

Sales volume variance is budgeted unit price times the difference between actual inputs and budgeted inputs for the actual activity level achieved.

• TRUE

• FALSE

An efficiency variance is a flexible budget amounts less static budgeted amounts.

• TRUE

• FALSE

When standard costs are used, factory overhead is charged to production by means of a predetermined standard overhead rate.

• TRUE

• FALSE